New Hope For Economy Makes Stock Markets Perform Well
The Dow Jones Industrial on Friday was up, finishing its largest 6-week rise since July pf 1938. The Dow is up almost 23% over that time. The S&P 500 also closed higher and is in the midst of its longest streak of gaining weeks since 2007. A recent survey by Reuters and the University of Michigan showed that the confidence of US consumers is on the rise for the first time since September when Lehman Bros. suffered a sudden collapse. General Electric, as well as Citigroup both released quarterly reports which contained much better results than were expected. This boosted the broader market and other bank stocks started climbing as investors predicted other banks to follow Citigroup’s lead.
Bank of America, which will post their quarterlies on Monday closed almost 3 percent higher. The KBW Bank index rose almost 3.5% and is almost twice its lowest level this month. GE stocks also saw a significant gain. Economists say that the economy is stabilizing as data comes in that indicates credit markets are performing well. The Dow Jones gained almost 6 points Friday, while the S&P gained a little over 4 points and the Nasdaq gained just over 2 and a half.
The S&P’s streak of weeks posting a gain represents gains of almost 29% since the market hit a twelve year low early in March. This has decreased it’s year-to-date losses to about 4%. Nasdaq’s numbers were helped by Apple, whose stock rose more than 1.5%. Apple, who manufactures the popular iPhone and iPod, will post its quarterly numbers next week. Meanwhile, Google, who posted strong quarterly results Thursday, gained about 1%.
Other companies posting gains on Friday were McDonalds (up 2 ½%), Proctor & Gamble (up 2.3%), and Johnson & Johnson (up 1.5%). Citigroup, on the other hand, dropped more than 8% after posting a loss for the 1st quarter. Trading on the New York Stock Exchange was heavy, with almost 2 billion shares traded. Compare that to the daily average in 2008 of about 1.5 billion. The Nasdaq saw about 2.4 billion shares traded compared to 2008’s daily average of 2.3 billion. Stocks posting gains outnumbered losing stocks by about 2 to 1.