New Jobless Claims Highest Since September 2001, Dow Stages 3rd Largest Point Rally In History

Go figure.

Stocks sold off early after the Labor Department said the number of newly laid-off individuals seeking unemployment benefits jumped last week to the highest level since right after the Sept. 11, 2001 terrorist attacks. There was also more evidence of a severe pullback in consumer spending -- a worsening trend that had pummeled stocks earlier in the week. Wal-Mart Stores Inc. trimmed expectations for full-year earnings, and Intel Corp. late Wednesday cut more than $1 billion from its sales forecast.
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The Dow rose 552.59, or 6.67 percent, to 8,835.25, after falling as low as 7,965.42 and rising as high as 8,876.59. That's a trading range of 911 points. The Dow did not sink below its Oct. 10 trading low of 7,882.51.

In the five weeks since the Dow set its multi-year low, it has successfully re-tested that level twice (plunging nearly 1,000 points over three days to an intraday low of 8,143.59 on October 27th and bottoming out at 7,965.42 today).

It's hard to read any reliable sentiment (other than frenzy) into the market with the VIX still flirting with 70, but given the two successful tests and the historically huge rally that took hold today in the face of unexpectedly bad economic news, a case can be made that market bears are gradually being ousted from the driver's seat.