MV Crime Report: End-of-Quarter Market Blows Away Bears
The police blotter on the day's biggest stock stories.
It started at midnight, when there was a suspicious 10-point jump in the S&P 500 futures on large volume.
Click to enlarge
Fast-forward to this morning at 8:30 a.m, The initial jobless claims number was particularly poor, coming in at 627,000, compared to estimates of 600,000. The futures sold off on this news, losing all of the gains (and then some) from the overnight session. However, once the market opened, the losses were quickly reversed, and a rally ensued.
Some of the winners of the board-based rally were: Transocean (RIG), Freeport McMoran (FCX), Apple (AAPL),, and Ralph Lauren (RL). Notable laggards were Bank of America (BAC), First Solar (FSLR), Research In Motion (RIMM), and Monsanto (MON).
Oddly, the rally took place on no news; by noon, the market was up well over 1%. All the TV stations were focused on Ben Bernanke's testimony when the market ripped higher, again passing the 920 level.
The reason? The Fed announced modifications to its liquidity programs, extending them through 2010.
Strange? Large volume in the futures at midnight, a mysterious rally off poor economic data, and then -- right when Bernanke was getting grilled -- the Fed releases the parachute. Is it fair to say that someone knew something this morning? Did I mention it's the end of the quarter -- and mutual-fund mark-up time?
In any event, it was a great for the S&P 500: It closed up 2.14%, at 920 -- a critical level.
Professor James Kostohryz's gave his thoughts on today's Buzz and Banter:
"My position continues to be the following: If the market can finish the week above S&P 920 it will be in pretty good shape. I expect earnings season to be very constructive. Thus, if the market can simply get within striking distance of the highs in the 950 area, it is likely that positive earnings news will propel it above those highs. Furthermore, it is my position that the market could catch a "second wind" if it gets above 965.
"However, don't forget one thing: With the S&P at 917, as of right now, the market is just one session away from closing above the closing high for the year. It may not "feel" great right now. But the market has "sneaked" back up to the 920 area. Do you think it could surprise some folks by catapulting to new highs base on good earnings? Do you think that all of the jubilant bears have been confidently proclaiming that the rally is over and (according to the statistics) have been massively selling short and buying puts might have to scramble big time to cover if the market breaks 920 to the upside?"
Have a great night, Minyans!
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