WALL STREET 15 Sept 2012 >>> U.S. stocks extend Fed-inspired rally

DJIA ends at multi-year high on Feds stimulus promise
U.S. stocks rose for a fourth straight session on Friday to close out the week at nearly five-year highs after the Federal Reserve took bold action to spur the economy, a move that could keep equities buoyed in the coming months. Equities are in a run-up that also pushed the S&P 500 to end higher for four consecutive months. The extended advance has come mainly from actions by Europe's and the United States' central banks to keep interest rates low and stimulate their struggling economies.

The Fed said Thursday that it would keep up its aggressive bond-buying until unemployment falls. Chairman Ben Bernanke said he wanted to see a convincing improvement in the economy that could deliver sustainable job creation.

Scaling back from a 113-point climb, the Dow Jones Industrial Average DJIA +0.40%  gained 53.51 points, or 0.4%, to 13,593.37, the highest close since Dec. 10, 2007. It gained 2.2% on the week, tallying gains for eight of the past 10 weeks. The sharp turn higher for equities came after the Fed unveiled an open-ended plan to buy mortgage-backed assets at a clip of $40 billion a month. The central bank also pledged to take more actions, if necessary, to give the stodgy economy and labor market a fresh jolt of power.

It was the best week for the Dow since early June. The broader markets had a strong week as well: the S&P 500 jumped 1.9% and the Nasdaq rallied 1.5%. 

ANALYSTS QUOTES

"Today is simply a continuation of the strength we saw yesterday." 

"Bernanke's comments are going to create an artificial floor on the market, meaning that we could see higher prices over time. Any correction that we get will be no more than a few percentage points."

"Right now we have this short-term euphoria. But then the question is where do we go from here? I think after a week or so, if the underlying economic data doesn't change, you're going to see the market drop a bit and we'll continue to plod along until the election."

“We had a fair amount of data out right on the heels of the Fed, but probably the biggest influence today is still the after-effects of the Fed’s announcement yesterday.”

"We are starting to get into that heady territory where you need to be on the defensive. Trying to squeak out the last 5 percent of a move when there is potentially a 15 to 20 percent downside in my opinion is pretty dangerous stuff."

"While everyone is trying to figure out what QE3 means to the economy, stocks have spoken, and they like it. At the same time, hedge funds have totally dropped the ball and missed most of this rally. There's a good chance these Johnny-come-latelies could be the fuel for the next surge higher."

 

 HAPPY TRADING

More Multi-Year Highs for the Dow, SPX as Summertime Rally Continues

08 Sept 2012 Wall Street end the shortened week on a bullish note
U.S. stocks clung to the flatline and stayed near multiyear highs Friday as disappointment over the August jobs report was countered by hopes the gloomy data could give the Federal Reserve further reason to unleash a third round of quantitative easing. The Dow Jones Industrial Average (DJI) drifted below breakeven before lunchtime, but battled its way back into the black in the last minutes of trading. With that, the blue-chip barometer secured a respectable return  of 1.65% for the week.

The markets will be laser focused on the Federal Reserve next week, anxiously awaiting word on whether the central bank will initiate another round of economic stimulus.

The Federal Open Markets Committee, which sets most Fed policy, is meeting Wednesday and Thursday and a statement is due at the end of the second day. Fed Chairman Ben Bernanke will hold a press conference Thursday afternoon.

Stock markets are all hoping for another round of quantitative easing, in which the Fed buys      U.S. securities in an effort to goose the stumbling U.S. economy. Friday’s dismal labor report which revealed that just 96,000 jobs were created in August only boosted hopes among investors for QE III.

The Dow Jones Industrial Average (DJI – 13,306.64) was rather flat all session long, but found itself up 14.6 points, or 0.1%, by the closing bell. The Dow posted its best daily settlement since December 2007. Half of the 30 components slipped into negative territory, with Kraft Foods Inc's (NASDAQ:KFT) 5.5% loss pacing the laggards. On the other hand, the 15 outperformers were led higher by Bank of America's (NYSE:BAC) 5.4% gain. During the holiday-shortened week, the Dow enjoyed a 1.65% rise.

 

Adding 5.8 points, or 0.4%, the S&P 500 Index (SPX – 1,437.92) prolonged its stay in the black today and closed at a fresh four-year high. Plus, the SPX marked its best daily close since January 2008. For the week, the broad-market index climbed 2.2%.

 

The Nasdaq Composite (COMP – 3,136.42) enjoyed another multi-year high run, touching 3,139.61 in intraday action -- its loftiest price since mid-November 2000. And after the dust cleared, the tech-rich barometer eked out a fractional win. The COMP turned in the best weekly performance of its peers, rallying 2.3%.

For every stock sliding in New York Friday, more than two gained on the New York StockExchange, where nearly 680 million shares had traded. Composite volume reached 3.7 billion.

 

HAPPY WEEKEND

WALL STREET 31st Aug 2012 >>> Stocks higher, but volatile, after Bernanke's speech

DJIA gyrates as Bernanke speaks finally settling at 3 months high

It took a while, but investors eventually decided they liked what they heard from Ben Bernanke, and stock indexes rose enough on Friday to put them into positive territory for August.

Stocks gyrated after the Federal Reserve chairman spoke on Friday morning. They first gave up their morning gains, then bolted to their highs for the day, before settled in-between.

The Dow Jones industrial average ended the day up 90.13 points at 13,090.84.

A half-hour after trading began, Bernanke declared that the Fed is ready to take more action to help an economy that’s “far from satisfactory.”

Investors have been watching to see whether the Fed will buy more bonds to further lower long-term interest rates. Stocks fell initially, however, after it became clear that no such announcement was coming Friday and that Bernanke had stopped short of committing the Fed to any specific move.

Still, he said the Fed “should not rule out” new policies to improve the job market.

Stocks rebounded once investors parsed his comments. At one point the Dow was up as many as 151 points.

In terms of volatility, “it’s been the most action we’ve seen in couple of weeks,” said a senior equity trader. He noted that pre-Labor Day volume was light, with many investors and traders on vacation, which can contribute to bigger price swings.

The Standard & Poor’s 500 index closed up by 7.10 points at 1,406.58. The Nasdaq rose 18.25 points to close at 3,066.96.

The Dow finished the month of August up by 0.8 percent. The S&P 500 rose more than 2 percent for the month, and the Nasdaq rose more than 4 percent.

ANALYSTS QUOTES

"The market drew a lift today on further confirmation that [Fed Chairman Ben] Bernanke does have another round of QE in his back pocket.”

“It certainly seems he’s making an impassioned case for the ethicality of further monetary easing. If he believes it, and the board believes it, and they continue to see the dire need for it, we’re probably going to get something."

"There was no announcement about if more stimulus was coming immediately, but he (Bernanke) said the Fed was ready to act if necessary so that was supportive."

“The true test of the market advance will come when more investors come back in September. Volume has been anemic."

“Stocks have mostly priced in odds of QE3 taking place along with substantial policy actions out of the Europeans, with what’s going on with gold and silver being up today on weakness in the dollar that’s clearly associated with Bernanke’s coming likely actions,” 

"Along with the factory orders and consumer sentiment data, the (market) longs are in control."

HAPPY TRADING