Marc Pado Comments: Stocks Rally On Bank Hopes, Oil On Inventories

July 8, 2010, Reuters

Global stocks rallied on Wednesday after State Street Corp brightened the outlook for corporate earnings, while oil prices snapped a six-day slide on expectations U.S. crude inventories have fallen.

The bullish earnings forecast by State Street , the world's second-largest custodian bank, lifted banking shares on both sides of the Atlantic and boosted Wall Street about 3 percent.

Shares of State Street jumped 10 percent after it forecast second-quarter operating earnings would climb 29 percent more than analysts' expectations. Banks rebounded from recent heavy losses, driving the KBW bank index <.BKX> up 5.5 percent.

Investors also scooped up industrials and technology stocks that have been beaten down recently, while higher crude prices boosted stocks in the energy sector.

"The reason why yesterday's rally fizzled was because we lacked solid leadership. Today, that is earnings," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co in San Francisco.

"There is some confidence now that there will be more positive surprises than negative during the earnings season."