Stocks went four for four Friday in a dramatic win that delivered stocks their best week since November.
The Dow Jones Industrial Average gained 53.92, or 0.8 percent, to close at 7,223.98. That brought its four-day total to nearly 700 points, or more than 10 percent. All 30 Dow stocks finished the week positive.
Even with Monday's decline, the S&P 500 and Nasdaq each gained more than 10 percent this week.
Everything from better-than-expected retail sales to Bernie Madoff's incarceration were cited for the recent runup but Art Cashin, director of floor operations at UBS, said there's some buzz that it was anticipation of "some adjustment to mark-to-market rules."
Vince Farrell of Scotsman Capital Management flagged this quote from FDIC Chairman Sheila Barr:
"We think it is absolutely true that the assets (meaning the impaired assets on bank balance sheets) are worth more than the current market conditions assigned to them and so that, yes, over time, there will be significant profits from these," FDIC Chairman Shelia Barr said in an interview with American Public Media.
"Ms. Bair's assessment would appear to substantiate the position that Vince and I share with Steve Forbes and lots of others that many, if not most bank assets have been marked down way, way too low. That's the fault of mark to market," Cashin wrote in his morning note to clients.
Of course the question on everyone's mind is: Will the rally last?
"This was the first part of the move. This was the easy part of the move, where shorts get squeezed, bottom feeders come in and it puts the stock market back on the map," Scott Redler, chief strategic officer for T3live.com, said on CNBC this morning. "What we now need to see is some nice price consolidation in these higher levels, make investors and traders think they're missing something and then I think this rally can continue higher over the next few weeks."
Financials were the week's biggest gainers, gaining nearly 34 percent, after Citigroup gave the sector a shot in the arm, saying they were profitable in the first two quarers of the year. And Chairman Richard Parsons capped it off Thursday, saying the bank doesn't need any more capital injections from the government and expressed confidence that Citi would remain in private hands.
Citigroup shares jumped 6.6 percent today, ending the week at $1.78.
Bank of America shed 1.5 percent today but ended the week at $5.76.
Bank of America CEO Ken Lewis said it would be a "nightmare" for U.S. banks to be nationalized, wiping out shareholders and perhaps bondholders, and further damaging an economy that might begin to recover as soon as this year. He added that he was confident that Bank of America, the largest US bank, will pass the government's pending "stress test,"and would not need more government capital.
General Motors shares jumped 25 percent today, adding to its 17-percent gain Thursday, after the battered automaker said it would not need government cash injections for now.
Wal-Mart shares eked out a gain of 0.5 percent after Goldman Sachs removed the company from its "conviction buy" list.
In other news, Warren Buffett's Berkshire Hathaway was stripped of its 'AAA' credit rating by Fitch, barely hours after S&P cut General Electric's top-tier rating, as the global financial crisis pummels America's corporate titans.
The legendary investor said the odds favor a US acquisition by Berkshire rather than a foreign one, because there are more opportunities opening up in the US and fewer competing buyers bidding up prices.
However, he did not completely rule out foreign acquisitions.
Investors actually reacted positively to the GE cut as some feared the reduction could have been worse.
GE shares ticked higher, adding to their 13-percent gain from Thursday, leaving the stock at $9.62.
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