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- FDA proposes ban on e-cigarette sales to minors
- Bad omen? Italian man crushed to death by John Paul II crucifix
- Company stopped from accepting abortion waste
- Girl surprises Michelle Obama with unemployed dad’s resume
- ‘Harry Potter’ religion class seeks to enlighten students on ‘God, sin, and theodicy’
- ‘Optionally piloted’ Black Hawk helicopter clears tests; future missions to go ‘fully unmanned’
- Vice News reporter kidnapped in Ukraine is freed after being beaten, blindfolded
- FCC’s new ‘net neutrality’ proposal sparks outrage among consumer advocates
- Families of ferry’s lost confront South Korean officials
Wall Street shows best results since ‘99
Investors are smiling for the first time in years when opening their financial statements this month, thanks to the best stock market performance since 1999.
“This was a nice quarter for me. I’m hoping this is just the beginning,” said Justin McCarthy, a lobbyist who has invested about 60 percent of his portfolio in health care. His latest statement showed the first encouraging results in three years.
The Standard & Poor’s 500 index has risen 26 percent since March, primarily from optimism that the economy and corporate profits will improve during the second half of the year.
Also fueling the rebound, now in its fifth month: the end of major combat in Iraq, the passage of investor-friendly tax legislation on Capitol Hill, and interest rates that have plunged to historic lows.
“For the investor who has 50 to 60 percent of their account in the equity markets, we are looking at very significant increases,” said Richard E. Cripps, chief market strategist for Legg Mason Inc., a Baltimore brokerage.
The S&P; rally is “a welcome event by any standard,” Mr. Cripps said.
Thanks to the strong second-quarter performance, some investors appear ready to take a gamble on Wall Street.
Heather Dell, a sales executive at a Manhattan advertising firm, said she increased her 401(k) contributions in the past month, from 3 percent of her pretax income to 15 percent, and she is buying individual stocks again.
The brokerage operated by the Motley Fool Inc., an Alexandria investment-information firm, has experienced double-digit increases in customers in recent months, according to senior analyst Tom Jacobs. Clients also are asking more about Individual Retirement Accounts, he said.
“The downside is there are individual investors who aren’t that experienced who jump into the market at times of maximum enthusiasm and jump out at times of maximum frustration,” Mr. Jacobs said.
One Federal Reserve employee who did not want to be identified compared the market to gambling.
“One minute you’re up, the next you’re down,” she said. “It’s like blackjack. Sometimes you don’t know when to fold or to stick.”
Online broker Scottrade had its biggest day in history June 6, handling 106,000 trades. In the past month, Scottrade’s daily average was about 75,000 transactions, nearly three times the 28,562 traded per day during June last year.
“It is just a huge pickup in demand and a change in psychology that is different than I have seen before. It is just an extreme change in investor psychology,” said Rodger Riney, chief executive officer of Scottrade.
By Andrew P. Napolitano
Obama's veil of secrecy is pierced
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