Market News: After the BellThe close: No April Fool's joke
RTGAMThe biggest movers on Tuesday say a lot about just what sort of stock market rally the U.S. enjoyed: It was a rush for the beaten up and unloved, as investors piled onto a rally out of a fear of being left behind.Citigroup Inc. rose 11.3 per cent. JPMorgan Chase [amp]amp; Co., rose 9.3 per cent. Lehman Brothers Inc., the subject of debate over whether it would survive just a month ago, rose 17.8 per cent.
And Fannie Mae rose 19.7 per cent.But the rush was far more widespread than it might first appear, sending all 30 stocks on the blue-chip Dow Jones industrial average into positive territory. The index closed at 12,654.36, up 391.47 points or 3.2 per cent. The worst stock - the worst - was Coca-Cola Co., and even it rose 0.9 per cent.In this new, upside down world, Treasury bonds tanked. The yield on the 10-year U.S. Treasury bond[amp]nbsp;approached 3.6 per cent from 3.4 per cent previously.[amp]nbsp;The broader S[amp]amp;P 500 closed at 1370.17, up 47.47 points or 3.6 per cent - with 97 per cent of the stocks rising.
The gains narrowed its losses for 2008 to just 6.7 per cent and certainly raises the question of what's driving the equity rally. Is it beginning-of-the-quarter rotations among institutional investors? Are investors betting that the massive writedowns announced earlier by UBS and Deutsche Bank will be the last? Or is this rally the result of relief over lower commodity prices?
There are many theories.In Canada, the S[amp]amp;P/TSX composite index managed to post a respectable gain of 88.15 points, or 0.7 per cent. It closed at 13,438.28, even though it was weighed down by a big retreat among high-profile commodities.
Gold fell to $887.80 (U.S.) an ounce in New York, down $33.70. Crude oil fell to $100.98 a barrel, down 60 cents.As a result of this commodity pullback, the energy sub-index fell 0.9 per cent and materials fell 1.8 per cent. Financials, however, rallied 2.6 per cent.[amp]nbsp;Copyright 2001 The Globe and Mail