Wall Street’s rally is broadest since March as shares surge
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Bad day to be a bear.
Stocks surged, in the broadest advance since late March, as market bulls were heartened by a flurry of encouraging reports from major U.S. companies.
American Express Co. helped to juice today’s rally after the charge-card giant said it may not suffer the level of credit write-offs it had previously forecast for the second half of the year.
Although Intel Corp.’s better-than-expected second-quarter sales announced late Tuesday drove an advance in technology shares today, financial issues were almost as strong. The financial-stock sub-index of the Standard & Poor’s 500 surged 4.1% while the tech-stock sub-index rose 4.2%.
From Bloomberg News:
Costs tied to uncollectible debt fell in June to 9.9% of managed U.S. card loans, compared with 10% for May, American Express said today in a federal filing. Loans at least 30 days overdue -- an indicator of future charge-offs -- fell to 4.4% from 4.7% in May. ‘Assuming delinquency and bankruptcy trends continue to be below previously expected levels, the company believes that it is highly likely’ that write-offs for the third and fourth quarters on U.S. cards ‘will be better than previously forecasted,’ the filing said. The report added to signs that record defaults by consumers on credit cards may be near a peak. JPMorgan Chase & Co. and Discover Financial Services also reported fewer soured loans today.
AmEx shares rocketed $2.76, or 11.3%, to $27.22.
This was a broad rally, by any measure. The number of rising stocks on the New York Stock Exchange came to 2,767, the most for any session since March 23. That will further stoke the bulls’ hopes.
The S&P 500 was up 26.84 points, or 3%, to 932.68 -- its highest close since the spring peak of 946.21 reached June 12. The recent pullback failed to reach the 10% threshold of a standard market ‘correction.’ At the S&P’s low on Friday it was off 7.1% from the June 12 high.
The fast rebound this week is an obvious sign that too many people came into the third quarter expecting stocks to head south, particularly after the dismal June employment report on July 2. The market is doing what it does best: disappoint the crowd.
Now, with the S&P 500 up 6.1% since Friday, ‘short sellers’ are getting squeezed and may be buying to cover some of their bearish bets.
All that the bulls wanted was a little encouragement from major companies’ second-quarter earnings reports, and they’ve been getting it -- from Intel, Goldman Sachs, Johnson & Johnson, railroad CSX and others.
Intel shot up $1.22, or 7.2%, to $18.05 today, its highest since Oct. 1.
Goldman Sachs rose $5.60, or 3.7%, to $155.26, the highest close since Sept. 11 -- just before Lehman Bros.’ collapse and the beginning of the fall market meltdown.
-- Tom Petruno