Stocks recouped a bit of their recent losses Monday as the market cheered a manufacturing report.
The NYSE composite led with a 1.8% gain, as metals, energy and other industrial stocks rallied on the better-than-expected factory activity. The S&P 500 surged 1.4%, the Dow 1.2% and the Nasdaq 1.1%.
It was the market's best showing since it started correcting about two weeks ago.
But across the board, volume was about 30% lighter than Friday's total. Given Monday's sharp gains, it was a disheartening amount of trading.
The message was that institutional buying remains lackluster. That has been the predominant pattern in the major indexes the past couple of weeks.
Wall Street opened higher, despite a mixed picture on consumer spending and incomes before the opening bell.
Later, the Institute for Supply Management's January manufacturing index topped forecasts. It was the highest reading since August 2004.
Indexes initially gave up some gains on the news, but bounced back and closed at session highs.
With the market still not showing convincing signs of a bottom, it's smart to remain on the defensive. Remember to sell any stock that falls 7% or 8% from your purchase price. Remember to take profits when prudent.
Most leaders that broke out of bases the past couple of weeks have stalled or come under strong selling.
Tuesday, February 2, 2010
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