Market Preview: Here Come the Banks!
NEW YORK (TheStreet) -- As bad the news was during the recent five-day losing streak for stocks -- forget QE3 unless the economy stalls, weak jobs growth in March, Spain on the ropes -- that's how good everything seemed today.
You had mollifying Federal Reserve officials dropping hints at additional stimulus, a drop in imports that fueled higher hopes for better U.S. GDP growth, speculation that China is primed to report stronger than anticipated economic growth, even a solid rise in worldwide PC shipments that sparked a 7%-plus surge in Dow component Hewlett-Packard(HPQ) .
The bulls had so much firepower that the elevated read on initial jobless claims last week never stood a chance.
It all added up to a pretty serious swing higher. The Dow Jones Industrial Average had its best day since March 13, and the move since Wednesday represents the strongest two-day performance on both a point and percentage basis since Dec. 21, according to Dow Jones Indexes. Not bad. The S&P 500 jumped right back above its 50-day moving average of around 1370, and the Nasdaq is comfortably above 3000 once again.
The smiles will disappear, of course, if China doesn't hold up its end of this bargain, but for now, the bulls can breathe a sigh of relief because Thursday's action, with the major U.S. equity indices finishing just below their highs of the day, showed there was money on the sidelines eager to jump back in and folks were buying right through the all-important final hour.
Both stocks have outperformed the broad market this year, rising 30% and 22% respectively, so expectations are elevated. Guggenheim Securities, which upgraded Bank of America(BAC) on Wednesday, is expecting an average upside surprise of 6% from the 16 large-cap banks it covers, and Wells Fargo is one of its favorite names.