Finally A Rally!
The Dow is up over 600 points the last 3 days.
General Electric (GE) has risen from the $5 level to the $9.50. I should have bought a lot more when the stock was in the high 5′s. GE rose today despite a ratings downgrade. GE dropped from AAA to AA+. Why is this important? Ratings downgrade raise the cost of obtaining capital in the credit markets. I am hoping that $5.87 was the bottom for GE.
Even American Express (AXP) and Capital One (COF)have risen over 25% the past two days. Both credit card companies still face rising delinquencies and defaults but the stocks appear to have been oversold. The companies were pummeled to the single digits.
Blue chip companies like Microsoft (MSFT), Pfizer (PFE) and Disney (DIS) have all bounced double digits from their 52 week lows set last week.
PNC Financial (PNC)might be a good short candidate. PNC is trading at $28.55 which is significantly higher than other regional banks like Suntrust and US Bancorp. I know that PNC plans to pay back TARP funds but can they really do that until they know the extent of their real estate losses?
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