MARKET SNAPSHOT: U.S. Stock Rally Fuels Dow To 8th-biggest Point Leap Ever

CNNmoney.com ^ | April 01, 2008 | CNN

[DoughtyOne]

I agree with you.

I have been very critical of the moves to turn our manufacturing and trade upside down. I have been very critical about open borders.

Our nation became second to none without these two problems. Now we supposedly can’t get along without them.

We used to have a healthy view of globalism, and now we can’t get enough of it.

Very strange days...

[groanup]

A 400 point run-up on extremely negative financial news is as a poster said earlier - bull trap.

Au contraire. Jesse Livermore always said that a market that rallies on bad news is reacting to smart money or insider buying. It is the best indicator of a looming bull market that there is. Don't ignore it.

But the news wasn't really bad. In fact the indicators released today all came in better than expected.

[RightWhale]

Good. This sounds like a reasonable explanation. The stock market might be good to us right up until National Election Day in Nov. Then who knows.

[politicket]

There are signs that the credit markets are healing. It’s covered in the excerpt, you don’t even have to click the link.

There were no specific signs mentioned in the excerpt.

Lehman was mentioned. They are about to undergo an effort to raise reserve capital and thereby dilute their stock. Is that good news? I wouldn't think so.

How about UBS? They just wrote off another $19 bilion for the 1st quarter. They are also going to try to raise reserve capital and dilute their stock. Is that good news? I wouldn't think so.

How about some Wall Street Journal headlines for the day. Surely that must be where the good news exists:

Sales Slump at Auto Makers. Is that good news? I wouldn't call it that.

Senate's Housing Gridlock Eases. Is that good news? Some might think so - but upon reading the article you would quickly find out that the American taxpayer who pays their bills will be subsidizing those that don't. So, I would have to put that one in the bad news column as well.

I'm still waiting to hear what the good news was that created a 400 point rally in the Dow. Can you please point it out to me?

[Cobra64]

WHAT’S THIRD ON THE MSM AND DEMS TALKING POINTS FOR THE 2008 ELECTION?

WHAT? I CAN'T HEAR YOU. SPEAK UP!

[groanup]

How does the interest on our debt go to the Federal Reserve? The Fed actually pays that money, plus other funds BACK to the Treasury every year.

[Cobra64]

...but want people to realize that things are not good in the financial world right now.

I don't think that at all. However, I believe that the market is stabilizing, which I something that I welcome.

[politicket]

In fact the indicators released today all came in better than expected.

The indicators were all down, but not as down as some were expecting.

There were no indicators that gapped up to show a recovery under way.

I look at the rally today as people holding a lot of dangerous stock unloading it to those who don't gamble very well. We haven't seen the worst of this financal mess yet and people are acting like it's over.

[Cobra64]

There are signs that the credit markets are healing.

Bingo! Let the market deal with it.

[cinives]

Yep, the pump monkeys are dancing madly.

Don’t look at the trillions in derivatives and the 1T in HELOCs that are probably not collectible at this point. Not to mention the still-falling RE valuations and such.

The taxpayer will make everything good and we can go back to the party now.

[cinives]

http://market-ticker.denninger.net/2008/04/we-no-longer-live-in-constitutional.html

You’ll like this guy.

[politicket]

Thanks, interesting read.

I was still up late last night when the UBS news broke. The Heng Seng index in Asia was still in its intra-day break. Once the break was over the index fell like a rock. The Dow futures were down about 60 points at the time, with the S&P down about 10.

All of a sudden, everything began turning North and went green. That's what I call game-playing.

[groanup]

We haven't seen the worst of this financal mess yet and people are acting like it's over.

Why do you say that?

UBS stock was up double digit percent today. A stock rallying like that on bad news can only mean one thing.

[groanup]

All of a sudden, everything began turning North and went green. That's what I call game-playing.

Or short covering, or rallying.

[cinives]

On Ticker Forum we call it stick-saves. You routinely see it about 2:15 in the PM.

I don’t know how people can be so short-sighted - if writing down billions and billions of dollars was good, then the DOW should already be at 16,000 or better.

[politicket]

UBS stock was up double digit percent today. A stock rallying like that on bad news can only mean one thing

UBS just wrote down $19 billion of bad debt, bringing their 6-month total to $37 billion. Their chairman resigned. They are going to dilute their stocks by issuing new stock to raise $15 billion in capital.

It would be interesting to see who the buyers of UBS were last night. I would think that the findings might surprise you.

In answer to your question about why UBS went up last night:

Click here

In part: "However, bankers and analysts cautioned that the rally could also reflect the large number of hedge funds and other investors who had bet that prices would go down and were retreating from short positions."

[Freedom_Is_Not_Free]

The massive volatility in the market is what I find worth noting. 350 pt up days followed by 400 pt down days. This is the most volatile market with the wildest and widest swings I can recall in recent history. I wasn’t paying as much attention during 2000-2001. Was it this bad?

[Freedom_Is_Not_Free]

Just for the record, this crisis is a different than previous market corrections. The FED is taking measures not invoked since 1929. Lets not be fooled into thinking that this liquidity crisis is like any other normal bear market in equities.

[TruthConquers]

“Who (were) the buyers of UBS last night?”

That is the question, is it not?

I’m with you, the credit mess is still percolating below the surface of all this make nice, moving along, nothing to see hear, talk.

[Freedom_Is_Not_Free]

I must have missed the signs that lenders are more willing to lend money now for residential RE, Commercial RE, LBOs, etc... than last month or the month before. Can you please spell this out for me?