Market Recap - March 27, 2009

Stocks traded lower on Friday, as investors sold some shares and took in profits from the big gains over the past couple of weeks.  The Dow Jones Industrial Average fell 148.38 points (-1.87%), and the S&P 500 also dropped 16.92 points (-2.03%). It was a bad way to end such a great week, as the Dow rose 6.8% this week, and the S&P also climbed 6.2%. 

 

The Dow has surged 21% over the past 13 days, and to think that this unbelievable rally could continue without any profit taking or slight reality checks would be unrealistic.  Although investors are definitely more optimistic about the markets and the economy than they were a month ago, it seems like 21% in 13 days was just too much.  There is still some worry that Wall Street will be disappointed when companies release first quarter earnings.  Another argument that many investors have is that the markets need to retest the lows from a couple of weeks ago and bounce up again in order to truly indicate a market bottom.  As great as this rally has been, I still don’t think that it has convinced anyone that things have officially turned around.  Until that happens, volatility will remain high and investors will continue to debate what to do next.

 

Niki Pezeshki

College Trillionaire