<<Once the stimulus package is finalized, it will be interesting to see how the market reacts. Do we sell the news or will we get a relief rally?>>
Here is the 15 minute ago assessment of the situation from Briefing.com
<<13:00 ET
Focus On Financials Drives Rally
Dow +170.52 at 8233.59, Nasdaq +34.05 at 1580.29, S&P +16.46 at 862.31
[BRIEFING.COM] Similar to the prior session, stocks are trading higher in a rally led by financials. The sector's advance comes as investors await a plan that will aim to remedy the troubles of banks and other financial institutions.
Investors' focus on the forthcoming plan (to be announced Monday by Treasury Secretary Geithner) has rekindled hopes that a sort of "game-changing" bailout plan will soon unfold. Details remain unknown, but there is suspiscion that it will involve the expansion of existing government lending facilities, as well capital injections. Such moves would steer away from nationalization threats.
Anticipation of the plan has helped investors look past a truly ugly January jobs report. Nonfarm payrolls fell 598,000 in January. That was the largest drop in decades and exceeded the consensus estimate. Unemployment now stands at new muliyear high of 7.6%, up from 7.2%, and above the consensus forecast of 7.5%.
The ongoing flow of dismal economic data has largely conditioned market participants to expect the worst, though. Yet rather than rallying after the data hit, the tone among traders strengthened into the number and after its release.(in other words, the traders didn't care what the news was - they were going to buy anyway)
Financial stocks remain the session's strongest performing sector. Leadership from Bank of America (BAC 6.13, +1.29) and Wells Fargo (WFC 18.72, +2.45) is helping the financial sector trade with a 6% gain.
Though this session's primary focus remains on the financial sector, market participants also await the latest version of the economic stimulus plan. Though the economic stimulus plan is meant to be more encompassing than the financial plan, its long-term focus has many believing it will not provide the immediate catalyst necessary to drive a recovery in the near term. Though there are reports the plan could be passed by this weekend, concerns remain regarding whether it can receive adequate support. |
