As the month draws to a close, April is on its way to seeing the best monthly gain since 1991 after a string of earnings beating analysts’ expectations including and most especially those of banks.
Wells Fargo and American Express Co. reported first-quarter earnings that exceeded the average analyst forecast by more than 70 percent, propelling financial stocks in the Standard & Poor’s 500 Index to a record monthly advance of 25 percent. Almost 70 percent of companies in the measure that have reported topped projections, the highest since the end of 2006.
S&P has risen almost 10 percent this month, the biggest since 1991 and it only needs to rise 2% more to be positive for 2009, after it already jumped 31% from the low on March 9. The Dow has seen a lower increase of 8.9% so far this month.
The S&P 500 has soared 11 percent this month for the fastest rise since December 1991. The benchmark index for U.S. stocks must rise only 2 percent to erase its 2009 loss after jumping 31 percent from a 12-year low on March 9. The Dow Jones Industrial Average has risen 8.9 percent in April and Russell 2000 gained 18 percent, surpassing S&P 500’s performance by the most since July 2002.
Textron Inc., Caterpillar Inc., and Coca-Cola Enterprises Inc. gained more than 29 percent this month. Yet
Another power player was Dendreon Corp. whose stock saw a fivefold surge to $21.10 a share and almost double in one day after the release of the test result of its drug Provenge that was proven to extend the lives of men with prostate cancer.
The Libor-OIS spread, a gauge of banks’ reluctance to lend, has declined to 0.82 percentage point, the lowest level since the collapse of Lehman Brothers Holdings Inc. in September.