The Market Finally Rallies

After dropping for 11 of the past 12 sessions, the stock market finally put on a nice rally today. The Dow gained nearly 150 points to close at 6,875. In fact, if it weren’t for some selling during the last 30 minutes, the Dow could have made a run back over 7,000 (see chart below). That final half hour is very important in gauging the market’s confidence.

The best gains today came from the area I’ve been talking about the most–commodity stocks, most particularly oil stocks. Occidental Petroleum (OXY), for example, rose 8.3% today. Fluor (FLR) was up 7.8% and Encore Acquisition (EAC) rallied nearly 10%. These are all excellent stocks.

Shipping stocks were also very strong today. Nordic American Tanker (NAT) gained over 13% and Diana Shipping (DSX) added 14%. The Baltic Dry Index, which measures shipping rates, rose 50 points to close at 2,084. I should add that gold fell for the eighth straight session.

Treasuries also took a hit today which is another theme I’ve been discussing. The 10-year Treasury note is now above 3% which is still very low. I expect to see these yields rise over the next several weeks.

Perhaps the most stunning news today was the plunge in shares of General Electric (GE). The joke around my office is that when CNBC anchor Mark Haines is in a good mode, the market rallies. However, if Haines owns a lot of General Electric, the parent of CNBC, then he probably wasn’t pleased.

At one point, GE was trading for $5.73 a share which is an 18-year low. The company has been trying to reassure investors that its finances are sound, but the market doesn’t seem convinced. GE’s stock recovered from some of the initial damaged, but it’s still down close to 60% for the year. I continue to rate General Electric a Strong Sell.

Let’s hope today’s rally will have some legs.

More Louis Navellier

Twitter

Facebook

RSS Feed

Little Book

InvestorPlace Network

InvestorPlace.com

https://orders.investorplace.com/chain?cid=MKT427092&eid=MKT473286&encryptedSnaid=&snaid=&step=start