Posted on 08/06/2007 1:20:30 PM PDT by Signalman
NEW YORK (CNNMoney.com) -- The Dow industrials surged 286 points Monday, posting its biggest point gain of the year, helped by financial sector strength just ahead of the Federal Reserve's policy meeting.
The Dow Jones industrial average (up 262.24 to 13,444.15, Charts) soared 286 points, or 2.16 percent, based on early tallies, rebounding from a 281 point late session selloff Friday.
The broader S&P 500 (up 31.47 to 1,464.53, Charts) gained 2.4 percent while the tech-laden Nasdaq composite index (up 31.80 to 2,543.05, Charts) climbed 1.4 percent.
Treasury prices retreated, raising the benchmark yield on the 10-year note rising to 4.75 percent from 4.69 late Friday. Bond prices and yields move in opposite directions. Wake up time for the Fed?
Investors also kept a close eye on oil prices which were drastically lower. U.S. light crude for September delivery lost $3.42 to $72.06 a barrel. Just a week ago, oil prices reached a record trading high of $78.77.
The dollar gained against the euro and the yen.
COMEX gold for December fell $1.10 to $683.30 an ounce.
Here's what was moving before the close:
Stocks zigzagged for most of the session as credit market concerns, which had sent the 30-stock Dow industrials tumbling 280 points late last week, continued to trouble investors.
But the lack of any new woes and signs of strength in the financial sector, which helped fuel Friday's selloff, provided some positive momentum for stocks.
The KBW Bank Index (up $5.23 to $107.07, Charts) surged over 5 percent, while the AMEX Securities Broker/Dealer index (up $8.09 to $222.44, Charts) gained 3.7 percent.
Speculation that the Federal Reserve will offer some consolation to investors at its policy meeting Tuesday in light of the recent woes in the subprime, credit and housing markets, also helped prop up stock prices
(Excerpt) Read more at money.cnn.com ...
One of these decades, it will be the short of the century. Which decade, though, I can’t discern.
>>It is worth remembering that it take 40% more dollars to buy Euro or other currencies than in 2003 - so dollar gains have to be take with a grain of salt.
Directly you’re right but there are indirect effects. Oil is priced in dollars, now Europe’s money is worth 40% more dollars so they have tremendous competitive advantage in anything that uses energy.
Europe can buy American companies for 40% less. When American companies do business overseas they have to pay 40% more.
So there are indirect effects.
>>It is worth remembering that it take 40% more dollars to buy Euro or other currencies than in 2003
one component is American budget and trade deficits - it gives the appearance of a country that can’t control itself. Plus interest on the debt is a big drag.
Ours’ has dropped by about $80k, over the last few weeks, but it’s still up by about $400k over the last 2.5 years, and the P/E ratio of the S&P 500 is lower now than it was 5 years ago.
It was from early 2000 through 2002. Too bad, you missed it.
Did you read the first sentence?
"The Dow industrials surged 286 points Monday, posting its biggest point gain of the year, helped by financial sector strength just ahead of the Federal Reserve's policy meeting."
More evidence of the MSM downplaying a positive day.
If he cuts the Fed rate by a quarter point he risks a run on the dollar. He needed to signal a loosening earlier this year. He is too late now.
His justification for an earlier rate cut would have been the previous 17 consecutive rate hikes had exceeded what was needed to bring growth inline with expectations. But he and his people look at various inflation measures and ‘anecdotes’. They do not look at growth except in subordination to inflation data.
Jim Cramer has got it right this time concerning Bernanke. Watch the following all the way to the end to see Cramer’s tantrum (but accurate in its aim):
http://youtube.com/watch?v=rOVXh4xM-Ww
We are just beginning a bear market because of the credit woes and Fed policy. Once again the Fed proves it is the causal root behind boom and bust cycles because they do not act until there is either pain or euphoria. They respond quicker to quash good times and slower to indications of pain.
The Fed needs to go. They need to be federalized, brought in under the Treasury Department where borrowing from them to fund government ceases and interest payments are no longer necessary. They create currency out of thin air. They dilute our savings and investments with their dollar creation ability causing us to scramble using short term tactics to trade ahead of inflation. Their function was exclusive to the US government since its founding until 1913. The Founders fought against an independent Central Bank like the Fed. The Fed is not owned by the US government. The Fed is run by a private banking cartel. Bernanke is their liaison to Congress. Although the President picks the Fed Reserve Chair, he picks from a list provided to him by the Cartel.
Take your pick Mr. President, Manny, Moe or Ben?; it’s all in the family to them.
The financial stocks bounced back today but that is temporary aka ‘dead cat bounce’. IMO short the financials until a major bank or brokerage goes under. That will be the bottom.
I'd rather be lucky than good any day.
I hope they break this belief in the ‘Greenspan put’. The Fed’s not here to help investors. It’s here to regulate the value of the currency.
No one held a gun to the heads of people who bought these bad mortgages.
Congrats! You must be older than us, or better at saving, LOL!
It is worth remembering that it take 40% more dollars to buy Euro or other currencies than in 2003 - so dollar gains have to be take with a grain of salt.
A 50% stock market gain valued in dollars since 2003 is only about 10% gain in international currencies or 2.5% per year - decent but nothing to get excited about.
If you didn’t throw money into the market in the wake of 9/11, I can see how you would temper your enthusiasm.
Thats not my case...(big, Sheet Eatin Grin)
‘Wait till everyone sees that gas is trading at $1.92, that will put another couple dollars in the fun fund every week.’
True.
>>If you didn’t throw money into the market in the wake of 9/11, I can see how you would temper your enthusiasm.
Thats not my case...(big, Sheet Eatin Grin)<<
Well, wherever your investments have been, if they are in dollar denominations, those dollars are worth a great deal less internationally.
Most likely older. The magic of compounding doesn’t seem to do all that much for the first decade or two (unless you are very good at investing, or very lucky), but it eventually starts adding significant amounts of money to a portfolio.
I’m currently advising a young coworker in getting started. I tell her that she will have much more money than I do, by the time she’s my age, since she’s starting earlier, and is more sensible than I was, but she doesn’t really believe it yet.
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