Dow rally a 4-day streak, best week since November

And the week ends on a 4th day rally on a level, making this week the best for both the Dow and S&P since November.  The Dow closes 3/4 of a percent higher today and 9% up this week while the S&P was on a similar footing for today although almost 2 percent higher at 11.5 for the week.  It might be safe to say that it was the financial that lead us higher, with the XLF up almost 34% for the week (double financials UYG up 67% AND FAS, triple financials, an impressive 104%).  What caused this? Bank CEO’s coming out this week talking about profitability in the first 2 months of their firms.  That includes Citi’s Vikram Pandit as well as Ken Lewis, Bank of America’s CEO.  We now stand 223 points above 7,000 for the Dow and 15 points above the 741 support-turned-resistance level for the S&P.

XLF and UYG are both marginally higher for today, up less than a percent. While Citigroup (NYSE: C) is up more than 6%, fellow struggling firms Wells Fargo (WFC) and Bank of America (BAC) are both on the red.  Broker-turned-bankholding companies Goldman Sachs and Morgan Stanley went up north 1.60% and 5.17% respectively.  Jamie Dimon’s firm JP Morgan closes 2.37% higher.  Then there’s General Electric, which saw its rating lowered by a notch to AA+, jumping 36% higher in the week after it slumped to as low as $6.66.

Some of the major movers include defensive stocks Hershey Co. (HSY) up 3.10% and consumer products firm Procter & Gamble higher by 2.5 %.  But the biggest movers are led by Time Warner Cable, a whopping 207% move from its opening of 8.33 to close at 25.57.  Eatman Kodak (EK) posts a 29% increase to $3.57 while casino operator Las Vegas Sands gained 0.46 cents (26%) to 2.23.

In the tech sector, the smallest Mp3 player maker Apple dropped almost half a percent to $95.93 while Google is up 3/10 of a percent to close at $324.42. Semiconductors Intel (INTC) and Texas Instruments (TXN) are both up 1.25% and 1.70%, respectively.  Applied Materials (AMAT) is up 4.44% at 10.59.

We cannot miss talking about the pharmaceuticals/biotech pair-ups. Seeing 3 of them this week surely makes the week look much better and brighter.  Schering-Plough acquired by Merck this week shot up 23% while the acquiring firm saw a positive response with a 33% move to the upside. There’s also CV Therapuetics acquired by Gilead Sciences leaping 30% in the week while Gilead has gone up 10% since the deal was announced yesterday.  On the other side, Genentech saw a less enthusiastic response from the markets with only a 3.6% increase for the week. Its chart had the effects of the deal magnified.  Having said that, the company saw its status downgraded by 3 firms today, and a total of 5 since Monday citing limited potential to the upside as the reason.  Barclays set a price target of $95.

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A statement released yesterday by General Motors claimed will not be needing the $2 billion loan it thought it needed to stay afloat this month and which was mentioned in its 117-page restructuring plan submitted to Congress may be viewed as a major catalyst for the stock’s almost 25% increase, leaving behind its other competitors whose movements were more in line with the movement of the market. Cost-cutting deals were ratified by the Canadian Auto Workers.  The firm said the agreement would “quickly reduce costs in Canada by significantly closing the competitive gap with U.S. transplant automakers on active employee labor costs and substantially reducing” the cost of benefits for retirees, the New York Times reported.  From the statement released,

“This development reflects the acceleration of G.M.’s company-wide cost reduction efforts as well as proactive deferrals of spending previously anticipated in January and February.”

Today, the Confidence Index from University of Michigan was released and it is on the 56.6 level, higher from the last reading although still on a historic lows.

Are we finally rising from the ashes? Or are we simply stretching before we head back to deep slumber yet again?

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