Stock rally stalls as investors wait for a another catalyst
NEW YORK (AP) – The stock market has run out of reasons to rally, at least for now.
After a two-month surge that saw the Dow Jones industrials average soar 31 percent and the Standard & Poor’s 500 index shoot up 37 percent, investors gave up some of those gains last week. As the new week begins, there doesn’t seem to be any catalysts that could restart the rally.
The market barreled higher as investors realized that worst-case scenarios in the banking industry weren’t going to happen. Indications that the recession was slowing also gave investors reason to buy at a pace not seen in decades.
Now though, with dire forecasts no longer priced into stocks, investors will have to hunt for signs that any economic recovery is beginning to take hold and that earnings are returning to more normal levels. Those signs are likely to come in the form of retail sales and consumer confidence reports as well as quarterly earnings announcements, but few are expected this week.
“My sense is we’ll be sideways going into (this) week,” said Timothy Speiss, chairman of the Personal Wealth Advisors division at New York-based Eisner LLP. “It’s like watching grass grow right now.”
Dan Genter, chief executive and chief investment officer of Los Angeles-based RNC Genter Capital Management said the rally helped stocks get back to trading at a fair value, or a price that’s based more on the fundamentals of a company’s performance than fears of an economic collapse.