Bullish comments boost US markets

US stocks rallied more than 2 per cent yesterday as bullish comments on financial sector performance from analyst Meredith Whitney lifted hopes that banks&rsquo; quarterly results may be stronger than expected.<br /><br />Light volumes made it easier for stocks to post such a big move, analysts said. The Dow industrials and S&amp;P 500 had their best gains since June 1.<br /><br />Whitney, who has in the past been bearish, also upgraded <strong>Goldman Sachs</strong> to a &ldquo;buy&rdquo; this morning, driving its stock up 5.3 per cent to $149.44. The S&amp;P Financial Index, meanwhile, jumped 6.5 per cent.<br /><br />In comments to CNBC television, Whitney said bank shares were in for at least a short-term gain of 15 per cent and that major financials, including <strong>Bank of America</strong> and <strong>JPMorgan Chase</strong>, which along with <strong>Goldman</strong> are scheduled to report results this week, could do well in the second quarter.<br /><br />Her comments offset concerns that <strong>CIT Group</strong>, a lender to many small- and mid-sized businesses, was struggling to stay afloat.<br /><br />The <strong>Goldman Sachs</strong> upgrade &ldquo;kind of turned sentiment around short-term. It was enough to send the market up,&rdquo; said Fred Dickson, market strategist at D.A. Davidson. &ldquo;Basically, people are putting a little bit of money on the table ahead of earnings this week.&rdquo;<br /><br />Dickson also said the gains come on the heels of four straight down weeks for the Dow and S&amp;P 500, suggesting the market had become oversold.<br /><br />The Dow Jones industrial average rose 185.16 points, or 2.27 per cent, to end at 8,331.68. The Standard &amp; Poor&rsquo;s 500 Index was up 21.92 points, or 2.49 per cent, at 901.05. The Nasdaq Composite Index was up 37.18 points, or 2.12 per cent, at 1,793.21.<br /><br />Stronger-than-expected first-quarter bank earnings prompted sharp gains in the sector&rsquo;s stocks and helped fuel a rally of as much as 40 per cent in the S&amp;P 500 from March through May.<br /><br />With second-quarter results, investors will be looking for evidence or upbeat comments from companies that suggest the US economy is getting better.