Better than expected earnings, inline inflationary data, and growing confidence on Wall Street that the credit crisis is over produced one of the most positive weeks of the year.
For the week, the Dow rallied +4.25%, the S&P 500 +4.31%, Nasdaq +4.92%, and the Russell 2000 +4.78%.
Although just about everything was higher this week, the top performing sectors were oil & gas, mining, brokers, shipping, farm products, agricultural chemicals, internet, railroads, tech, heavy construction, banking, trucks, healthcare, and semiconductors. The laggards were airlines, resorts & casinos, diagnostic services, and medical equipment. We also saw a major flight away from safety as investors dumped Treasuries. As you might expect, it was a good week for my stock screen machine as 95% of the stocks closed the week with a gain.
Along with lots more earnings (two-thirds of the S&P 500 companies have not yet reported earnings), we'll have overbought conditions (and looming overhead resistance) to deal with. In addition, it will be interesting to see how much Wall Street will want to press higher with another Fed meeting coming up at the end of the month. It may be a tough sell for another big rate cut now that stocks are soaring again and Wall Street keeps telling people the worst is over (though I'm sure they'll still try their best). So, look for that to play an increasing role in sentiment as we face the new trading week.
Have wonderful weekend!