US Stocks Clear Third Hurdle

Wednesday, November 10, 2010

The US stock market has cleared its third hurdle: Company earnings once again came in ahead of expectations, pulling stocks up and defeating worries of a dismal October.

As June ended, the US stock market was down markedly from its April highs, and I thought it faced three hurdles to rebuild its base and regain investor interest. Since then, it has cleared all three, overwhelming dire forecasts and causing the Dow Jones Industrial Average (DJIA) to rise 18% through Friday, November 5 (excluding dividends). Amid the rising fundamentals and stock prices, investor enthusiasm also improved.

Here are the four articles that describe the hurdles and interim progress:

Hurdles described:

This Stock Market Decline Is Painful” (July 2)

Progress report: Hurdle #1:

US Stocks Clearing Their First Hurdle” (July 27)

Progress report: Pre-hurdle #2 (after August sell-off):

Why Wall Street Might Spur a Bull Market in 2011” (September 7)

Progress report: Hurdle #2 and pre-hurdle #3:

US Stocks’ Third Hurdle Just Around the Corner” (September 21)

Below is the updated graph showing all three hurdles.

So… The US stock market, by clearing all three hurdles, has successfully overcome springtime’s fears. What’s next? That will be the subject of my next write-ups.

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