A week of gains, and not small ones either. The question on people’s mind now is what’s behind the rise and will it last.
Much of the rally appears to have been driven by activity in the drugs sector. A flurry of mergers this week sparked gains that overcame downward momentum in energy. Also, a few of the big banks came out and said they actually made money in the first two months of the year.
Now, making a few million bucks at the very start of the year after being rescued by government billions isn’t exactly a signal that all is well with the financials, but after the battering suffered by the likes of Citigroup Inc. (C), Bank of America Corp. (BAC) and Morgan Stanley (MS), it is apparently enough to spur some buying. As to whether the rally will last or merely sets the stage for a new leg lower, stay tuned.
The Dow Jones Industrial Average (DJIA) rose 53.92 points or 0.8% on Friday to close at 7,223.98. For the week the index was up 9%. The Nasdaq Composite Index (COMP) added 5.4 points or 0.4% to close at 1,431.50 on Friday, a 10.6% gain for the week. The broader S&P; 500 Index (SPX) rose 5.81 points or 0.8% to close at 756.55 on Friday. The index’s gain for the week came to 10.7%.
Maybe the market trend will continue into next week. Hopefully, the combo of rain this week in the South and temps in the 70’s next week will kick start the season into high gear.
It’s been said by not-a-few people that the fluctuations in the market are merely attempts by the powers that be to influence economic perception and public policy. I understand that owners of large amount of stock can easily drive the market with their buying and selling, but do these gains actually signal a possible upswing the economy, or could they just be attempts to make certain public figures look good?