After Early Struggle, Markets Regain Footing
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Monday, July 13, 2009; 4:52 PM
Financial stocks lifted the markets more than 2 percent today after a shaky start following four consecutive weeks of declines.
The blue-chip Dow Jones industrial average was up 2.3 percent, or 185.16 points, to 8331.68, while the broader Standard & Poor's 500-stock index rose 2.5 percent, or 21.92 points, to 901.05. The tech-heavy Nasdaq rose 2.1 percent, or 37.18 points, to 1793.21.
The major indexes were struggling to find direction this morning when a prominent financial analyst expressed confidence in Goldman Sachs and the banking sector. That primed financial stocks for a 3.5 percent jump today and boosted investors' hopes for the slew of earnings reports this week. Goldman is scheduled to report second-quarter results tomorrow morning.
"I think this morning there is rising optimism about what some of the big banks might say," said Carl Beck, a partner with Harris Financial Group in Richmond.
Goldman shares rose 5.3 percent, or $7.57, to $149.44, and J.P. Morgan increased 7.3 percent, or $2.37, to $34.71. Bank of America shot up 9.2 percent, or $1.11, to $12.99.
Stock markets have declined for the past four weeks, and Beck said this week's performance will hinge on whether firms reporting earnings offer hope that the recession's stranglehold will ease over the course of the year.
"If some of the guidance is a little bit cloudy or raises further questions, I think you could see the market struggle for a little while," Beck said.
In addition to earnings, the U.S. Commerce Department is preparing to release June retail sales results tomorrow, a key barometer of consumer spending. Sales are expected to rise a solid 0.4 percent from the previous month. On Wednesday, the Federal Reserve is slated to release the minutes of its late June policymaking meeting and issue projections for unemployment, inflation and growth over the next few years.
Stock markets rallied in Europe, with London's FTSE 100 rising 1.8 percent to 4202. But Asian markets fell on investors' fears of a disappointing earnings season. Both Japan's Nikkei 225 and Hong Kong's Hang Seng index declined 2.6 percent.
Staff writer Neil Irwin contributed to this report.
