Good old days again?

Golden Sachs (GS) had a blowout earnings report this week and the Dow finally made it above 8,500 Wednesday in a nice 200-point-plus rally.

The Wall Street Journal on Thursday carried a story about how finance executives were again getting paid astronomical bonuses to deliver returns to their firms.

Could it be that happy days are here again? Possibly.

China is also showing signs that its slowdown is on the mend. That could be a good thing in terms of exports and commodities.

We'll have to see how things unfold in coming weeks.

Brian.

Rational or not, market is hanging in there

We've been around that 8,500 range in the Dow for some time now and have been getting some initial signs that the downturn might be stabilizing.

The National Association of Realtors announced this week that pending home sales were up again for the fourth consecutive month.

The Institute for Supply Management Index, which surveys purchasing managers at manufacturing firms, also showed resilience and slower contraction, according to MarketWatch. The index had the most favorable reading since last August.

We've been bouncing up and down in the 8,400-8,500 range since at least early May - another indicator that may point to some levelness and possible upward movement in the future.

But a few favorable numbers aren't enough to support full conviction, those in the bear camp say. In other words, proceed with caution.

Brian.

What a tangled Web

Regulations on the horizon that focus on how Internet retailers gather information from consumers have caused trade groups to try to beat rule-makers to the punch.

Don't be surprised to soon see an icon on certain Web pages notifying you that your activity is being tracked, according to a recent piece in the Wall Street Journal. When clicked, the icon would tell you what information the retailer gathers and which companies it shares the information with, according to the article.

Sites could also include a feature to allow Web surfers to decline having their information gathered. If I were designing the feature I would call it the "no-brainer" button.

Not suprisingly, one ad agency managing director told the Journal that limiting access to consumers' information would make it less likely that a marketer "can provide more timely, relevant and targeted ads to consumers."

I guess that's up to you, the consumer, whether that's a good or bad thing. I know what way I'll be clicking.

Brian.

Here's hoping these signs of life aren't elusive

Market watchers got a boost today with the release of durable goods data.

The data revealed that orders for durable goods - things like appliances, cars, and business equipment - rose 1.8 percent in the month of May. Stocks gained on the news after faltering the past few days.

But that doesn't mean happy days are here again.

Joe Keating, chief investment officer at RBC Bank, issued some bullet points about positives and negatives in the current environment. Here's a sampling:

• The pace of single-family housing starts rose 7.5% to an annual rate of 401,000 in May, following readings of 373,000 in April, 361,000 in March and 357,000 in February and January.
  The stability, and even a modest upward trend, in single-family housing starts since February point to the more than three-year slide in single-family home construction coming to an end. While we expect that a bottom in home building has been reached, a sustained rebound will likely not take hold until next spring due to the huge supply of existing homes still for sale, the record wave of mortgage foreclosures which is dumping more unsold homes on the market, the rise in mortgage rates since mid-March, which is cutting into affordability and the ongoing efforts by employers to cut jobs.
• Industrial production fell -1.1% m/m in May after dropping -0.7% in April as the recession continues to hold back demand for manufactured goods, including automobiles, machinery and household appliances. The ongoing decline in industrial production -13.5% over the past year - is a sober reminder that even if the now 18-month-old recession is leveling out, it has not ended, and a return to a self-sustaining and self-reinforcing economic recovery is unlikely for a number of months.
  

Keating also said that consumer prices hardly rose in May, meaning that inflation is being kept in check.

Brian.

Steady as she goes

Everything's looking pretty good in the market lately.

That 8,000 level in the Dow has held strong and it seems like some individual stocks are continuing their upward trajectory.

I'm still staying right where I am.

But that doesn't mean you should.

If you've got the guts (like the ones I lack) then there are probably some really decent values in stocks right now. And if you use dollar-cost averaging, your are probably already taking advantage of some of the lowest stock prices we've seen in a long time.

But I still have too much of a sense that we're not out of the woods yet. And that keeps me on the sidelines.

Happy investing.

Brian.

This rally has legs

Don't want to jinx it, but Wednesday saw another nice close and had the Dow holding steady at around the 8,500 level.

Part of the buoyancy was attribted to a better-than-expected jobs report from payroll administrator Automatic Data Processing.

The report showed that non-farm payrolls fell 491,000 in April, the smallest jobless decline in six months.

There are still many barriers to overcome and some have suggested we're seeing nothing more than a bear market rally, albeit a healthy one.

Buy-and-holders will shrug off any such analysis, but active traders may want to stay alert.

Brian

Nice close today. Is the rally for real?

The market's been trending up, up, up.

Somehow, despite all the lack of confidence about the bank stress tests and the swine flu, the Dow Jones closed up 214 points, to 8,427.

That's quite a bit above the low of 6,594 we saw in March - a nearly 28 percent gain in fact.

I admittedly snoozed while it passed me by.

But is this rally going to stick for awhile?

That's anybody's guess, but some have suggested that if you missed this spike, it may already be getting ready to fizzle.

I guess we'll just have to see.

Brian.