- The Washington Times - Friday, March 13, 2009

NEW YORK (AP) - Investors prepared to extend Wall Street’s advance into a fourth straight session Friday following more encouraging comments from bank executives and better-than-expected trade data.

Reports that Citigroup Inc.’s chairman Richard Parsons said the bank doesn’t need additional government support after receiving three bailouts helped lift financial stocks in premarket trading. Overseas markets were also higher.

The reports come a day after Bank of America Corp.’s chief executive Ken Lewis said his bank was profitable in January and February. On Tuesday, news that Citigroup was having its best quarter since 2007 started the rally that has lifted the Dow Jones industrials nearly 10 percent in three days.

Uncertainty about the financial system’s future has been the driving force behind the unrelenting selling that has plagued investors for weeks, so any good news coming out of that industry is particularly encouraging.

A government report showing that the U.S. trade gap narrowed in January also helped buoy the market.

The Commerce Department said the trade imbalance dropped to $36 billion in the first month of the year, a 9.7 percent decline from December and the lowest level since October 2002. The improvement reflects a drop in demand for crude oil imports and other foreign goods.

Markets in Asia and Europe, meanwhile, rose on hopes for new economic stimulus measures in China and Japan. Chinese Premier Wen Jiabao said the government is ready to roll out even more measures, while Japan’s prime minister is calling for a new stimulus package.

Dow Jones industrial average futures rose 21, or 0.3 percent, to 7,137. Standard & Poor’s 500 index futures gained 7.20, or 1 percent, to 755.60, while Nasdaq 100 index futures rose 3, or 0.3 percent, to 1,166.

Earlier, Japan’s Nikkei stock average jumped 5.15 percent, while Hong Kong’s Hang Seng index rallied 4.37 percent. In afternoon trading, Britain’s FTSE 100 was up 2.58 percent, Germany’s DAX index was up 2.07 percent, and France’s CAC-40 was up 1.65 percent.

Stocks have rallied not only on the banking news this week, but also in response to surprisingly positive reports from companies across a wide range of industries that are lifting hopes for an economic turnaround.

While the week’s gains have been a welcome respite to the market’s furious selling and the sentiment on the Street is more upbeat than it has been in months, analysts warn the rally may not last long.

“I don’t think any of the material facts on the ground with respect to the economy have changed whatsoever,” said Kevin L. Kramer, president and chief operating officer of West End Financial Advisors LLC. “I think we’re reading way beyond what the data suggests.”

Technical factors that have helped drive the market this week are likely to continue Friday, including short covering, when traders buy stock to cover “short” bets, or bets that a stock will fall.

Also feeding optimism about banks this week was news that an accounting board may recommend an easing of financial reporting rules of tough-to-sell assets. Banks say a change in so-called “mark-to-market” accounting rules would help their bottom lines. Meanwhile, the Securities and Exchange Commission has said it is considering reinstating the “Uptick Rule.” The rule, eliminated in 2007, is aimed at curbing short-selling, which can exacerbate the decline of a stock.

In premarket trading, Citigroup shares added 16 cents, or 9.6 percent, to $1.83, while Bank of America shares rose 33 cents, or 5.6 percent, to $6.18.

Bond prices were mixed early Friday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 2.91 percent from 2.86 percent late Thursday. The yield on the three-month T-bill, considered one of the safest investments, fell to 0.17 percent from 0.22 percent late Thursday.

The dollar fell against other major currencies, while gold prices rose.

Light, sweet crude for April delivery rose 46 cents to $47.49 a barrel in electronic premarket trading on the New York Mercantile Exchange.

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On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

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