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Despite a steady stream of negative economic reports, the market has climbed — nearly 11 percent over the past few weeks. Junk bonds, those risky corporate I.O.U.'s, are rebounding. The worth of financial shares, bank loans, complex credit derivatives — up, up, up. Many on Wall Street, the center of the credit crisis, appear to believe that the worst is . For the first time in months, analysts and executives sound optimistic again. Many of them foresee a broad, recovery in both the economy and the financial markets arriving in the second half of this year, a forecast some market strategists describe as at best. For now, policy makers are mirroring the sentiment on Wall Street. Treasury Secretary Henry M. Paulson Jr. said in an interview with Bloomberg Television on Thursday that "we are closer to the end of this problem than we are to the beginning." A report from the Bank of England, meanwhile, concluded that mortgage , which have been at the core of the financial troubles, probably have too far. The central bank said prices of such securities should "recover in the coming months." Financial stocks and the broader market on Thursday as the dollar strengthened and oil prices dropped for the third day in a . The Standard & Poor's 500-stock index closed up 1.7 percent, to 1,409.34 points; the Dow Jones industrial average recorded a 189.87-point gain, to 13,010; and the Nasdaq composite jumped 2.8 percent. Another day or two like that, and those market will be in positive territory for the year.
Despite a steady stream of negative economic reports, the equity market has climbed — nearly 11 percent over the past few weeks. Junk bonds, those risky corporate I.O.U.'s, are rebounding. The worth of financial shares, bank loans, complex credit derivatives — up, up, up. Many on Wall Street, the center of the credit crisis, appear to believe that the worst is finished. For the first time in months, analysts and executives sound optimistic again. Many of them foresee a broad, lasting recovery in both the economy and the financial markets arriving in the second half of this year, a forecast some market strategists describe as optimistic at best. For now, policy makers are mirroring the sentiment on Wall Street. Treasury Secretary Henry M. Paulson Jr. said in an interview with Bloomberg Television on Thursday that "we are closer to the end of this problem than we are to the beginning." A report from the Bank of England, meanwhile, concluded that mortgage bonds, which have been at the core of the financial troubles, probably have dropped too far. The central bank said prices of such securities should "recover slowly in the coming months." Financial stocks and the broader market soared on Thursday as the dollar strengthened and oil prices dropped for the third day in a streak. The Standard & Poor's 500-stock index closed up 1.7 percent, to 1,409.34 points; the Dow Jones industrial average recorded a 189.87-point gain, to 13,010; and the Nasdaq composite jumped 2.8 percent. Another day or two like that, and those market indices will be in positive territory for the year.