Tuesday, July 8, 2008

Late day rally sends stocks higher!!

Yes stocks can go up!! In the last 2 hours stocks did just that. Dow was up 152, advancers over decliners 2-1 (not all that great a ratio) & NAZ went up over 2% or 51 points. S&P 500 at 1273, is just over the 1270 line some have drawn as significant. Financials, real estate & drugs, among others, found buyers for oversold stocks. Low priced Bank of America (a Dow stock) rose 2 to 23½. Of course just a couple of months ago it was hard to imagine BAC going down to "only 23½." The markets were EXTREMELY oversold, plenty of reasons for nibblers to get excited. One a key item giving them courage was the drop in oil today, down 5.33 to 136. Not participating in the rally were energy stocks, typically down 2-4% along with oil. The Alerian MLP index following oil, fell 4 to 265 but earlier in the day was hovering at the 262 low from a few months ago. These represent pipeline companies, a little different than oil stocks, but they seem to be greatly affected by swings in oil prices.

Alcoa, the first Dow stock to report earnings, said Q2 profits were 66¢, below last year (81¢) but beat forecasts, the same story we have been hearing. General Electric (GE) reports at week's end. Bloomberg TV had an excellent interview with Michael Steinhardt. He has a superb track record over the last 30 years & called the market's top correctly last year. He is gloomy about going forward it the markets, check out his thoughts on my attachment.

No comments: