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fluid.forty.one · 03-10-2009, 01:12 PM

Big rally on Wall Street
Major gauges surge as Citigroup helps charge up a rally following the recent bloodletting.

NEW YORK (CNNMoney.com) -- Markets surged Tuesday afternoon, recovering from multi-year lows, after Citigroup cooled some worries about its solvency and talk resurfaced that the SEC could reinstate a key trading rule.

Investors also considered comments from Federal Reserve Chairman Ben Bernanke about the need for an overhaul of the financial system.

The Dow Jones industrial average (INDU) gained 300 points, or 4.6%, with around 2-1/2 hours left in the session. The Dow ended the previous session at its lowest point since April 15, 1997.

The S&P 500 (SPX) index gained 35 points, or 5.3%, after ending the previous session at the lowest point since Sept. 12, 1996.

The Nasdaq composite (COMP) climbed 74 points or 5.9%, after ending the previous session at its lowest point since Oct. 9, 2002.

Citigroup (C, Fortune 500) shares jumped 34%, leading a broader rally in the financial sector. Bank of America (BAC, Fortune 500), Wells Fargo (WFC, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500) were among the stocks rallying. The KBW Bank (BKX) sector index climbed 9%.

But the rally was broad based, with all 30 Dow components rallying. In addition to the Dow's financial stocks, other big gainers included Alcoa (AA, Fortune 500), Caterpillar (CAT, Fortune 500), General Electric (GE, Fortune 500) and General Motors (GM, Fortune 500).

A variety of big tech shares jumped, too, including Cisco Systems (CSCO, Fortune 500), eBay (EBAY, Fortune 500), Dell (DELL, Fortune 500), Google (GOOG, Fortune 500) and Dow component Intel (INTC, Fortune 500).

"Citigroup got us started but then Barney Frank came out and said that the uptick rule could be reinstated and that helped a lot too," said Tom Schrader, managing director at Stifel Nicolaus.

Rep. Barney Frank, D-Mass., the head of the U.S. House Financial Services Committee told reporters Tuesday that the Securities and Exchange Commission would restore the "uptick rule."

The uptick rule -- which was in place until July 2007 -- limits short sellers from adding to the downward momentum of a stock that is already plunging. In short selling, traders make money when the price of a stock falls.

Critics say the ending of the uptick rule has added to the selling in the financial sector stocks over the last year and a half.

Stocks were also bouncing back in response to the recent bloodletting in the markets.

0:00 /1:33Waiting for the bears
Year-to-date, the Dow and S&P 500 were down around 25% as of Monday's close, while the Nasdaq was down around 17%. In light of the massive selloff, analysts have been saying for some time that the market is due for a sharp, bear market rally. That seemed to be taking hold Tuesday morning.

The rally is an oversold bounce off these recent levels, Schrader said, but it also has the potential to usher in a bigger advance within the ongoing downtrend. That was also the case after the stock market hit lows in both October and November of last year.

"There's a chance that if this gets enough gas, it could move up a lot more," Schrader said. "There's tons of cash sitting in money markets and if people start to think they're going to miss out, they're going to want to jump back in."

The Dow and S&P 500 ended at fresh 12-year lows Monday after Merck's $41 billion purchase of Schering-Plough failed to distract investors from worries about the economy.

March 10 is a dubious holiday for the Nasdaq. It's the 9-year anniversary of the day it hit its all-time high of 5048.62 at the height of the tech boom. As of Monday's close, the tech-heavy index was down 75% from its peak. (Full story)

Banks: Citigroup (C, Fortune 500) CEO Vikram Pandit, in a letter to employees, said the bank was profitable year-to-date and that it is confident about its capital position. The letter, filed with the Securities and Exchange Commission, was a relief to investors who have been watching Citi's share price break the buck as the company has struggled to stay afloat.

The government has stepped in repeatedly to bolster Citi, most recently last week when it agreed to take up to a 36% stake in the company. Pandit's letter said that, so far, the first quarter of 2009 has been the best since the third of 2007, the last time Citi was profitable. Yet, the letter did not specify how much credit losses and other one-time items would offset the profit. (Full story)

03-10-2009, 01:12 PM	#92
fluid.forty.one Moderator Join Date: May 2006 Posts: 19,413	Big rally on Wall Street Major gauges surge as Citigroup helps charge up a rally following the recent bloodletting. NEW YORK (CNNMoney.com) -- Markets surged Tuesday afternoon, recovering from multi-year lows, after Citigroup cooled some worries about its solvency and talk resurfaced that the SEC could reinstate a key trading rule. Investors also considered comments from Federal Reserve Chairman Ben Bernanke about the need for an overhaul of the financial system. The Dow Jones industrial average (INDU) gained 300 points, or 4.6%, with around 2-1/2 hours left in the session. The Dow ended the previous session at its lowest point since April 15, 1997. The S&P 500 (SPX) index gained 35 points, or 5.3%, after ending the previous session at the lowest point since Sept. 12, 1996. The Nasdaq composite (COMP) climbed 74 points or 5.9%, after ending the previous session at its lowest point since Oct. 9, 2002. Citigroup (C, Fortune 500) shares jumped 34%, leading a broader rally in the financial sector. Bank of America (BAC, Fortune 500), Wells Fargo (WFC, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500) were among the stocks rallying. The KBW Bank (BKX) sector index climbed 9%. But the rally was broad based, with all 30 Dow components rallying. In addition to the Dow's financial stocks, other big gainers included Alcoa (AA, Fortune 500), Caterpillar (CAT, Fortune 500), General Electric (GE, Fortune 500) and General Motors (GM, Fortune 500). A variety of big tech shares jumped, too, including Cisco Systems (CSCO, Fortune 500), eBay (EBAY, Fortune 500), Dell (DELL, Fortune 500), Google (GOOG, Fortune 500) and Dow component Intel (INTC, Fortune 500). "Citigroup got us started but then Barney Frank came out and said that the uptick rule could be reinstated and that helped a lot too," said Tom Schrader, managing director at Stifel Nicolaus. Rep. Barney Frank, D-Mass., the head of the U.S. House Financial Services Committee told reporters Tuesday that the Securities and Exchange Commission would restore the "uptick rule." The uptick rule -- which was in place until July 2007 -- limits short sellers from adding to the downward momentum of a stock that is already plunging. In short selling, traders make money when the price of a stock falls. Critics say the ending of the uptick rule has added to the selling in the financial sector stocks over the last year and a half. Stocks were also bouncing back in response to the recent bloodletting in the markets. 0:00 /1:33Waiting for the bears Year-to-date, the Dow and S&P 500 were down around 25% as of Monday's close, while the Nasdaq was down around 17%. In light of the massive selloff, analysts have been saying for some time that the market is due for a sharp, bear market rally. That seemed to be taking hold Tuesday morning. The rally is an oversold bounce off these recent levels, Schrader said, but it also has the potential to usher in a bigger advance within the ongoing downtrend. That was also the case after the stock market hit lows in both October and November of last year. "There's a chance that if this gets enough gas, it could move up a lot more," Schrader said. "There's tons of cash sitting in money markets and if people start to think they're going to miss out, they're going to want to jump back in." The Dow and S&P 500 ended at fresh 12-year lows Monday after Merck's $41 billion purchase of Schering-Plough failed to distract investors from worries about the economy. March 10 is a dubious holiday for the Nasdaq. It's the 9-year anniversary of the day it hit its all-time high of 5048.62 at the height of the tech boom. As of Monday's close, the tech-heavy index was down 75% from its peak. (Full story) Banks: Citigroup (C, Fortune 500) CEO Vikram Pandit, in a letter to employees, said the bank was profitable year-to-date and that it is confident about its capital position. The letter, filed with the Securities and Exchange Commission, was a relief to investors who have been watching Citi's share price break the buck as the company has struggled to stay afloat. The government has stepped in repeatedly to bolster Citi, most recently last week when it agreed to take up to a 36% stake in the company. Pandit's letter said that, so far, the first quarter of 2009 has been the best since the third of 2007, the last time Citi was profitable. Yet, the letter did not specify how much credit losses and other one-time items would offset the profit. (Full story) Last edited by fluid.forty.one; 03-10-2009 at 01:13 PM.