Market Rally Week

Not withstanding the economic news, markets continued their rally this week. With low interest rates, monies are beginning to flow back into the market. This rally now 8 weeks running is been strong. The momentum is there. The market is due for a temporary correction while it is on this major leg up.

From Schaeffer's Investment Research - Friday's wrap comments:

The equities market today continued its recent habit of rallying in the face of generally dire economic news. Headlining today was the Labor Department's nonfarm payrolls report, which revealed that the pace of job losses is slowing. Although the economy shed a whopping 539,000 jobs in April, analysts were expecting a steeper decline of more than 600,000. The banking sector's stress test results were also better than the worst-case scenario, with 10 out of 19 institutions failing to pass muster. The under-capitalized banks need a total of $74.6 billion to boost their reserves, according to the Treasury Department. "The results released today should provide considerable comfort to investors and the public," said Federal Reserve Chairman Ben Bernanke, adding that his primary concern was the quality of capital at major banks, rather than the quantity.
The Dow Jones Industrial Average (DJIA – 8,574.65) took the day's news as a cue to extend its recent rally, ending the day up 164.8 points, or nearly 2%. American Express (AXP) and JPMorgan Chase (JPM) set the pace for the 24 advancing blue chips after investors learned that neither financial firm was in need of additional capital. Meanwhile, tech titan Intel (INTC) swallowed the steepest loss of the six declining Dow members. For the week, the Dow added 4.4%, and notched a weekly close above the 8,500 level for the first time since Jan. 9.

Crude futures followed suit with U.S. stocks, blazing a path higher on hopes that the economy's slump may have finally hit rock-bottom. In fact, the prospect of a potential rebound in energy demand propelled black gold to its highest closing price in six months. Weakness in the U.S. dollar also drew some buyers to the hot commodity, with heightened risk appetites pressuring the greenback lower versus the euro. June-dated crude oil ended the day up $1.92, or 3.4%, at $58.63 per barrel -- its highest daily close since Nov. 11, 2008. For the week, crude futures rocketed to a gain of 10.2%.

Amid an upbeat day in the equities market and better-than-expected economic data, gold futures snapped their five-day winning streak. The malleable metal continues to attract attention from investors seeking a safe haven from the specter of inflation, though, which limited today's losses. By the close, gold for June delivery dropped just 60 cents, or 0.1%, to finish at $914.90 per ounce. On a weekly basis, the front-month contract added an even 3%.