Sam Collins

Market Remains in Bear Country

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Stocks rallied Wednesday as a result of four economic reports: the Automatic Data Processing (ADP) Employment Report, the Institute for Supply Management (ISM) Manufacturing Index, and the monthly construction report, which all came in just about where expected. So, with no downward surprises the market reacted favorably.

But what really brought in buyers was the pending home sales report. It was expected to be unchanged from a big decline in January and instead showed an increase in sales of 2.1%. After a slow start to the day, the mid-morning report turned the tide and following some profit-taking in mid-afternoon, the advance continued.

There also seemed to be buying in financial stocks related to a meeting this morning at the Financial Accounting Standards Board. It is anticipated that the board will relax the mark-to-market rules for credit securities. But the members of the board have made no commitment to make the change, and the outcome of the G-20 meeting is in doubt, as well.

Auto sales for March came in better than expected, with Ford's (F) sales down 41%, but beating estimates, and the stock rose 4.18%. General Motors' (GM) sales were down 44.7% and the stock fell 0.5%. Toyota Motors (TM) rose 7.27% because of a "daily selling rate increased from February," according to the head of Toyota USA.

At the close, the Dow Jones Industrial Average (DJI) had gained 153 points to 7,762. The S&P 500 (SPX) was ahead by 13 points to 811, and the Nasdaq (NASD) gained 23 points, closing at 1,552.

On the New York Stock Exchange, advancers were ahead by 3-to-1 on volume of 1.5 billion shares, and the Nasdaq traded 785 million shares with advancers ahead by just under 2-to-1.

Crude oil (May contract) fell $1.27 to $48.39 a barrel due to a report that U.S. petroleum inventories had an unexpected increase last week. The Amex Energy SPDR (XLE) gained 90 cents, closing at $43.36.

The April gold contract ended the day with an increase of $3.50 to $26.10 an ounce on speculation that the G-20 meeting may not alter the world's economic situation. The PHLX Gold/Silver Index (XAU) gained $6.10 to $140.59.