It was the second week in a row of strong equity markets. The Dow Jones Industrial
Average rose 4.0% to 9,093, the S&P 500 Index advanced 4.1% to close at 979 and
the Nasdaq Composite added 4.1% to close the week at 1,966. This puts the Dow
Jones Industrial Average into positive territory, the S&P Index up almost 10% and
the Nasdaq up almost 25% for the year to date.

The last two weeks were the best back to back weeks the market has seen in nearly
a decade due to the fact that earnings expectations increased as second-quarter
earnings are coming in generally better than expected. We would note that the
number of new highs last week was 175, while the number of lows was only 9. We
have not seen this for quite some time. Maybe even more important than this, though, is the character of the rally. While the rally from early March to early May was about low quality names and weak companies surviving, the last two weeks have been more fundamentally oriented, focusing on blue chip, high-quality names.


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