Replies to post #74544 on Biotech Values

[DewDiligence]

[OT] Roubini:

He is not an hysterical charlatan, but a competent economist…

In the NYT article posted by grandpatb, Roubini offers nothing but mindless doom and gloom, as mouton stated succinctly in #msg-36296925. Having read a number of articles in various publications that contained excerpts from Roubini, I’ve yet to see anything that would entice me to go to Roubini’s website to hear more.

[DewDiligence]

S&P 500 Reaches Positive Ground for Calendar Year

[More consequential is that the S&P 500 is now up 36% from its low in early March, when there was no shortage of articles proclaiming that the world was coming to an end. Nouriel Roubini can kiss my ass!]

http://online.wsj.com/article/SB124143323649382925.html

›MAY 4, 2009, 4:08 P.M. ET
By PETER A. MCKAY and ROB CURRAN

An across-the-board surge in stocks turned the broad Standard & Poor's 500 positive for 2009 after data showed increased construction spending and pending-home sales.

Markets have been marching higher for nearly two months, with the S&P 500 gaining about 35% since hitting its bear-market lows in early March, and data Monday that showed the first increase in construction spending in six months and a 3.2% jump in pending home sales gave stocks another shove.

The Dow Jones Industrial Average gained 214.33 points, or 2.6%, at 8426.74. The blue-chip benchmark is now down just 4% for the year to date.

The S&P 500 jumped 29.71 points, or 3.4%, to 907.23 as a late burst of buying turned the benchmark positive for the year to date, up 0.4%. Its financial sector jumped 10%, and its basic-materials sector rose 5.6%. [CLF, my favorite play in the “basic materials” sector, is up 40% in the past week after reporting weak earnings and terrible business conditions!] Investors snapped up energy and consumer stocks, betting that the economy may have bottomed out in the first quarter, when it shrank at a 6.1% seasonally adjusted annual rate.

Bill Frejlich, a futures broker at Fox Investments in Chicago, said that there has been a marked change in investor sentiment.

"We've reached a point where the selloffs are short-lived," he said. "Even if you get a downdraft, it lasts a week or so, then you get a new high because people are looking for entry points to the market."

In another sign of the economic optimism sweeping trading floors, crude-oil futures settled at $54.47 a barrel, the highest level this year. Crude has gained more than 9% in the last four trading days and is up 60% from its 2009 closing low of $33.98, hit on February 12, 2009.

With stocks substantially above their worst levels for the current bear market, market watchers said that some investors were now feeling compelled to push funds into the market after missing out on the early part of the rally.

"If you're one of the big bears out there, you really have to worry that you haven't participated," [that would be you, Nouriel Roubini] said Robert Pavlik, chief market strategist at Banyan Partners in New York. "You're seriously underperforming at this point."

Joe Kinahan, chief derivatives strategist at brokerage thinkorswim, said many traders had expected the S&P 500 to pull back after hitting the 870 level, but that hasn't happened. "A lot of people are getting caught short here," he said.

The Nasdaq Composite Index, which is up 12% for the year to date and has led the recent recovery, climbed 44.36 points, or 2.6%, to 1763.56.

Financial stocks bounced, with Citigroup rising 7.7% and Bank of America up 19% ahead of the expected release later this week of the results of the U.S. government's stress tests of key banks. Bank of America denied a report that it's seeking to raise another $10 billion in capital. Wells Fargo surged 24% despite an Associated Press report that it was told by regulators it needed more capital.

Metals and mining stocks, which are particularly sensitive to changes in the economic outlook, jumped. Alcoa gained 6.9%, U.S. Steel rose 10% and Nucor gained 8.3%. Freeport-McMoran Copper & Gold gained 9.4%.

Airline stocks rose on hopes that travel demand would withstand the swine flu outbreak. The World Health Organization moved closer to declaring the new strain a global pandemic, but health officials cautioned that such a move doesn't mean the disease, which has proven mild outside of Mexico, is deadly to most people or will sweep the entire globe.

Delta Air Lines shares advanced 9.4%, Continental Airlines rose 18% and Southwest Airlines climbed 4.5%. Cruise-ship operator Carnival gained 13%.

Stocks were generally stronger overseas, with markets in Asia climbing after data showed an improvement in Chinese manufacturing activity. Hong Kong's Hang Seng Index jumped 5.5%, reclaiming the 16,000-point level for the first time since mid-October. Markets in Japan were closed for a holiday. In Europe, stocks made modest gains. Markets in the U.K. were also closed for a holiday.

Rich Golinski, a principal at the San Francisco-based wealth-management firm Bingham, Osborn & Scarborough, said he's concerned that a bout of euphoria has taken hold of the market since the bear-market lows and is due to end soon.

Referring to the worst-case expectations for corporate profits, which are still declining even if they've beaten analysts' expectations, he said: "There's a relief right now that the world isn't coming to an end, but a lot of serious problems are still around."

He said a worse-than-expected unemployment reading Friday could act as a catalyst for a prolonged market reversal. But the bigger risk may be that investors' mood simply swings back to more gloomy terrain on its own.

"You get the sense that it's not necessarily an economic data point that will get investors to refocus on the current difficulties," Mr. Golinski said.‹