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Renita Jablonski: All eyes are on the stock market today after a strong week of trading. The Dow finished up 174 points yesterday. It closed at 7,924. That’s up more than 20 percent since the market’s low earlier this month. Tamara Keith takes a look at what that means, or doesn’t mean.
Tamara Keith: There’s a common belief that a 20 percent rise in the Dow or the S&P is the sign of a new bull market. And the Dow has risen 21 percent since March 9.
But Charles Geisst, a professor of finance at Manhattan College, says this is more likely what they call a bear market rally. He says there are way too many negative economic indicators out there for this to be a real bull market.
Charles Geisst: Right now, the market’s rally is an indicator of popular psychology amongst some investors and traders that things are over with, but it’s not much more than that.
So, what’s going on? Geisst says this is a trader’s market.
Geisst: Most retail investors, those who sit home and do their own investing, are staying away from this sort of rally. So this is mostly professionals just jumping in and out for a few bucks here and there.
He says that during The Great Depression, there were bear market rallies. They got people’s hopes up, only to be followed by further declines.
In Washington, I’m Tamara Keith for Marketplace.
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