NEW YORK — Wall Street’s big rally fizzled — and maybe that’s OK.
Analysts said Monday’s pullback after a four-session surge didn’t necessarily signal that traders are reconsidering their newfound optimism about financial stocks, a main driver behind last week’s advance.
In fact, some viewed the measured easing in stocks as reassuring following a surge of more than 9 percent in major indicators last week, more than the market has moved in some years.
“This is healthy,” said Dave Rovelli, managing director of trading at brokerage Canaccord Adams in New York. “The best thing for this market is that we don’t go up aggressively. A steady rise of a few up days then a down day would be a lot better than 1,000 points up.”
Stocks had been higher for much of the session as investors snapped up hard-hit financial shares.
Stocks started the day higher after comments from Federal Reserve Chairman Ben Bernanke and positive news from a British bank eased worries about the overall economy and prospects for financial companies struggling with bad debt.
Bernanke said Sunday the recession would probably end this year if the government’s efforts to revive the banking industry succeed.
In an interview with CBS’s “60 Minutes,” Bernanke said fixing the economy will require getting banks to lend more freely and financial markets to work more normally again.
Britain’s Barclays reassured investors after saying it has been performing well in 2009.
On Monday, the Dow slipped 7.01, or 0.1 percent, to 7,216.97. The blue chips rose as much as 169 points during the session. The Standard & Poor’s 500 fell 2.66, or 0.4 percent, to 753.89, while the tech-heavy Nasdaq composite fell 27.48, or 1.9 percent, to 1,404.02.
It was “a slow bleed into the close,” said Ryan Larson, equity trader at Voyageur Asset Management. “Nothing specific hit the pavement in terms of negative news. The market’s just exhausted at this point. Healthy profit-taking is expected, and it happened today.”
Most Asian stock markets extended their gains today, as investors poured into banking shares amid easing fears about the world’s hard-hit financial system. Japan’s Nikkei 225 index was up 1.5 percent, and South Korea’s Kospi gained 1.4 percent.
