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The Dow Jones Industrial Average is rallying rather handily this morning, already topping a gain of 160 points, and breaking through the psychologically important 9,000 level. Of course, it remains to be seen whether or not the Dow will close above 9,000, but the bulls seem firmly in control for now, and there is optimism that it will actually happen today.

One of the main factors in all this investor optimism has to do with profits. Companies are announcing profits left and right. Bank profits have been especially encouraging, since it seems like just yesterday they were reporting losses and we were concerned about the complete collapse of our financial system. Some of the stocks posting new or higher profits for the last quarter include:

• Ford
• New York Times
• JetBlue
• Wyeth
• Safeway

Other companies have been reporting profits as well. And, of course, there are some companies posting losses and profits that are just “in line” with expectations. The real enthusiasm on Wall Street comes from those companies that are beating forecasted earnings. That is a sign that things might be turning around for businesses — and maybe for the economy.

The news is good enough in terms of businesses that Wall Street is shrugging off the unemployment data, ignoring the fact that unemployment claims rose last week. Of course, since investors are in a positive mood, they could just be choosing to focus on the fact that the four-week moving average for jobless claims is down.

At any rate, if you are looking for some good deals on the stock market, now is the time. There are solid companies at bargain prices, and it is a good change to get in while you can still get relatively strong companies for cheap.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.

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The stock market is in a bit of a volatile mood today. Stocks are swinging between gains and losses as investors try to figure out how they feel about a number of things. Sentiment is rather mixed as investors consider some of these factors:

• Upcoming health care reform legislation.
• Ben Bernanke’s revelation yesterday of an “exit strategy” from economic stimulus that involves limiting inflation.
• Earnings reports.
• Home prices trends.
• Concerns over unemployment.
• Profit taking.

There are a number of issues that are influencing investors right now, that is resulting in a measure of uncertainty. The bulls want to take the good news and run with it, while the bears point out that there is plenty of bad news and that caution is necessary. In the end, it has meant that the Dow has moved on both sides of the break even point so far today.

Health care companies doing well

Health care companies are doing well right now on the stock market. While Standard & Poor’s reports that 10% of earnings havetopped forecasts, it is clear that much of that success can be laid at the feet of the health care industry. MarkeWatch reports on the movement of the health care companies on the market:

Of the 109 reported issues, or 29% of the broad index’s market value, health-care companies contributed the greatest portion — more than 19% — of earnings per share in the second quarter, followed by information technology, which weighed in with a more than 14% earnings contribution, said S&P senior index analyst Howard Silverblatt.

Even if health care reform does go through, there is still plenty of money to be made in the health care industry. Aging baby boomers will be needed services, and there is always a market for health care products.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.

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After opening higher today, the Dow is retreating. Ben Bernanke offered testimony before Congress today, focusing on economic recovery policy, and outlining an economic stimulus exit strategy designed to prevent inflation. The Financial Times reports on part of Bernanke’s remarks today:

“We…believe that it is important to assure the public and the markets that the extraordinary policy measures we have taken in response to the financial crisis and the recession can be withdrawn in a smooth and timely manner as needed,” he said.

The Fed could raise the interest paid on reserve balances to help set a floor on interest rates, Mr Bernanke said, and even sell its long-term securities should it prove necessary. However, he emphasised that the Fed does not plan to implement this while the economy remains fragile.

The news hasn’t seemed to put much confidence in the stock market, though, since stocks are falling now that reports of Bernanke’s remarks are being distributed. U.S. Treasury bonds, on the other hand, are rallying on the news, reports MarketWatch:

“The bond market seems to be rallying on Bernanke’s comments on an exit strategy, and perhaps on relief that changes are not imminent,” said analysts at Action Economics.

The news seems to indicate that economic recovery is not imminent, and that means that investors are not ready to take the big risks. This is sending the stock market lower, since perhaps some Wall Street types were hoping that Bernanke would focus on positive earnings and indications that economic recovery is eminent. However, Bernanke kept his comments conservative and cautious, prompting investors to acknowledge that maybe they have been overly exuberant in recent days.

Some of today’s losses are probably also due to profit taking after a couple sessions of solid gains.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.