The first quarter on Wall Street was so extreme it included a bear market and a bull market all its own — moves that sometimes take years or more. Now investors head for spring still unsure which side is in control.
So what now? The answer could be found in a mixture of economic reports that will help Wall Street determine whether there really is hope that the recession, among the longest since the Great Depression, is turning around — or at least stabilizing.
Manufacturing reports coming this week will give investors clues about whether business is picking up, and the March employment report will shed light on whether the job market pain is still getting worse.
"There was no light at the end of the tunnel in January and February. Now there's some," said Hugh Johnson, chief investment officer at Johnson Illington Advisors in Albany, N.Y. "It's very, very faint."
The stock market tends to trade on investors' expectations for how business will look six months to a year down the line. So the outlooks that companies issue with their earnings reports in April will be critical to whether Wall Street goes bull or bear.
Quincy Krosby, chief investment strategist at The Hartford, expects that, at best, the market will hold its gains but not push much higher as investors examine the coming quarterly reports from companies. "Going sideways," she said, "would be a victory."
On Tuesday, the Dow finished at 7,608.92, a gain of more than 1 percent for the day, still looking a lot better than the lows of early March. Just a day earlier, the market showed its fragility: The Dow plunged 254 points after President Barack Obama rejected the restructuring plans of General Motors and Chrysler.
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