Recession's Worse? Let's Buy Some Stocks
SAN FRANCISCO -- As compelling as the battle over recovering AIG (AIG) executive bonuses might be, it clearly has nothing to do with investors' increasing willingness to pay higher prices for stocks.
While Wednesday's session may have received a little help from the Federal Reserve, the market's most bullish run of 2009 -- the S&P 500 is now up 20% since its March 6 intraday lows -- looks as intact as ever.
For the rest of the month, the watch is on to see how a relatively light corporate news flow and the end-of-quarter performance push will affect the momentum of stocks, which this day touched some nice, round numbers -- 800 on the S&P and Dow 7500.
And let's not forget 1500 for the Nasdaq. With a Wednesday close of 1488, the index is now down just 5.6% in 2009, giving tech investors hope that another push higher could actually have the Nasdaq above water in a matter of days.The tech index was helped by IBM's (IBM) purported plans to buy Sun Microsystems (JAVA), boosting the prey's market cap by nearly $3 billion. But tech's outperformance of the broader market has been the standard this year, and the IBM-Sun news merely highlights the effect of the strength in tech stocks, rather than being the cause. The major giants in the sector, IBM, Cisco (CSCO), Apple (AAPL), Microsoft (MSFT) and Google (GOOG), to name just a few, are awash in cash. This isn't a bad affliction for weathering a recession, and it certainly comes in handy when it's time to buy struggling companies that can open up new markets.
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