Round two- Stocks are up again

[Neil D]

Suck on this nay-sayers..Look at what I found in my wandering. It's time to be a bit more positive in your life....This is from BussinessWeek, an economic magazine.

Stocks: Is the Worst Over?

Some analysts believe the recent rally is a sign that equities hit bottom in early March. But other pros think there are still too many uncertainties

By Ben Steverman

Nobody is dancing in the street, but Wall Street is a considerably cheerier place lately. Moods have been lifted by a strong stock market rally, sparked when stocks in early March hit their lowest prices since the mid-1990s. Stifel Nicolaus (SF) market strategist Barry Bannister went so far as to declare: "Mar. 6, 2009 was probably the equity bottom for 2009."

By Mar. 6, when the broad Standard & Poor's 500 index hit an intraday low of 666, stocks had finally deflated a decade-old bubble, he believes. "We appear to have unwound the entire U.S. equity bubble phase that commenced in 1995," he wrote Mar. 18.

The actions of Washington policymakers have helped raise investors' hopes. Stocks shot up March 18 when the Federal Reserve said it would spend more than $1 trillion extra to buy up debt, an aggressive effort to unclog credit markets and revive lending to students, buyers of homes and autos and others in need of financing. To end the financial crisis and revive the economy, "you've got the federal government pulling every trick out of their book bag," says Mark Travis, chief executive of Intrepid Capital Management.

The Turning Point?

Investors who remain bearish could be caught short if U.S. Treasury Secretary Timothy Geithner unveils a "plan to heal the financial sector," a move that could come within a week, wrote Nick Kalivas of MF Global Research (MF) on Mar. 19.

Professional investors know that calling a stock market bottom is very difficult and can be a fool's game. "You never really know you hit bottom until way after the fact," says Wasif Latif, an equity manager at USAA.

But that doesn't mean market participants don't try to identify and profit from the big market turning points. The S&P 500 is up 14% since the Mar. 6 low. So if investors can hold onto those gains, a lot of money will have been made.

Bear Losing His Grip

Peter Cardillo, chief market economist at Avalon Partners is reasonably optimistic. The market may re-test March's lows, or even dip a little lower, but not by a wide margin. "The tight bear grip on the market has weakened considerably," Cardillo says. One sign of "a better frame of mind" on Wall Street is investors seem to be reacting favorably to good news, which has included some positive talk from bank CEOs and some better-than-expected economic data.

Market pros often cite the conventional widsom that stocks move higher six months before the economy does. Fed Chairman Ben Bernanke has predicted that the recession will end this year and a recovery will begin next year. Yes, the job market continues to worsen, but, Cardillo says of the economy, "the fear of a total collapse has all but dissipated."

Michele Gambera, chief economist at Ibbotson Associates, a subsidiary of Morningstar (MORN), looks at leading economic indicators and also sees some faint signs of hope. "It has stopped getting worse," he says.

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[Neil D]

Here's another summery from the economic area....Negative people need not reply...well, on second thought, let's see how they would spin this trend...

COMBINED NEWS REPORTS

March 22, 2009

It's safe to use the words "winning streak." Barely.

The Dow Jones industrial average, led by the beleaguered and beaten-down financial sector, put together its first back-to-back weekly gain since May. The question on Wall Street is whether there will be enough good news in the coming days to keep stocks rising.

Michael Binger, portfolio manager at Thrivent Investment Management in Minneapolis, said the market is signaling that the economy is hitting bottom. He said it shouldn't be too difficult for stocks to keep moving higher because expectations have fallen so low.

"I think the stock market is saying that fourth quarter of 2008 and first quarter of 2009 may be the trough in negative news," Binger said.

The Dow closed Friday at 7,278.38, a gain of 0.8 percent for the week. The Nasdaq composite index finished at 1,457.27, up 1.8 percent. The Standard & Poor's 500 index ended the week at 768.54, a rise of 1.6 percent for the week.

The stock market began to rally from multiyear lows beginning two weeks ago after several banks reported being profitable in the first two months of the year. At last week's high point Wednesday, the S&P 500 index was up 19 percent from its 12-year low, set March 10. But last week's gains were almost wiped out by losses on Thursday and Friday, leaving some analysts concerned about the nascent rally.

"How can you justify a 20 percent higher market when things haven't gotten 20 percent better?" said Richard Campagna, chief investment officer at 300 North Capital in Pasadena, Calif. "The economy may be bottoming, but it's still struggling."

[Woody]

Yes dgrimm ... we will have to wait.