Wall Street has a dream day

Posted Mar 11th 2008 5:15PM by Jonathan Berr
Filed under: Major Movement, Exxon Mobil (XOM), Indices, Citigroup Inc. (C)

Folks on Wall Street must be pinching themselves to make sure the past 24 hours aren't a dream.

First, the reviled Eliot Spitzer was caught up in a prostitution scandal that will probably cost him his job as governor of New York. A day later, the markets had their biggest gains in almost five years after the Federal Reserve said it would inject $200 billion into the financial markets that have been pummeled by concerns over subprime mortgage crisis.

Since good things come in threes, what's next? A repeal of Sarbanes-Oxley, maybe an abolition of the capital gains tax? Why not abolish the IRS and SEC while you're at it and let capitalism run free as an unregulated bird? If you are going to dream, dream big!

But getting back to today, people gobbled up stocks as if they were eating their last meals on death row. Nine stocks gained for every one that fell on the New York Stock Exchange, according to Bloomberg News, which noted that financial shares, including Citigroup Inc. (NYSE: C), had their biggest gains since January and that Exxon Mobil Corp. (NYSE: XOM) gained the most since October 2002.

The 416-point rise in the Dow Jones industrial average was its biggest one-day gain since July 2002, according to The Associated Press. The NASDAQ Composite Index soared 86.42, or 3.98%, to 2555.76 while the S&P 500 jumped 47.28, or 3.71%, to 1320.65.

While that's quite an impressive performance, it's time for a little perspective. This market's psyche has been so fragile that if it were a person, the commitment papers would have been signed a long time ago. The symptoms of bipolar disorder (formerly known as manic depression) include exuberant highs and cataclysmic lows. In other words, more bad news would erase these substantial gains pretty quickly.

But those concerns are for another time. Investors should look at today as a reminder that bad times don't last forever. They should also remember that the light at the end of the tunnel may be a train. A note of caution is always warranted on days like today.

Tags: C, DJIA, Eliot Spitzer, EliotSpitzer, inthenews, NASDAQ, XOM

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Reader Comments (Page 1 of 1)

3-11-2008 @ 6:38PM

cesar figueroa said...

this is all BULL-shit, the bulls are scared

3-12-2008 @ 8:09AM

kcoryms said...

If you haven't put your money in a safe haven yet now would be the time. The fed and wall street are trying their best to sucker people back into this bogus market and they will drop the hammer and take your money. These lying fools have to do whatever it takes to screw you out of your money so they can pay off all their losses. If you actually beleive this market should go up when all these problems are occurring at the same time good luck. They are sweating to keep their miserable jobs of stealing your hard earned savings and retirement funds. The more your in debt the happy these guys are.