Stocks Open Higher as Banks Rally Again
Stocks opened higher Monday as banks continued their winning streak and Federal Reserve Chairman Ben Bernanke's weekend remarks that the recession could end this year.
"This (economic) decline will begin to moderateand we'll begin to see a leveling off," Bernanke said during an interview on "60 Minutes" Sunday.
What traders really responded to was Bernanke's remarks about why stabilizing the financial sector is so important and that the government has to continue to be very aggressive.
In today's economic news, the Empire State Manufacturing Index found another new low in March, with a reading of minus 38.23 against expectations of minus 32.0. And industrial production fell for a fourth straight month in February, dropping 1.4 percent, more than the 1.1-percent decline expected.
The Dow and S&P advanced about 1 percent, while the Nasdaq skidded, dragged down by weakness in some big-name techs like Intel and Apple .
Today's gains follow a four-day streak last week that left all three major indexes up about 10 percent for the week — the market's best week since November.
Bank shares continued to rally, with after British bank Barclays echoed comments from U.S. banks last week, saying it had a "strong start" to 2009.
And HSBC said it won't need to raise more cash— or get any more bailout money from the goverment — after its recent $18 billion rights issue.
Major European and U.S. banks benefited heavily from the bailout of American International Group, a list of its counterparties published Sunday showed. The biggest U.S. beneficiary was Goldman Sachs.
Citigroup shares topped $2, while Bank of America was over $6.
General Electric was flirting with the $10 mark after UBS removed the conglomerate, the parent of CNBC, from its short-term "sell" list.
Dow energy components ExxonMobil and Chevron retreated as crude oil dropped nearly $2 following news that OPEC doesn't plan to cut production.
More encouraging reports that authorities across the world were trying to contain the economic crisis came Monday, when the Nikkei business daily said the Bank of Japan is considering purchasing subordinated debt issued by banks to help bolster their capital.
But as G20 finance ministers made tentative advances during their preparatory talks at a countryside hotel south of London at the weekend, promising to raise the amount of funds available for emerging market economies that cry out for help, analysts said the group still does not have the "magic bullet" for the crisis.
MONDAY: NAHB housing index
TUESDAY: PPI; housing starts; Earnings from Sirius XM, Adobe; Apple preview of new iPhone software; Two-day Fed meeting begins
WEDNESDAY: Weekly mortgage applications; current account; weekly crude prices; Chicago Midwest manufacturing index; Earnings from General Mills, Oracle and Nike; Fed decision on interest rates; House hearing on AIG
THURSDAY: Weekly jobless claims; leading indicators; Philly Fed survey; Earnings from FedEx; GE to provide details on GE Capital
FRIDAY: Quadruple witching; Fed's Bernanke speaks about financial crisis at bankers' convention in Phoenix