Market News: After the Bell
The close: What was that?
RTGAM
There is only one question on the minds of investors right now: Will it last?
Investors have seen these sorts of upward moves too many times recently to be convinced that Tuesday's stock market rally was anything but fleeting. Still, there's the hope.
The problem with answering the question is that the yes and no camps make so much sense. Yes, the rally could last because stocks are cheap based on historical comparisons. Then again, history also shows that stocks tend to get even cheaper when they get caught in these sorts of mind-blowing downturns.
Of course, this impressive rally barely registers as an uptick if you look at a stock market graph over the past year. Indeed, the rally merely takes the S&P 500 back to where it was at the end of February (seven whole trading days), and remains down more than 20 per cent for the year.
Still, it's not hard to appreciate the day for what it was. The Dow Jones industrial average closed at 6,926.49, up 379.44 points or 5.8 per cent. The broader S&P 500 closed at 719.60, up 43.07 points or 6.4 per cent. It was not only the biggest rally of 2009; it was the biggest since Nov. 24.
The other notable point about this rally is that there was no dip toward the end of the day. For the Dow and the S&P 500, both indexes finished the day at their highest levels.
Financials led the way, after Citigroup Inc.'s chief executive said in a memo to employees that the bank of profitable in the first two months of the year. The bank's shares surged 38.1 per cent and dragged others with it. Bank of America Corp. rose 27.7 per cent. As well, General Electric Co. - which has been hobbled by its financial arm - rose 19.7 per cent.
On the other hand, typically defensive stocks registered far less impressive gains. Procter & Gamble Co. rose 2.2 per cent, Coca-Cola Co. rose 1.1 per cent and McDonald's Corp. rose just 0.5 per cent.
In Canada, the S&P/TSX composite index closed at 7,880.41, up 313.47 points or 4.1 per cent - its biggest rally since Nov. 28.
There, the Big Banks were the leaders, following the rally among financials in the United States. Royal Bank of Canada rose 14.4 per cent and Toronto-Dominion Bank rose 11.1 per cent. As well, Manulife Financial Corp. - which has tended lately to over-describe moves in the broader market, on the way up and on the way down - surged 18.3 per cent.
Energy stocks were non-starters after an upward move in the price of crude oil fizzled in afternoon trading, ending the day at $45.71 (U.S.) a barrel, down $1.36. Suncor Energy Inc. rose 0.4 per cent and EnCana Corp. rose 1.2 per cent.
Meanwhile, no one wanted the safety of gold, or gold producers, when stocks turned suddenly hot. Goldcorp Inc. fell 7 per cent and Barrick Gold Corp. fell 8.1 per cent after the price of gold fell below $900 an ounce, down about $22.
Copyright 2001 The Globe and Mail