Holy Dow, Green Monday, Moola Mania… Whatever you call it, this is a big relief for U.S. stock market. What a ride we had in the last 10 days!
Dow Jones climbed 936 point to offer much needed relief to the investors. U.S. stock market paper gains totaled $1.2 trillion Monday according to the Dow Jones Wilshire 5000 Composite Index. The massive rebound also pushed the Nasdaq composite index higher by 195 points, or nearly 12 percent, its second-biggest gain in percentage terms. The Standard and Poor’s 500, rose 104 points, its biggest point gain ever and an 11.5 percent gain, its greatest since 1933.
There are still many unknowns in the world economy. I guess the worst is over, at least for this year. We may not see the blood path again in Wall Street for many months to come. America is still in recession. Unemployment numbers may go up. Suddenly the world is not changed. Only the perspective of the investors is changed. That is the good thing anyway because last week’s fear was just nasty.
U.S. Stocks were falling last week because of a combination of panic and forced selling by hedge funds that must meet margin calls from their lenders. The reversal of stock market direction brings tremendous joy and relief.
“I think in years to come — I wouldn’t say months to come — we will perceive this as being a great value-buying opportunity,” said David P. Stowell, a finance professor at Northwestern and a former managing director at JPMorgan Chase. “Two and three years from now, it will seem very smart.”
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