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Stocks close strongly, three major indexes return to positive for 2010

NYC - Bowling Green: Charging Bull

Image by wallyg via Flickr

UPDATED at 4:20 p.m.:

Nice, nice day on Wall Street. Nice day. Just what investors and traders needed.

Stocks opened strongly, maintained most of their momentum and even staged a little third-stage boost in the last 30 minutes, closing near their highs on the day.

The Dow closed up 3.9 percent at 10,785.14.

The broader S&P 500 closed up 4.4 percent at 1,159.73. The tech-heavy Nasdaq closed up 4.8 percent at 2,374.67.

It was the best single day for stocks since the March 2009 rally began. All 30 Dow industrial stocks finished higher on the day. Some 97 percent of S&P 500 stocks were up today.

In other good news today, the volatility index(VIX), or the fear index, a measure of activity around options, dropped 25 percent. Practically, this means traders didn't feel the need to protect their positions as much as they did last week.

And just to leave you with one final piece of good news: The two crash days of last week -- Thursday and Friday -- wiped out all of 2010's gains. Thanks to todays' big rally, all three major indexes are now positive again for 2010. Not a lot, but it's still better than it was on Friday.

Stocks give back some of day's games but remain strong

2:28 p.m.: Stocks are giving back some of their gains on the day but are trading at such a high range that last Thursday and Friday seemed unthinkable.

With 90 minutes to go in the trading day, the Dow is up 3.5 percent.

The broader S&P 500 is up 3.8 percent. The tech-heavy Nasdaq is up 4 percent.

Put in perspective, the Dow is back to where it was just before Thursday's "flash crash," as it's now being called.

Stocks settle into cruising altitude

11:39 a.m.: Stocks today are like a jetliner that rapidly rose to its cruising altitude and is now comfortably remaining there, settled in nicely.

Which is pretty exceptional: That such a massive rally could be so, well, quietly underway.

Two hours into the trading day, the Dow is up 3.8 percent, slightly off its day's high.

The broader S&P 500 is up 4.2 percent and the tech-heavy Nasdaq is up 4.2 percent.

The European markets just closed and they enjoyed a terrific day. London's FTSE and Germany's DAX both closed over 4 percent and France's CAC 40 closed up well over 8 percent.

French banks have the biggest exposure to Greek debt of all European banks.

Stocks of European banks surged today, as well.

Stocks surge at opening

10:30 a.m.: Stocks are staging a runaway rally in the opening minutes of trading, as Wall Street responds to the European bailout plan with heady euphoria.

If you've been wondering, "What does the Greece/European debt problem mean to me?" well, now you know.

In the first 45 minutes of trading, the Dow is up 4 percent. Wal-Mart is the only one of the 30 Dow components not in the green. The Dow is making a bid to get back above 11,000.

The broader S&P is up 4.4 percent, and the tech-heavy Nasdaq is up 4.4 percent, as well.

There are a couple of ways to look at this:

(A) This is a wildly unpredictable market, prone to massive swings from one day to the next. There's no way of telling what will happen to your money, so you should probably convert all your stocks into gold and bury it in the back yard.

Or:

(B) This is the recovery rally that takes back all of the real losses from that terrible 900-point crash last week. Look at it this way: About 500 points of the 900 point-loss came from the computer-aided mistakes. Had there not been that glitch -- and I really don't like using the word "glitch" because that was your money going "poof" -- the Dow would have dropped 400 points, not 900. So today's recovery rally is getting the Dow back to where it should be. Now, you can rightly say that any 400-point swing in the Dow makes it wildly unpredictable (Point A, above).

How can we know how wild and unpredictable this market is? One way is to look at the so-called "fear index," or volatility index (VIX). The VIX is an index of options, or protections, that traders are buying on their positions. If the VIX goes really high -- as it did last week -- it means that traders are worried about lots of unpredictability ahead, so they buy options. Today, the VIX is back down where it's been for most of the year.

As you would expect, today's big rally began in Europe, where that big sighing sound you may have heard early this morning was European traders sounding very, very relieved at the bailout deal.

With about an hour to go on the European trading day, London's FTSE is up 4.4 percent.

German's DAX is 5 percent and France's CAC 40 is up an eye-popping 8.3 percent.

Stocks are slightly down from their early-trading peak, but they remain strong. And investors could use it: The big crash last Thursday and Friday erased -- in just two days -- all of the stock market's gains for 2010. Ouch.

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By Frank Ahrens  |  May 10, 2010; 4:20 PM ET
Categories:  The Ticker , Wall Street  | Tags: Business, CAC 40, DAX, DIJA, FTSE, Gold, Investing, NASDAQ, Trade, VIX, Volatility, dow, s&p 500, stock market Wal-Mart  
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Comments

...because investors will make trillions in interest on these loans, i guess.

Posted by: 11kap | May 10, 2010 10:40 AM | Report abuse


Contrast and compare today's "instant rally" opening to last Monday's levels.

The latter half of last week was uncertainty due to the combination of the UK elections and how that might affect the second thing, the decisions on European sovereign debt handling.

All we've done so far this morning is to gain back about half of the losses last week.

Thus, this plus-or-minus 400 points rally is in fact the biggest ever Dead Cat Bounce.

Posted by: thardman | May 10, 2010 11:11 AM | Report abuse

The recovery always lasts longer than the crisis and we're all in for a long recovery. Prosperity makes friends and adversity tries them. Make the best of it. UP or University Post as I call it, I see it.

Posted by: tossnokia | May 10, 2010 11:24 AM | Report abuse

As I said before:
European union, of which Greece is a very small part of, will continue to get richer and richer compared to American Union (aka USA) as evident by how MUCH MORE valuable Euro is compared to US Dollar.

WHY?
Because Europeans are not suffering from a party of Lunatics as US is with the Republican party and Europe is not suffering from a right-wing (aka Lying) war-mongering media as US is with such lying machines as Fixed news, Talkradio, Wall Street Journal, CNBC, etc. etc., as a result of which:
1- European Governments invest much more of their People's money (Taxes) in their people and cities via such things as Universal nationalized health care, Universal education to Ubiquitous (electric powered) public transportation etc.
2- European Governments do not waste their people's money on Unnecessary Wars (Iraq War, Vietnam War, etc.) or on a Gargantuan Military

So Euro is KING and will continue to be KING, will continue to be MUCH MORE valuable to the US Dollar, as long as the above problems (FACTS) with US exist. More on these points here:
http://anoox.com/blog/Real_News.34892

You can bank on the above statement as being FACT.

Posted by: RealNews1 | May 10, 2010 12:06 PM | Report abuse

uh-oh - Hannity won't like stocks surging!

Posted by: angie12106 | May 10, 2010 12:19 PM | Report abuse

I'm going with option (A), Frank, right after the adults in charge decided to print $1 TRILLION Euros in order to protect it. Classic Keynesian "something-for-nothing" free lunch policy.

And after it fails this time, the adults in charge will come to the conclusion that they didn't print enough Euros.

Posted by: millionea81 | May 10, 2010 12:24 PM | Report abuse

So now US Taxpayers are helping to bail out Greece with Billions of our tax dollars!!!!!! When will all this insanity end?

Posted by: Jimbo77 | May 10, 2010 12:39 PM | Report abuse

You people that are saying we are in for a long recovery are truly delusional at best,that's all you liberals are about is spin.Who do you think pays for most of this bailout ? Ill tell ya,the American tax payers that's who,and if the ticking time bomb of derivatives blows,we all should come knocking on all you false prophets doors ? Americas only hope is to vote these big spending anti America Woodrow Wilson progressives out in November.Either that then it's time for the succession of states.These politicians have destroyed our country and this socialist administration along with the democrats are dragging(bailouts and healthcare debacle) the American people where they don't want to go.Washington is a den of thieves and completely corrupt.Are only hope is for states to stop their 'world' agenda.

Posted by: votingrevolution | May 10, 2010 12:55 PM | Report abuse

Or lots of people are trying cash in on the uncertainty of our world economy to make money since they have no other way to do it and they are as desparate as our economy coming up against the wall imposed by our planet of eventually having to live within its means sustainably, without hysterical bubbles of speculative growth and all the reat of our ponziconomy based on perpetual population growth. Plus trying to learn how not to poison the very planet we live on or shoot it out from under our feet with massive weapons.

Posted by: Wildthing1 | May 10, 2010 1:12 PM | Report abuse

I just don't get this. Let's say your teenage son maxed out his credit card, claiming he was buying a new car so he could get a job across town. Then you found out he'd been spending all his money on flashy clothes, booze and expensive cigars. The solution to this problem is to ground your son and make him get a job at the garden center until he pays the card off. Getting a cash loan on *your* credit card to pay *his* balance off -- while he continues to spend -- is a recipe for eventual financial collapse. Isn't it?

Posted by: stupid4 | May 10, 2010 1:34 PM | Report abuse

So the problem in Europe, just like the US, is too much debt. So of course the solution is, MORE DEBT. And the stock market soars on the news. Folks, insanity rules in today's world.

Posted by: bretb | May 10, 2010 1:39 PM | Report abuse

I guess the investors haven't figured out that pouring billions and trillions into the global debt only adds up to more debt.

At some point down the road somebody will have to pay the piper.

Posted by: lcarter0311 | May 10, 2010 1:40 PM | Report abuse

time to re-fi.....i like the 5% interest

Posted by: TheBabeNemo | May 10, 2010 2:10 PM | Report abuse

Did we forget so fast that the stock market dropped 1000 points on Thursday? Enough already. Let these nations go bankrupt. Let the bondholders lose their investment. Sure it will hurt but it is much better than what is going to occur. We are sprinting towards the French Revolution x 1000. Being broke is one thing - being peed on is what really pisses people off.

Posted by: mtbunker | May 10, 2010 2:17 PM | Report abuse

Huge gains are not so huge when recovering from significant and precipitous net loss of the stocks on the trading market. Remember Obama said that jobs were “the truest measure” of economic recovery.

The American voters should profile users of the stock market to determine who has the money to buy and sell stocks. Are they average Americans? Stock market gains or loses don’t make much difference to most of the average working U.S. taxpayers.

The Stock Market is important for the U.S. economy as related to government revenues and the productivity of American businesses. Money lending, interest rates and banking investments are like on big money game.

We need some understanding of the foundation of America’s economic success that depends on small business enterprises making a profit and hiring more employees. Obama’s big government has squashed them by federal regulations, taxes, unfair foreign trade and labor unions. Vote Republicans for less government and buy American.

Posted by: klausdmk | May 10, 2010 2:39 PM | Report abuse

Huge gains are not so huge when recovering from significant and precipitous net loss of the stocks on the trading market. Remember Obama said that jobs were “the truest measure” of economic recovery.

The American voters should profile users of the stock market to determine who has the money to buy and sell stocks. Are they average Americans? Stock market gains or loses don’t make much difference to most of the average working U.S. taxpayers.

The Stock Market is important for the U.S. economy as related to government revenues and the productivity of American businesses. Money lending, interest rates and banking investments are like on big money game.

We need some understanding of the foundation of America’s economic success that depends on small business enterprises making a profit and hiring more employees. Obama’s big government has squashed them by federal regulations, taxes, unfair foreign trade and labor unions. Vote Republicans for less government and buy American.

Posted by: klausdmk | May 10, 2010 2:40 PM | Report abuse

LOL - these Wall Streeter's don't get it. "Hey, let's just leave all the laws like they were! No, we didn't police ourselves, but don't change anything..."

Global financial reforms are long overdue. And the mega-banks had to be stabilized, they are too interconnected in the financial system we are all dependent on. Now they should be broken up into smaller pieces so this cannot happen again.

Balkingpoints / www

Posted by: RField7 | May 10, 2010 2:52 PM | Report abuse

Of course they 'manipulated' things back up today - tomorrow they go before Congress (sic) to explain what happened last Thursday! A money grab planned by insiders to liquidate the 'conservative' player's stop loss orders and then buy them back at a big discount. 1 trillion transferred from the middle class to the super rich (again).

Posted by: amillionto1 | May 10, 2010 3:43 PM | Report abuse

Where are the European tea baggers? Surely they will stick to their principles despite a rising stock market.

Posted by: double07 | May 10, 2010 4:46 PM | Report abuse

The real news story today is not Greece but fannie and freddie losing 12 billion and asking for 8 billion more from the taxpayer. The European banks are going to be bailed out by printing more American money and driving the deficit further into the red. Congratulations Mr. President, it is a good thing you do not have any kids who will pay for all of this. Oh! wait, you do have kids.

Posted by: gvelanis | May 10, 2010 5:02 PM | Report abuse

Stimulus didn't work.

Unemployment up and worsening.

Now they tell me the DOW is shot to hell.

What is this obama idiot doing for us?

Posted by: docwhocuts | May 10, 2010 5:31 PM | Report abuse

Looks better at five hundred and it could get faster soon. The weeks keep getting longer. Speed it up.

Posted by: tossnokia | May 10, 2010 5:37 PM | Report abuse


Cool. After it only stole $6,000 of my retirement money in one week. I expect it to drop on a whim so I moved my retirement money into the protected area--which means I will earn nothing.

Too bad Oboma and company have not placed any safeguards on Wall Street to protect the private sector from having all of their retirement money stolen by day traders and short buyers, etc.

Oboma and the other politicians don't care because they have the special government retirement plan that pays a garunteed high rate and is protected by the taxpayers. That is, government pensions can be vested in Wall Street but they get a minimum high rate of return and are protected from drops on Wall Street.

Posted by: maphound | May 10, 2010 5:46 PM | Report abuse


In a genuinely worrisome indication of how the "volatility index" or "VIX" is calculated, last week's 900 point drops left us with a record increase in the VIX (30%) at closing bell on Friday... and this morning the biggest-ever Dead Cat Bounce of 400 points somehow causes the greatest recorded drop in the VIX (30%).

It can't be just me who wants to know, "how exactly can a 900 point drop over two days be considered 'volatile', and a 400 point bounce-back isn't considered volatile?" -seriously, if we're seeing huge swings, probably the VIX needs to be calculated on a set of bounds outside of a moving average relative to the total value of the index.

Thus, down 900 points one day, up 400 points the next day, should be considered highly volatile because even though it's only around 1-percent of the DJIA total value, it's a half-percent one day and 3/4ths-percent the day before.

If the DJIA goes up and down 50 points 10 times in one day, that should be rates as lower volatility because it's not huge in percentage terms... though if it's all over a very small part of the map in a short time, that might be another sort of indicator of another kind of volatility.

I can't be the only person who remembers that this sort of oscillation was a major symptom of the Fall 2008 meltdown, right before the Big Drop.

Posted by: thardman | May 10, 2010 5:56 PM | Report abuse

AS THE TAXPAYERS GET BENT OVER AGAIN WITHOUT ANY WARNING FROM THE ADMINISTRATION JUST SCREW THEM DON'T WORRY THERE JUST TAXPAYERS SCREW THEM !!!!!!!!!

Posted by: yourmomscalling | May 10, 2010 6:08 PM | Report abuse

AS THE TAXPAYERS GET BENT OVER AGAIN WITHOUT ANY WARNING FROM THE ADMINISTRATION JUST SCREW THEM DON'T WORRY THERE JUST TAXPAYERS SCREW THEM !!!!!!!!!

HOWS IT FEEL TO BAIL OUT ANOTHER COUNTRY PEOPLE MORE DEBT JUST PILE IT ON ITS TIME TO TAKE BACK AMERICA AND BOOT THIS ADMINISTRATION !!!!

Posted by: yourmomscalling | May 10, 2010 6:11 PM | Report abuse

LOL, Who cares what Wall Street does! I mean seriously.

Lou
www.anonymous-posting.us.tc

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Posted by: itkonlyyou52 | May 10, 2010 11:25 PM | Report abuse

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