If stocks in Japan, where a conclusion to a nuclear-plant crisis is anything but certain, can manage to jump 2.6% to a level not seen in two weeks, who are we to deny an end-of-quarter momentum rally here?
Stocks continued to push higher Wednesday, nearing even closer to their highs of the year, while almost obliterating that monthlong interlude that saw stocks drop more than 6%.
The Dow Jones Industrial Average rose tktkt, the Nasdaq tktktk and the S&P 500 tktktk.
Of course, it’s not as if stocks weren’t given a few nuggets of tangible positivity on which to hang a rally. Biotech stocks, for example, were lifted as a result of news late Tuesday that Cephalon (NASDAQ:CEPH) had received a $73-a-share cash buyout offer from Valeant Pharmaceuticals (NYSE:VRX).
So, yes, that makes sense — a large potential consolidation in the industry sparking good feelings for all. No surprise then to see the SPDR S&P Biotech (NYSE:XBI) exchange-traded fund climb 2.4%.
And, hey, oil prices were down — gotta be good news for sectors that were mostly crushed a couple of weeks ago when oil surged back up to $106 a barrel from $98. And there you see travel and tourism stocks, as well as airlines, enjoying a rare day in the investor sun. Expedia (NYSE:EXPE) and Priceline.com (NASDAQ:PCLN) were both up around 3%.
Airlines also were able to do some damage. United Continental (NYSE:UAL) and American Airlines parent AMR Corp. (NYSE:AMR) were both up more than 4%.
However, as bullish as one could be after seeing stocks shoot back up 5.5% in exactly two weeks, it does give pause that the Russell 2000 not only outperformed on Wednesday as the small-cap index usually has on broader market moves higher, but also reached its highest level since 2007.
A longer view supports the idea that market participants (those long stocks, anyway) are enjoying the culmination of a snapback rally that coincided nicely with (or sprouted from?) an end-of-the-quarter attempt by fund managers to make sure they racked up some profit in the quarter’s better performing stocks.
And if you’re going to ignore pesky downers such as the International Monetary Fund cutting its 2011 GDP estimate, why not do the same on Thursday, with one more day to give those 2011 market highs a run for the money?
On the dying-by-the-sword front, however, stands the March unemployment report on Friday, April 1, by golly, the first day of a new quarter. It would hardly be surprising to see disappointing data open up a whole new can of market volatility.
