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US stocks up on relief over earnings, debt auction
Source: Agencies |
March 27, 2009, Friday
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WALL Street's March rally gained momentum yesterday - this time, thanks to surprisingly good earnings from some major consumer brands.
Strong demand for government debt at the Treasury Department's latest auction also lifted stocks. Investors had been nervous about the government's ability to fund its economic stimulus and financial bailout programs.
Best Buy Co., ConAgra Foods Inc., and Dr Pepper Snapple Group Inc. all turned in quarterly profits that beat analysts' modest expectations.
The Dow Jones industrial average rose 174 points yesterday to finish at its highest level in nearly six weeks. The index has surged 21 percent since hitting a nearly 12-year low on March 9.
Market analysts are quick to point out that an advance of that size can quickly collapse, especially in an uncertain economic environment.
Kevin Kramer, chief operating officer at West End Financial Advisors, an asset management company in New York, contends unemployment, limited access to credit and heavy loads of debt will keep curbing growth.
"Just because things aren't getting worse doesn't mean they're getting better," Kramer said. "You stopped the flow of blood out of my body, but it doesn't mean I'm going to survive."
But with the end of the first quarter quickly approaching, money managers are fearful of missing out on the recent rally, the magnitude of which usually occurs over the course of many years.
David Waddell, senior investment strategist and chief executive of Waddell & Associates, said he has seen some "seller's remorse" among his clients who sold stocks too low in the first two months of the year. That can move people back into buying mode.
"One thing that many people are beginning to believe is that the market is going to bottom in 2009," Waddell said.
The Dow jumped 174.75, or 2.3 percent, at 7,924.56, its highest close since Feb. 12.
The Standard & Poor's 500 index rose 18.98, or 2.3 percent, to 832.86, and the Nasdaq composite index rose 58.05, or 3.8 percent, to 1,587.00.
Strong demand for government debt at the Treasury Department's latest auction also lifted stocks. Investors had been nervous about the government's ability to fund its economic stimulus and financial bailout programs.
Best Buy Co., ConAgra Foods Inc., and Dr Pepper Snapple Group Inc. all turned in quarterly profits that beat analysts' modest expectations.
The Dow Jones industrial average rose 174 points yesterday to finish at its highest level in nearly six weeks. The index has surged 21 percent since hitting a nearly 12-year low on March 9.
Market analysts are quick to point out that an advance of that size can quickly collapse, especially in an uncertain economic environment.
Kevin Kramer, chief operating officer at West End Financial Advisors, an asset management company in New York, contends unemployment, limited access to credit and heavy loads of debt will keep curbing growth.
"Just because things aren't getting worse doesn't mean they're getting better," Kramer said. "You stopped the flow of blood out of my body, but it doesn't mean I'm going to survive."
But with the end of the first quarter quickly approaching, money managers are fearful of missing out on the recent rally, the magnitude of which usually occurs over the course of many years.
David Waddell, senior investment strategist and chief executive of Waddell & Associates, said he has seen some "seller's remorse" among his clients who sold stocks too low in the first two months of the year. That can move people back into buying mode.
"One thing that many people are beginning to believe is that the market is going to bottom in 2009," Waddell said.
The Dow jumped 174.75, or 2.3 percent, at 7,924.56, its highest close since Feb. 12.
The Standard & Poor's 500 index rose 18.98, or 2.3 percent, to 832.86, and the Nasdaq composite index rose 58.05, or 3.8 percent, to 1,587.00.
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