What a start for the month. Stocks were up sharply from the opening and added to the gains throughout the earlier part of today's session. The advance finally paused around 1.00 EST after 1.00 pm EST but remained fairly range bound after.
All of the major averages closed solidly in the green. The Dow closed + 221.11 points (+ 2.60 %) and the S&P was up 23.73 points or + 2.58 %.
Well...there is a saying which goes "never fight the market"...and this seems certainly to be true right now. Boosted by gains in overseas (mainly Asian) stock markets the US equity market came in higher and just kept on going.
The bankruptcy of GM was widely expected and as such did not do anything to stop the advance.
Other economic front there was the release of the Index of Manufacturing Activity as released by the Institute of Supply Management. The index came in at 42.8 %; slightly better than the 42 % expected by analysts.
Interesting was the personal income number for April. Personal income increased by 0.5 %...a very good number. Unfortunately though the personal consumption number declined by 0.1 %.
I have to admit...today's advance is surprising to me. However, after last weeks showing it was somewhat expected though. The market has now, technically cleared important levels to the upside. We have posted new multi month highs for all of the major averages.
I was neutral stocks with a negative bias but now feel compelled to change my outlook. Stocks should trade higher with the Dow now reaching the 9100 tom 9200 level,perhaps even sometime this month.
Tomorrow we might see some consolidation but longer term the traffic light is clearly green and we should head higher.
Until tomorrow
Steve Benger
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