Stocks close strongly, three major indexes return to positive for 2010
Image by wallyg via Flickr
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.
(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.
Follow me on Twitter at @theticker.
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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