Market wrap: US markets thundered higher overnight as Wall Street cheered government plans to purge the banking system of toxic assets. The prospect of a cure for the cancer at the heart of the global financial crisis sent the major US indexes up to 7% higher. The Dow gained almost 500 points. In a promising sign for the bulls, buying accelerated into the close.
The rally was led by financial stocks, with banking indexes rocketing up to 20%. REITs also made huge gains, up 17% and oilers soared as the price of crude rose almost 3.5% to $53.50 on expectations of improved economic activity.
However, gold fell off a cliff in the last hour, dropping $15 to recently trade near $937 as investors switched to riskier assets. Copper broke to a new high for the year. Other base metals were mixed but little changed.
Our market pre-empted Wall Street with a big move yesterday but the SPI says we should see another day of strong gains, closing up 88 points at 3641.
There were plenty of local stocks showing signs of getting set for another up-leg yesterday after recent pull-backs. I added two in GPT and SDG. The US REIT action should help the local sector roar today.
