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Dow Just Shy of Sept '08 Levels

The stock market continued its rally yesterday as the Dow rose for the 10th time over the past 11 trading sessions. The index is now just over 100 points shy of 11,000, a level it hasn’t closed above since late September 2008.

Yesterday’s final hour boost gave the Dow its best gain in about 2.5 weeks. Since the last triple-digit gain on March 5, little volatility has been evident in the marketplace – reflected by the Dow’s very narrow trading range. In fact, in those eleven sessions prior to yesterday’s trading, the Dow never closed up or down by more than 48 points.

Clearly, the markets have been unusually steady and very consistent over the course of March. So far, the Dow has only fallen on 3 trading sessions this month. The Dow has never finished any month with fewer than 3 down days. In fact, the last time the Dow was down for just 3 days in any given month was way back in April 2007.

The consistency of the Dow this month during its "melt up" has been quite reminiscent of the Summer Rally last year (July 11-August 4). During that period, the Dow was also up 14 of 17 days, but surged 14% in those three weeks. However, the two rallies do share some common leadership groups:

Summer 2009 Rally March 2010 Rally
Dow Up 14.4% Dow Up 5.5%
Dow Up 14 of 17 Sessions Dow Up 14 of 17 Sessions

Sector Leaders: Sector Leaders:
1) Biotechs up 39% 1) Biotechs up 20%
2) Materials up 24% 2) Industrials up 9%
3) Financials up 23% 3) Materials up 9%
4) Industrials up 19% 4) Financials up 8%
5) Consumer Discretionary up 17% 5) Consumer Discretionary up 8%

With just over a week left in the month, the markets are turning in some solid gains so far. Sitting at 52-week highs, the Dow is up well over 5%, lagging the S&P and Nasdaq, which are up over 6% and nearly 8%, respectively. These gains give the Dow its best monthly gain since November and the S&P and Nasdaq their best gains since July – during the heart of the Summer Rally.

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