Bulls romp ahead of jobs data; transports near all-time high

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Who knew the capitalists could be in such a good mood on May Day?

Stocks vaulted higher today, with the Dow industrials gaining 189.87 points, or 1.5%, to 13,010.00 -- the highest close since Jan. 3.

And the Standard & Poor’s 500 index rose 1.7% to 1,409.34. For chart-watchers, that’s significant because the index since late January had made three runs at the 1,400 mark, only to fall short each time.

‘Over the last few months that has been the resistance level,’ said Marc Pado, U.S. market strategist at Cantor Fitzgerald.

More data points for numbers junkies: The S&P 500 now is up 10.7% from its multiyear low in mid-March, and has trimmed its loss from its October record high to just under 10%.

Buyers jumped in today as two favorable trends of the last few weeks resumed: the dollar strengthened and commodity prices fell, with oil sliding below $113 a barrel. Both of those trends are exactly what the Federal Reserve has been hoping to see.

The rally was all the more gutsy given that the government on Friday will report on April employment. The data are likely to show another month of net job losses.

Stock market bulls continue to bet that the economy, however weak, isn’t falling off a cliff. There’s no clearer sign of that bet than the Dow transportation-stock index: Fueled by railroad and trucking shares, the index jumped 3.4% today to 5,344.06. That left it less than 2% below its record high reached last July.

You don’t buy railroads and trucking companies if you believe a devastating recession is on the horizon.

Posted May 1, 2008