http://www.usatoday.com/printedition/money/20070423/1b_dowstreak23.art.htm
Dow gains in 15 of last 16 sessions
Winning streak is among longest in index's history
By Adam Shell
USA TODAY
NEW YORK — In its quest to scale 13,000, the streaking Dow Jones
industrial average has posted gains in 15 of the last 16 sessions, a
feat accomplished only three times and last achieved 15 years ago.
There has been only one longer winning stretch interrupted by a single
down day: a 20 out of 21 bull run that ended on Aug. 2, 1927, Dow
Jones Indexes says.
This comes less than eight weeks after stocks seemed on the verge of a
meltdown. The Dow plunged 416 points Feb. 27 in response to an 8.8%
stock decline in China that fanned fears of global financial
contagion.
Janna Sampson, portfolio manager at OakBrook Investments, credits the
ability of U.S. companies to top first-quarter profit forecasts as a
prime reason for the rally. It suggests the economy, hobbled by a
housing slump, is not in as bad of shape as people think. "People had
gotten way too pessimistic."
The Dow, which almost fell below 12,000 in early March, starts the
week about 38 points from cracking 13,000. If it reaches that
milestone, optimists will argue that it's confirmation the 4-year-old
bull market is intact. Bears will conclude that the aging bull is
nearing a top.
What's driving the rally?
•Not-so-puny profit growth. Traders braced for the worst heading into
the first-quarter earnings season. On April 1, analysts were expecting
companies in the Standard & Poor's 500 to grow earnings at a 3.7%
clip, down sharply from an estimate of 8.7% on Jan. 1, Thomson
Financial says. But with 129 companies reporting so far, first-quarter
earnings growth is averaging 10.1%. The full-quarter estimate has
risen to 5.2%.
"There was more fear heading into this earnings season than there was
at the bottom of the bear market in 2003," says Todd Salamone, a
senior research analyst at Schaeffer's Investment Research.
•Profits from abroad soar. That's a plus, given that roughly half the
revenue of S&P 500 companies comes from abroad, says Howard
Silverblatt, analyst at S&P. A weak dollar, which boosts foreign
profits of U.S. multinationals, is also helping.
•Deal mania frees up cash. The nine buyouts of S&P 500 stocks this
year have created $131 billion in fresh capital, Silverblatt says.
"That money has to go somewhere," he says.
