Bank news, economic data boosts stocks

[Mugu]

By JOE BEL BRUNO, AP Business Writer

NEW YORK - Wall Street began the second quarter with a big rally Tuesday as investors rushed back into stocks amid optimism that the worst of the credit crisis has passed and that the economy is faring better than expected. The Dow Jones industrials surged almost 300 points.

Financial stocks were among the big winners after Lehman Brothers Holdings Inc. and Switzerland's UBS AG issued new shares to help bolster their balance sheets. With that upbeat news and a fresh quarter ahead of them, investors appear quite willing to make some bets that the worst of the damage from the nation's credit struggles has been felt. Moreover, the moves buttressed the view that financial services companies are taking aggressive action to improve their capital bases and stave off the potential of a collapse similar to Bear Stearns Cos. Analysts believe there must be a recovery in bank and brokerage stocks to lead major stock indexes higher. Some of the biggest financial players had their biggest moves of the year Tuesday — Citigroup Inc. shot up 10 percent, JPMorgan Chase & Co. rose 7 percent, and Lehman surged 14 percent.

"Investors have a difficult time making decisions about the stock market if they don't have confidence in major financial institutions, so there's been a lot of sideline cash," said Richard Cripps, chief market strategist for Stifel Nicolaus. "The extreme conditions that we've seen here over the past few months has been missing that confidence ... but that appears to be changing, and we're seeing the response."


Complete article at:
http://news.yahoo.com/s/ap/20080401/ap_on_bi_st_ma_re/wall_street

[Speck Tater]

1. Another dead cat bounce.

Every bit of "good news" brings up enough false hope to boost prices for 2 or 3 days.

The fundamentals are unchanged. The economy is still tanking, but with increasing volatility. Any mathematician can tell you that volatility is one of the symptoms of chaotic behavior.

[BlooInBloo]

2. Maybe the taxpayer bailout of the brokerages had something to do with it.