Cautious Optimism

RECOVERY HOPES PUSH UP US SHARES

I'm not going to get carried away and do a happy dance and click my heels,but I'm going to allow myself to feel a little cautious optimism.

US shares rose sharply in Monday trading, with positive news about housing and banking, reviving investor confidence in economic recovery. Bank shares rallied after Wall Street analysts took an upbeat view on the battered sector.

Better - than - expected results from home improvement company, Lowe's triggered hopes that the housing market might rebound.

The benchmark Dow Jones Industrial Average ended up at 2.85%, or 235.44 points , at 8,504.08.

"There's a realization that things are actually going to get better,"said James Cox, managing partner at Harris Financial Group.

ECONOMY STABILIZED

Lowe's Co rose 8.1% to $19.94. Shares in rival Home Depot rose 6.6% to $26.02. Lowe's net profit totalled $476 million in the three months to May 1st compared with $607 million for the same period last year - a smaller fall than analysts predicted.
Bank of America rose 9.9% to $11.73 after Goldman Sachs analysts advised clients to buy the stock and Citigroup analysts said the bank would return to profit in the second quarter.

JP Morgan climbed 6.7% to $37.26, while Citigroup added 4.6% to $3.64.The market's renewed optimism was cautiously shared by the US Treasury Secretary Timothy Geithner. Mr Geithner said that the US economy had "clearly stabilized" but warned that the recovery would be bumpy and fragile.
"Even as growth starts to turn positive, which will happen ...it's not going to feel better for a long time for millions of Americans."