Mainenews reporter

Wall Street hopes Dow can deliver back-to-back up days after record rally

Wall Street hopes Dow can deliver back-to-back up days after record rally

Wall Street will be watching to see if the Dow Jones industrial average’s rally of more than 600 points Wednesday was more than a one-day wonder. Sure, Wednesday’s relief rally, the blue-chip stock gauge’s best one-day point gain since the dark days of the financial crisis in fall 2008, was welcomed by traders and investors around the globe.Wall_Street_Sign

But it won’t mean much if the Dow stumbles anew Thursday, raising fresh questions about the stability of the stock market following its worst meltdown in four years due to global growth fears sparked by a slowdown in China. What Wall Street wants to see is a so-called follow-through day. In short, traders want to see the Dow rally again. They want to see high trading volume on an up day. They want to see a second day of gains. They want to see the bulls return in force.

In early trading Wednesday, the Dow was up more than 225 points, building on Wednesday’s historic gain. If the Dow relapses, it could signal more trouble ahead and undue a lot of the positives from the Dow’s massive rally into Wednesday’s close.

Simply put, investors want to see the gains stick. They want to see the losses from the Dow’s recent peak shrink. (The Dow was off 14.5% from its May 19 record close prior to yesterday’s big rally.) They want to get a better feeling about the market, rather than fear the next rout. “Powerful spikes are very much part of the recovery process, but so are powerful dead-cat bounces (or big one-day rallies that fizzle),” says Quincy Krosby, market strategist at Prudential Financial. “We’ll be looking for broader strength indicating that investors are putting money to work across sectors.”