US Stocks rally, making this the best month ever since 91

[MrMarcus1914]

See brokers smiling again?! Hopefully this is just the beginning. Bottom line is this administration inherited a mess. It will be nice to see them clean it up.

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U.S. Stocks Rally, Extend S&P 500’s Best Monthly Gain Since ’91

By Lynn Thomasson

March 25 (Bloomberg) -- U.S. stocks rose, extending the best monthly rally in 17 years for the Standard & Poor’s 500 Index, as unexpected growth in durable-goods orders and new-home sales boosted optimism that the economy is stabilizing.

The Dow Jones Industrial Average reversed a 110-point drop in the final hour of trading as investors overcame concern about a disappointing auction of Treasuries notes. JPMorgan Chase & Co., Bank of America Corp. and Alcoa Inc. led the advance after the government reported a 3.4 percent increase in demand for longer lasting products such as refrigerators, airplanes and computer chips and a 4.7 percent gain in new-home purchases.

The S&P 500 added 1 percent to 813.88 and has jumped almost 11 percent in March for its best gain since 1991. The Dow gained 89.84 points, or 1.2 percent, to 7,749.81. The Nasdaq Composite Index increased 0.8 percent to 1,528.95. Almost three stocks rose for each that fell on the New York Stock Exchange.

“This could be the beginning of an improvement,” said Charles Smith, who manages $700 million in Pittsburgh including the Fort Pitt Capital Total Return Fund, which beat 78 percent of its peers last year. “The market is essentially saying, ‘Now we have an idea that we’ve already seen the worst rate of change in GDP.’”

The S&P 500 erased about half of yesterday’s decline, which was spurred when Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Timothy Geithner proposed tighter regulations on the financial industry. The benchmark U.S. stock index is up 20 percent since March 9 amid speculation the government’s plan to help investors buy toxic assets will revive credit markets.

Whipsaw Afternoon

Benchmark indexes turned negative at about 2 p.m. after an auction of $34 billion in five-year Treasury notes drew a larger-than-forecast yield of 1.849 percent, spurring concern that government attempts to lower interest rates will won’t work.

Treasuries declined for a fifth day following the auction and the failure of a U.K. government debt sale. The last time the U.K. was unable to attract enough investors was in 2002.

The U.K.’s FTSE 100 Index slipped 0.3 percent, trailing a 0.3 percent advance in the Dow Jones Stoxx 600, Europe’s regional benchmark index.

The gains in the S&P 500 and Dow came in the final 10 minutes of trading after Treasuries pared losses.

Bank of America climbed 6.7 percent to $7.70, reversing a 3.6 percent retreat. JPMorgan rose 8.2 percent to $28.56. Wells Fargo & Co. added 5.9 percent to $16.42. Credit Suisse Group AG analysts said the banks are best-positioned to rid themselves of toxic mortgages through the Treasury’s plan to finance private investors purchases, which was announced two days ago.

‘Take Some Stress Away’

“People are looking around and saying, ‘If the banks can get some of the assets off their balance sheets, that will take some stress away and they won’t have to take big hits quarter to quarter,’” said Peter Kovalski, who manages financial stocks at Alpine Mutual Funds in Purchase, New York. Alpine oversees $4.5 billion.

Financial shares in the S&P 500 climbed 4.6 percent collectively and have rallied 55 percent since March 6.

CB Richard Ellis Group Inc., the world’s largest property broker, posted the S&P 500’s steepest gain, jumping 64 percent to $4.92. The shares were raised to “overweight” at JPMorgan Chase following the approval by lenders to amend its credit facility, easing debt terms in exchange for higher financing costs.

Durable Goods, Housing Data

Boeing Co., the world’s second-biggest commercial plane maker, added 2.7 percent to $37.06. The increase in durable goods orders was the biggest gain in more than a year and the first in seven months, the Commerce Department said. The growth followed a 7.3 percent decrease in January that was larger than previously estimated.

Alcoa, the nation’s biggest aluminum producer, jumped 5.5 percent to $7.72.

A gauge of homebuilders in S&P indexes added 2.4 percent, led by a rally of 21 percent in M/I Homes Inc. Purchases of new homes in the U.S. unexpectedly rose in February from a record low as plummeting prices and cheaper mortgage rates lured some buyers. Sales increased to an annual pace of 337,000 after a 322,000 rate in January, the Commerce Department said.

Today’s data and earlier reports showing improvements in retail sales and residential construction helped counter concern that rising unemployment will worsen the recession that spurred a 6.2 percent contraction in the U.S. economy last quarter.

Pepsi, Hewlett-Packard

PepsiCo Inc. rose 1.8 percent to $52.47. The world’s biggest snack-food maker was raised to “buy” from “neutral” at UBS AG, which cited “earnings and investment flexibility.”

Hewlett-Packard Co. added 1.3 percent to $31.01. The world’s largest personal-computer maker was rated “outperform” in new coverage at RBC Capital Markets.

“Investors will benefit from HP’s diverse revenue portfolio, recurring book of business, stronger margin profile and solid management team,” the brokerage wrote in a report. Jabil Circuit Inc. rallied 36 percent to $5.20 for the biggest gain since going public in 1993. The maker of mobile phones for Nokia Oyj said “core” earnings for the second quarter rose to 13 cents per share, beating the average analyst estimate by 8.3 percent.

The gain in stocks came even as JPMorgan cut its earnings estimates for S&P 500 companies as the recession worsened in recent weeks. Earnings per share will be $57 this year compared with a previous forecast of $65, strategist Thomas Lee wrote in a report today. The firm’s prediction is more optimistic than the average forecast of $47.45 a share compiled from a Bloomberg survey of Wall Street strategists.

Earnings Watch

“Achieving our 2009 EPS estimate is almost entirely dependent on financials,” New York-based Lee wrote in a report released today.

He joins Barclays Capital’s Barry Knapp, who reduced his earnings projection to $41 a share, down from a November forecast for $46, earlier this week.

Dean Foods Co. fell the most since December, losing 7.7 percent to $18.80. The largest U.S. milk processor was cut to “neutral” from “outperform” by Credit Suisse Group AG.

Constellation Brands Inc. had the steepest decline since January, sliding 5.4 percent to $12.55. The world’s largest winemaker forecast 2009 earnings excluding some items of $1.62 a share at most, missing the average analyst estimate of $1.69.

The S&P 500 jumped 7.1 percent on March 23, its steepest gain since October, on speculation the U.S. plan to finance purchases of toxic assets will spur growth. The index is down 9.9 percent in 2009 after a 38 percent slump last year, its worst since the Great Depression.

To contact the reporter on this story: Lynn Thomasson in New York at lthomasson@bloomberg.net.

Last Updated: March 25, 2009 16:49 EDT

[Rdskn4Lyf21]

I scrolled down and all I could manage to think of was "Holy ****".

[WARLORD1863]

Don't count your chickens yet. I certainly hope the market has found stability, but the market fluctuates so much only time will tell if we've fixed things.

And you shouldn't give Obama credit. There really is very little the President can do to affect the market. Also, to be fair, Obama was continuing with what Bush started at the end of his term by providing bailout money, much to the shigrin of fellow Republicans. But even that really doesn't do much for the market overall. The market is a strange tempermental beast.

Cross your fingers and hope everything has finally settled.

[ChocolateCitySkin]

Don't count your chickens yet. I certainly hope the market has found stability, but the market fluctuates so much only time will tell if we've fixed things.

And you shouldn't give Obama credit. There really is very little the President can do to affect the market. Also, to be fair, Obama was continuing with what Bush started at the end of his term by providing bailout money, much to the shigrin of fellow Republicans. But even that really doesn't do much for the market overall. The market is a strange tempermental beast.

Cross your fingers and hope everything has finally settled.

nope no obama credit being given here. clearly this was all bush and the GOPs doing.

[Burgold]

It will definately resettle somewhat, but hopefully we've found a more or less permanent floor and this means that the efforts of the government to stabalize and get us back on track are looked on positively by Wall Street. More, hopefully it means that we have started the journey towards a better economy (knocks on wood).

Then, we'll have to sort out the long term damage this invasive surgery did and how bad the side effects from the medicine are.

[Thiebear]

It will definately resettle somewhat, but hopefully we've found a more or less permanent floor and this means that the efforts of the government to stabalize and get us back on track are looked on positively by Wall Street. More, hopefully it means that we have started the journey towards a better economy (knocks on wood).

Then, we'll have to sort out the long term damage this invasive surgery did and how bad the side effects from the medicine are.

Well put, I give him credit for starting to talk like a President and pulling everyone away from the Gloom and Doom.

[Mark The Homer]

Good stuff.

[GibbsFactor]

Not to be a debbie downer but...

being a debbie downer, the statistics of the past showed a rally by mid year only for the heartbreaking second crash 5 months later.

[Midnight Judges]

Not to be a debbie downer but...

being a debbie downer, the statistics of the past showed a rally by mid year only for the heartbreaking second crash 5 months later.

Which statistics are you speaking of?

[ChocolateCitySkin]

Not to be a debbie downer but...

being a debbie downer, the statistics of the past showed a rally by mid year only for the heartbreaking second crash 5 months later.

moon charts please.

[GibbsFactor]

Historical statistics of past situations like this. If you look at what happened during the Great Depression, you'll see the market acting eerily similar.

Hopefully just a coincidence. But many predicted a high around June with another low around December, just check people's "predict the dow thread" predictions.

[WARLORD1863]

nope no obama credit being given here. clearly this was all bush and the GOPs doing.

Obama was continuing what Bush started, which was bailouts. So if you give Obama credit for saving us through his bailouts, you then have to give credit to Bush as well. I'm just following the "Obama saved us!" logic, which is wrong... as I will again try to explain.

My overall message was that the President's actions have very little affect on the market overall. When the dow hit 13,000 people were like, "Bush is amazing! He's bringing or economy to all new levels!" I scoffed and told them exactly what I'm saying here. Presidents should not recieve credit or blame for how things are going on Wall Street, because what they do has an insignificant impact... if there is an impact at all.

**EDIT** As a disclaimer, I'm not saying the GOVERNMENT has no impact on markets, as the lack of oversight was what allowed for many of the economic problems to occur (not just in stocks), I'm saying the President himself had little to no impact. By imposing more strict oversight the President would be setting up a means to help prevent problems in the future. Recovery is a different matter.

[Hubbs]

Historical statistics of past situations like this. If you look at what happened during the Great Depression, you'll see the market acting eerily similar.

Hopefully just a coincidence. But many predicted a high around June with another low around December, just check people's "predict the dow thread" predictions.

Like me.

Enjoy it while it lasts, folks.

[techboy]

Not to be a debbie downer but...

being a debbie downer, the statistics of the past showed a rally by mid year only for the heartbreaking second crash 5 months later.

Yes, there are. On the other hand, there are also equally convincing statistics (which is to say, not at all) that show that we hit the bottom already (I've read several articles in the past few days using previous Bears and stats to argue this).

There's a reason the SEC forces everyone to say that "Past performance is not indicative of future results."

So, we are clearly either in a "sucker's rally" or recovering. No doubt about it.

Good luck predicting the unpredicatable.

[Larry]

Historical statistics of past situations like this. If you look at what happened during the Great Depression, you'll see the market acting eerily similar.

You mean, if you look at the Great Depression, the chart will predict a Great Depression? :halo:

[Larry]

I agree that I don't think this rally (which maybe we should wait till the end of the month before awarding the trophy) should be credited to the stimulus. Heck, I bet they haven't even started to spend it, yet.

("I have not yet begun to deficit spend!")

I suppose, if you're desperate to hand out credit, I wouldn't laugh outright at an argument that maybe the market is going up in anticipation of the stimulus.

[ChocolateCitySkin]

Like me.

Enjoy it while it lasts, folks.

Please post your moon charts. I really can't take your opinion seriously without them.

[mjah]

Here's my moon chart.

I made it with a computer, so it's probably correct.

[PeterMP]

Historical statistics of past situations like this. If you look at what happened during the Great Depression, you'll see the market acting eerily similar.

Hopefully just a coincidence. But many predicted a high around June with another low around December, just check people's "predict the dow thread" predictions.

Not to bust your chops, but the Dow had nearly 35 points months (hard to believe 35 points was a really good month) in Nov. 1928 and June of 1929 and didn't have a matching month through at least 1931 so the only way that makes sense historically is if you believe we haven't had our "black" day yet (Oct. 1929).