Stocks began the day with a decline. They then moved higher and after the Fed's decision to leave rates unchanged, stocks sold off initially. They then rallied and moved higher into the close. Yesterday, Lehman Brothers (LEH) dominated the headlines. Today, it was AIG (AIG), Goldman Sachs (GS) and Morgan Stanley (MS). Washington Mutual can also be tossed into the mix (WAMU).
Yesterday and today, I added some small cap indexes including the iShares S&P Small-cap 600 (IJR), and the iShares Russell 2000. I also added some Stryker (SYK), St. Jude Medical (STJ), Netscout (NTCT), Monolithic Power Systems (MPWP), and Healthextras (HLEX).
Banks had a great day. Wells Fargo (WFC)* was +12%, Bank of America (BAC) *+11%, BB&T (BBT)* +11%, Umpqua Holdings (UMPQ)* +8%. REITS were also strong. Healthcare Properties (HCP)* gained +6.8%, Ventas (VTR)* +4.5%, and a host of others were up three to four percent.
The trading action of the Banks and REITS was very volatile which is not unusual when panic sets in. What will probably need to happen is for a retest of the recent market lows to take place. This should scare the last holdouts. After a day like today, I wouldn't be at all surprised to see a pullback.
Have a nice afternoon!
Arthur Daret
* Disclosure: Myself or clients own shares of these investments.