A market starved for good news will celebrate even if it receives a few crumbs thrown from the master’s table.
That’s exactly what happened today when the Dow Jones Industrials reclaimed the 12,000 level, and the broader market registered a strong advance.
Stocks have been down for six-straight weeks – the worst losing streak in almost 10 years, according to MarketWatch.
The culprit – a slowing economy and fears that the second soft patch in as many years might morph into something worse.
Much of the economic data is not pointing to a new economic slump but you wouldn’t know that based on the weak performance in stocks over the last month and the surprisingly strong Treasury market.
But when government data delivered a May report on retail sales that met reduced expectations and failed to disappoint on the downside, the bulls quickly tripped up the bears and an oversold market rebounded nicely.
Short covering probably played a role in today’s rally, but a sizable hit to bonds does suggest money came out of safe assets and found their way into riskier securities.
Tuesday, June 14, 2011
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