@ Wall Street
No news on the economic front, today, Tuesday October 11th. Yesterday, stocks jumped 3 percent, extending gains into a second week as a pledge by German and French leaders boosted hopes that the euro-zone debt crisis may be resolved.
The gains lifted the S&P 500 above its 50-day moving average for the first time since late July, a bullish technical signal. The S&P 500 is now up about 11 percent since its low on Tuesday, when it briefly fell into bear-market territory.
Financials, the most beaten-down stocks during the recent slide, led the rally. The KBW bank index jumped 5.3 percent, with JPMorgan Chase & Co up 5.2 percent at $32.30 and Bank of America up 6.4 percent at $6.28.
The gains, however, came on the second-lightest day of trading since July and may not be indicative of a long-term trend. The advance has been driven by short-covering and managers buying stocks as they try to catch up to the sharp rally built on headlines out of Europe.
"There's basically a rally coming off deeply oversold levels," said Fred Dickson, chief market strategist at The Davidson Cos. in Lake Oswego, Oregon.
"What's happening is traders are shorting the dollar, and using funds there, and piling into risk-based assets," including equities, he said. The euro, with which the S&P 500 has had a strong correlation, rose the most in 15 months against the dollar.
German Chancellor Angela Merkel and French President Nicolas Sarkozy promised on Sunday to unveil a comprehensive new package to ease the euro zone's debt crisis.
Earnings season is set to begin with Alcoa's report tomorrow after the closing bell and will likely become a driver for stocks in coming weeks.
