The Dow Fights Back: A 200-Point Gain at Midday

After its worst day since 2008, the Dow Jones Industrial Average bounced back
strong, gaining more than 200 points, better than 2% higher, to over 11,027.
Investors were anticipating a statement from the Federal Reserve that would
restore confidence in the markets. BlackRock announced it was cashing in gold
and bond investments to take advantage of lower prices for equities. Advancing
stocks outnumber declining stocks by better than a 4-to-1 margin. Leading the
Dow forward with more than a 5% gain was Bank of America (NYSE: BAC ), picking
up more than 30 cents to over $6.80 per share. Wells Fargo was upgraded this
morning, which gave a lift to the entire banking sector. Bank of America CFO
Bruce Thomson also told an analyst that the bank would not need to raise any
capital to meet its requirements. Previously, reports stated that Bank of
America would need $50 billion to meet mortgage losses and Basel III
requirements. Alcoa (NYSE: AA ) was up more than 30 cents, or about 2.5%, to
around $11.80 as aluminum prices started to recover. Prospects of weaker
economic activity around the globe have Alcoa down more than 23% for the past
week. Alcoa has a relative strength index of 16, with 30 the standard for a
stock to be considered oversold. Also coming back on hopes of stronger global
economic growth was Caterpillar (NYSE: CAT ), up more than $3, or more than 3%,
to over $85.60. The Big Cat is down about 25% for the month and the quarter. In
the last week, it has lost about 18%, around $20 a share. Caterpillar has a
relative strength index rating of 30.48. Wal-Mart (NYSE: WMT ) gained about
$1.20 per share to over $50, around a 2.5% increase. Wal-Mart reportedly is in
talks to buy the Brazilian unit of Carrefours, the French retailer. Down about
7% for the week, Wal-Mart has a relative strength index rating 28.37. With its
above-average dividend and consumer retail base, Wal-Mart is being regarded as a
defensive play by investors. Microsoft (NASDAQ: MSFT ) also was regaining its
footing with a climb of about 2.5% to over $25, around a 60-cent gain. With its
strong dividend and blue-chip status, Microsoft is the target of bargain hunters
this morning, based on several reports. Microsoft is down about 10% for the week
and 10% for the month. Cisco (NASDAQ: CSCO ) was a tech having trouble regaining
its footing, both touching negative and positive territory in early morning
buying and selling, hovering around $13.95. Cisco is at its 52-week low. Recent
announcements of layoffs and $1 billion in savings led a rally for the stock.
Cisco is down more than 10% for the week, quarter and month. It has a relative
strength index rating of 29.46. Jonathan Yates does not own any of the stocks
mentioned in this article.