“The investor mentality is certainly returning a little bit. When you have a The major force on Wall Street is second-quarter earnings.week that is up six-plus percent, people will start noticing,” said Frank Davis, director of sales and trading at LEK Securities.
The Dow, which closed at its highest level since Jan. 6 and is in the midst of its longest win streak since April 2007, was led by Caterpillar (CAT: 36.64, 2.72, 8.02%), Disney (DIS: 25.36, 0.86, 3.51%) and Alcoa (AA: 10.59,0.37, 3.62%). The index's biggest percentage losers were Bank of America (BAC: 12.24, -0.61, -4.75%) andProctor & Gamble (PG: 55.58, -0.33, -0.59%).
Wall Street breathed a sigh of relief over the weekend as The Wall Street Journal reported CIT Group is nearing a final-hour deal to secure $3 billion from bondholders and avoid a bankruptcy filing. Shares of CIT nearly doubled on the news after plunging to pennies last week when the company failed to receive a government rescue.
“Everyone painted such a doom-and-gloom scenario that barring any real blow-up to the downside, I think we’re going to continue this trend upward,” NSYE trader Jason Weisberg of Seaport Securities told FOX Business. “As long as the bellwethers show positive earnings, regardless of what happens to the smaller stocks, the bellwethers are going to carry the markets further north.”
Yet the rally has lacked the heavy volume that traders use to indicate conviction and many traders still harbor concerns about earnings, banks and the broader economy. “There’s tons of news that says this over but I continue to see a dominance of doubt. I think it has to do with the severity of the crisis," said Paulsen. "It’s going to take a lot of good news to convert some of these bears to bulls. But I do think that will come."
Today's Markets
The Dow Jones Industrial Average gained 104.21 points, or 1.19%, to 8848.15, the Standard & Poor's 500 rose 10.75 points, or 1.14%, to 951.13 and the Nasdaq Composite picked up 22.68 points, or 1.2%, to 1909.29.
The Dow Jones Industrial Average gained 104.21 points, or 1.19%, to 8848.15, the Standard & Poor's 500 rose 10.75 points, or 1.14%, to 951.13 and the Nasdaq Composite picked up 22.68 points, or 1.2%, to 1909.29. Market breadth was positive. On the New York Stock Exchange, advancers beat decliners by 3 to 1 on a volume of 1.13 billion shares. On the Nasdaq, advancers beat out decliners by almost 5 to 1 on a volume of 2.08 billion shares.
Lifted by renewed economic optimism and a solid opening act to earnings season, the Dow has now surged 702 points in just six trading days, recouping all of its month-long slump. The rally has been even more impressive on the Nasdaq Composite, which is in the midst of its first nine-day win streak in exactly 11 years.
“I think it’s pretty clear we’ve turned the corner in this crisis. We’re getting rather good news almost every day,” said Jim Paulsen of Wells Capital Management, pointing to improvements in markets for bonds, stocks and commodities.
In the commodity markets, crude oil built on last week's 6% rally. Closing in the green for the fourth-straight day, crude climbed 42 cents a barrel, or 0.66%, to $63.98 -- its highest level since July 6.
Panic is over. Crisis is not
"We have a very heavy earnings calendar, light economic news calendar," said Fred Dickson, chief market strategist at D.A. Davidson & Company. "The name of the game is earnings."
Companies have beat analysts' estimates by more than in other quarters, according to Ed Clissold, senior global analyst at Ned Davis Research, and that sentiment is supporting stocks Monday.
"The fact that companies haven't come out with the dire earnings that were seen in the first quarter is a positive sign," he said.
Companies have beat analysts' estimates by more than in other quarters, according to Ed Clissold, senior global analyst at Ned Davis Research, and that sentiment is supporting stocks Monday.
"The fact that companies haven't come out with the dire earnings that were seen in the first quarter is a positive sign," he said.
Global Markets
European stocks also closed in the green for the sixth-straight day. London's FTSE 100 gained 1.25% to 4443.62, France's CAC 40 rallied 1.63% to 3270.94 and Germany's DAX advanced 1.04% to 5030.15.
European stocks also closed in the green for the sixth-straight day. London's FTSE 100 gained 1.25% to 4443.62, France's CAC 40 rallied 1.63% to 3270.94 and Germany's DAX advanced 1.04% to 5030.15.
In Asia, Hong Kong's Hang Seng jumped 3.7% to 19502.37 and China's Shanghai Composite rose 2.4% to 3266.92. Japanese markets were closed for a public holiday.
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