The markets finally rebounded, bouncing nicely today. The mood was brighter today as investors took a breather from their worries about the credit crunch. The Dow gained 215 points. The Nasdaq gained 40 points. The broader S&P 500 gained 21 points, or 1.49%. 
The much maligned financials led the way higher today. JP Morgan Chase and Company (NYSE:JPM), which has actually held up well compared to the banking group as a whole, charged higher by 4.67%. Insurers were also strong today. MetLife Inc. (NYSE:MET) gained 3.46% on nearly double its normal daily volume. Principal Financial Group (NYSE:PFG) shares gained 3.92%, and after the bell the company announced a $500 million share buyback plan. Freddie Mac (NYSE:FRE) shares gained 5.02% on the day, but after the bell it is down by almost 2% after announcing it would cut its dividend by 50%.
One group that was surprisingly strong today in a huge up market was the beverage and brewer companies. Though I haven't mentioned them very much here, these stocks have done very well of late. The Coca Cola Company (NYSE:KO) gained 2.02% and closed within pennies of its 52 week high. Molson Coors (NYSE:TAP) charged higher by 3.99% on the day. Anheuser-Busch (NYSE:BUD) shares gained 2.22% and have done well in the past week.
Select technology stocks were very strong today. Garmin Limited (Nasdaq:GRMN), jumped 6.5% today, continuing its recent rebound. The ever-volatile Baidu.com inc. (Nasdaq:BIDU) bounced 4.66% higher today. Sandisk (Nasdaq:SNDK) shares gained 5.67%, though it was on lighter than average volume.
What should you make of today's rally? Why did I ask in the title of this post if the rally was real? In a sense its obviously real, because the market did gain nicely today, and it wasn't made up. My point though is that a bounce isn't real if it is just the so-called dead cat bounce or quick breather from selling. I caution readers not to make too much of one day's large gains in this market. Those of you who have been following the markets for a while will remember that some of the largest single day gains in recent years came in the bear market times in 2001 and 2002. Personally, I'll take 5 consecutive days of the Dow gaining 80 points each day over one day of a 400 point rally anytime.
The volume on the exchanges was fairly heavy today with the Nasdaq doing about 2.2 billion and the NYSE about 1.6 billion shares. The late surge of buying was encouraging, because it is always nice to see stocks finish near the days best levels.
Be careful in this market and don't make any huge moves in one way or another right now.
Comment Preview