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Tuesday, September 29, 2009
Stocks surged Monday, recharging their recent advance after a one-week break
Posted by shuseel at 12:17 AMStocks surged Monday, recharging their recent advance after a one-week break, as a pair of multi-billion dollar merger announcements gave investors a reason to get back into equities.
The Dow Jones industrial average (INDU) gained 124 points, or 1.3%. The S&P 500 (SPX) index rallied 19 points, or 1.8%. The Nasdaq composite (COMP) rose 40 points, or 1.9%.
Last week, the S&P 500 fell more than 2%, in its biggest one-week selloff in nearly 3 months. The declines occurred as investors mulled weaker-than-expected housing reports and an as-expected Federal Reserve decision to hold interest rates steady.
But over the last 7 months, investors have mostly used the dips as an opportunity to get back into stocks at lower levels, something that happened Monday, too.
"The two big mergers really hammer home the point that the credit market is improving," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.
He said merger news and the recent series of initial public offerings that have come to market go a long way to counter worries that the stock advance is out of pace with the still-sluggish economy.
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