Stocks rally to 4-month highs

[Amerigo Vespucci]

Source: CNN

NEW YORK (CNNMoney.com) -- A U.S. stock rally continued to pick up speed through Monday afternoon, with all three major indexes closing at four-month highs after a key group of economists called an official end to the recession.

The Dow Jones industrial average (INDU) gained 146 points, or 1.4%, to end at 10,753, its highest close since mid-May. The tech-heavy Nasdaq (COMP) rallied 40 points, or 1.7%, to finish at 2,355.

The S&P 500 (SPX) added 17 points, or 1.5%, to close at 1,142. The index crossed 1,130, a key technical level watched closely by analysts, early in the session and continued to surge in the afternoon to cross the next short-term technical level of 1,140.

"The S&P has tried to sit above the 1,130 level in June, August and last week but failed, so the fact that it has broken up above that point and is staying there is considered a positive sign for the bulls and forcing traders to come back in," said Donald Selkin, chief market strategist at National Securities.



Read more: http://money.cnn.com/2010/09/20/markets/markets_newyork/index.htm?hpt=T2

[cal04]

1. Stocks rally on NBER’s end-of-recession call

http://www.marketwatch.com/story/us-stocks-rise-on-uks-stable-outlook-2010-09-20

U.S. stocks closed at their highest level in more than four months on Monday, one day ahead of a Federal Reserve meeting as encouraging financial and home builder earnings boosted confidence in the economic recovery.

Bulls’ bid to extend a three-week winning streak was also helped after the group in charge of dating the starts and ends of economic downturns declared that the U.S. recession ended last summer.

“It doesn’t mean growth is robust, but it is growth,” Paul Nolte, managing director at Dearborn Partners, said of Monday’s declaration by the National Bureau of Economic Research that the longest U.S. recession since World War II ended in June 2009. Read the NBER’s full statement on the recession.

[Thav]

2. Time to tell all the businesses to start hiring like crazy!

After all, the recession was done over a YEAR ago!

[dixiegrrrrl]

4. Time to entice suckers back into the market.

[girl gone mad]

8. Insider Selling Outpaces Buying By Over 290-To-1 In Past Week

According to Bloomberg, for the week ended September 17, corporate insiders bought $1.4MM in shares in a whopping 7 different companies. This was just marginally offset by sales of $441MM in 98 different companies, a ratio of 290 to 1 of stock notional sold to bought. But wait: this is GREAT NEWS: last week the ratio was 650 to 1! So this is a huge improvement and certainly yet another reason for today's rally, even though last week total notional sold was $332 million, or just under 25% lower, and sellers came in well lower at "just" 72. But who needs details when you have the Fed... Certainly not retail, which has now pulled money out of domestic stock funds for 19 straight weeks. So for those wondering just who is orchestrating today's move higher, please let us know if you find out.

http://www.zerohedge.com/article/insider-selling-outpaces-buying-over-290-1-past-week

Nailed it.

[unblock]

9. nber did not rule out a "double dip". all they did was clarify that if this happens,

it would be two distinct recessions, as opposed to one long recession with a brief period of improvement in some economic statistics in the middle.

in that sense, their determination wasn't really informative in any meaningful way regarding the future, so any market response to it today is irrational.

more likely, the market was responding to OTHER news. what happened a year ago isn't "news".

[SteveM]

3. WOW! I bet they'll use that one again -- in about a year. nt

[earthside]

5. Wow!

Did I miss the announcement over the weekend that unemployment has fallen below five percent?

What changed that caused the Wall Street casino to 'surge'? Did the gamblers double-down because a board of egghead economists 'calculated' that the recession ended fourteen months ago?

Today is yet another example of how disconnected the micro-second stock traders are from the reality of the vast majority of Americans.

[tridim]

7. Don't underestimate the power of public psychology.

If this news causes people to spend just a few dollars more, it will help immensely.

[unblock]

10. the market's move most likely had nothing to do with nber's determination

most people who assign a specific meaning to a day's market movement have no idea what they're talking about.

most days, there's quite a lot of information pushing some prices up and others down, then there's simply people deciding to rotate out of one investment and into another, plus there the effect on stock prices of bond prices, commodity prices, economic statistics, etc.

to narrow it down to one or two big factors is usually facile; that same information on another day might have had a very different effect.

[Art_from_Ark]

12. I see that all the time with the precious metals markets

Day 1: Investors buy gold as a "safe haven against a falling dollar"
Day 2: Investors sell gold because of "dollar gaining strength"
Day 3: Investors buy "safe haven gold" because of "concerns about inflation"
Day 4: Investors sell gold because of "reduced fears of inflation"

Lather. Rinse. Repeat.

[Turbineguy]

6. Elizabeth Warren appointment.

Markets go up because money flows in instead of out. Money flows in because people perceive Wall Streetsters won't be able to steal it. Warren is not fixed to an agency in particular. That means she can go anywhere.

This puts paid to any GOP bullshit about the markets going up if they get back in and repeal regulation. Last week it was the banking deal in Switzerland, reducing risk. People want reduced risk. That means more regulation. Even if it's just enforcing what's on the books now.

(Channeling Joe Biden): Mister President, you're a fucking genius!

[dixiegrrrrl]

11. Interesting point. I am watching and waiting.

There are some signs the tables are turning, esp. re: the mortgage fraud.