Stock Rally Gets Back on Track

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Following a week that saw the S&P 500 fall for the first time in eight weeks, the move higher in stocks returned on Monday to its norm — up, up, up — of the past four-and-a-half months.

 Closing at their highs of the day, the Dow Jones Industrial Average climbed 109 points to 11,981, the Nasdaq jumped 28 points, or 1%, to 2718, while the S&P 500 moved 7 points higher to 1291.

For investors who love big, round numbers, the Dow nearly delivered, coming within 17 points of 12,000 for the first time since the middle of 2008 – when, of course, stocks were beginning a rollover – then plunge – that took the Dow below 7000 at one point.

While it seems likely that the Dow will at least touch that level this week, what is more important for bulls is that the run higher in stocks since early September keeps on rolling.

Industrials and agricultural names were among the strongest of the day —  Dow components Alcoa (NYSE:AA), Caterpillar (NYSE:CAT), and United Technologies (NYSE:UTX) all had strong trading sessions.

Tech stocks rebounded on Monday after their underperformance of last week: Intel (NASDAQ:INTC), Cisco (NASDAQ:CSCO) and Microsoft (NASDAQ:MSFT) all had strong days, as did current semiconductor wunderkind Nvidia (NASDAQ:NVDA), which has to be close to some kind of record for one-month performance by a large-cap stock, soaring 60% in January alone.

And it was a day that, the Dow aside, saw small-caps outperforming the larger-cap names, in a reversal that marks either an aberration or a return to form.

Not doing so well, were old-school energy sectors like natural gas and oil – crude fell under $88 a barrel – or gold and silver miners, with the precious-metals trade largely taking a day off.

In all, today’s market offered much proof that in the absence of multiple negative hard data points that just can’t be ignored, the trend is up for now. Not even a tepid overseas market performance or an apparent terrorist bombing in Moscow were enough to derail investors who didn’t have much else in the way of economic data or earnings reports to weigh.

On the other hand, for bears this climb toward the most extreme bullishness – supported by investor sentiment surveys and recent stock fund inflow numbers – could be a sign that possibly-late-to-the-game retail investors are showing a near-term top in stocks.

However, that top doesn’t look imminent from Monday’s market performance.


Article printed from InvestorPlace Media, https://investorplace.com/2011/01/stock-rally-gets-back-on-track/.

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