Week ending March 23: Fed statement, takeover activity boost stocks.
Markets surged to their best weekly performance in recent years due to a series of positive news stories. The Morningstar US Market Index rose 3.6% through the week ending March 23. The latest Federal Reserve statement did not mention the need for further interest rate increases, which many interpreted as setting the ground for rate cuts later this year. Markets also got a boost from a fresh round of takeover activity.
All nine Morningstar style indexes posted strong gains. The Morningstar Small Growth Index's 4.4% advance was the best. The Morningstar Large Core Index finished last with a respectable 3% gain.
Financial stocks recovered strongly as attention was diverted from problems in the subprime lending market. Stalwart Morgan Stanley