Yesterday afternoon I wrote a quick piece for Time.com about the great day the stock market had. Here it is. The gist:
The stock price of the beleaguered financial giant Citigroup jumped 38% today, to a whopping $1.45 per share. Shares are now down only 93% from a year ago.
That sort of context might prove useful for thinking about the day’s broader market moves. To be sure, it was a happy one on Wall Street. The Dow Jones industrial average was up 5.8%…
But a bear market doesn’t end in a day, and anyone who looks at stocks as things to be owned for more than 24 hours probably shouldn’t put too much faith in the notion, as pleasant as it might be, that the bottom has been reached.
Consider for a moment why certain stocks rallied. The news that gave Citi — and a bunch of other finance firms — such a boost was that the New York City–based company would be profitable for the months of January and February. Fantastic, but those results exclude asset write-downs (i.e., one of the big reasons the stock takes a beating most other days of the week). Another big gainer: United Technologies. What did the aerospace-equipment and industrial-products maker do to earn an 8.6% boost to its stock price? It said it would lay off 11,600 people.
There I was yesterday, all negative-nellie about what our take-away should be from a good day on Wall Street among so many bleak ones—and yet now I see the Dow is up again this morning. Up double digits dozens of points. So maybe I’m the dumb one. This could be a two-day rally, after all.
For more enlightened commentary about the deeper meaning of daily stock-market moves, I’d recommend this clip from a popular nightly news program.
Barbara!