Dow soars 889, heading for the heavens

Stocks sputtered after initial big gains, then markets skyrocketed in the last 2 hours closing at the highs. Bargain hunters were out in full force. Dow rose an astounding 891 (what must be a record breaking 11%) taking it over 9K, advancers over decliners by a relatively modest 3½ -1 & NAZ rose 143. Every Dow stock was up including General Motors (GM) which rose 15% to reach the magic price of $6.25.

Tech stocks did very well with 10% gains led by Amazon (AMZN), Cisco (CSCO) & Dow stock Microsoft (MSFT). The Bigcharts charts on the right show what record breaking gains look like, with most buying coming in the last 2 hours. This rally will help limit damage done in Oct from falling markets, but keep in mind Dow started the month at 10½K (a long way up from here). The VIX (Volatility Index) dropped 13 to 67, remaining in the heavens.

In an extremely oversold market where it was hard to find a loser, the S&P 500 FINANCIALS INDEX up 22 to 201, the Alerian MLP Index was up a more mild 6 to 211 remaining in its recent range-bound area near 210, the overly beaten up Dow Jones REIT Index jumped 24 (18%) to 160 & even boring junk bonds funds were generally up although many did not really participate in the broad rally. All these securities are noted for extremely high yields, many well into double digits. Maybe buyers have been reading my suggestions about locking up high yields going forward into a very difficult economic period.

Meanwhile, the most watched commodity, oil, was down pennies & gold sold off a couple of dollars. Call that essentially even.

Let's forget about trying to figure out what the rally means other than we were in an over, over, oversold market & this is what can happen under these conditions. "Bargain hunters bid up prices" was my headline last Thurs when Dow rose 102. Today was a bigger version of that day. Clearly caution was thrown to the winds. Dreary consumer confidence numbers meant little. Yes the Federal Reserve rate cut is coming, but that has been pretty well advertised. There will be more rate cuts around the world to help increase lending for restarting economic growth. Bloomberg TV reported today that the Japan central bank will cut their rate by 25 basis points (i.e. a 50% cut). Enjoy today's gains!