Investors see recovery a year after Wall Street carnage

       US stocks are poised to repeat their advance this week as investors bet that the economic recovery is gaining strength and company outlooks are turning rosier.
       Despite the upcoming anniversary of Lehman Brothers' collapse and the tumult that subsequently rocked Wall Street a year ago, the mood in the market is likely to be more optimistic than gloomy.
       A year ago, it seemed as if the financial world was coming to an end when Lehman filed for bankruptcy on Sept 15,setting off a scramble by authorities to avert global financial meltdown.
       But fast-forward to September 2009,US stocks are at fresh 12-month highs,and if this week's economic reports show that the recession continues to abate,US stocks should extend their run-up.
       "The market is still in the process of pricing in an economic recovery," said Sean Clark, chief investment officer at Clark Capital Management in Philadelphia."We think we're going to see 3.0%economic growth in the second half of this year. As we look out into the future,I think third-quarter earnings are going to be better than expected and, based on improving economic conditions, we'll start seeing top-line growth."
       Indeed, in recent days there have been increasing signs that corporate profits are improving after FedEx and Procter & Gamble joined other bellwethers in giving upbeat outlooks this past week.
       There could yet be more companies in the coming week that offer welcome news in their outlooks.
       "The earnings pre-announcements are going to be important because to sustain any move beyond where we are,we have to have pretty decent earnings growth in 2010," said Gail Dudack, chief investment strategist at Dudack Research Group in New York.
       On the economic front, August retail sales, due tomorrow, along with the Producer Price Index and July business inventories, will command attention.
       A Reuters poll of economists expects retail sales to show a gain of 2.0% after a drop of 0.1% in July. Excluding automobiles, the sales are projected to be up 0.4%, compared with a dip of 0.6% in the prior month.
       "You will get a boost to retail sales from the autos side, but we will be looking at the underlying trend of sales without autos," said John Praveen, chief investment strategist at Prudential International Investments Advisers in Newark, New Jersey."If there's any improvement, that should give a gauge of recovery in consumer spending."
       Data on the Consumer Price Index and industrial production in August are due on Wednesday. Releases on August housing starts, a weekly report on initial jobless claims and a survey of factory activity in the US mid-Atlantic region are scheduled on Thursday.
       The data will be studied for evidence that the economic recovery is gaining traction. Hopes for a rebound have helped the benchmark S&P 500 index rally 54% since hitting a 12-month closing low on March 9. Stellar sectors in that rally have included transport, industrials,materials and technology.
       Last week, the Dow Jones Industrial Average climbed 1.74% to close on Friday at 9,605.41, after touching an 11-month high earlier in the week. The Nasdaq rallied 3.08% to 2,080.90 and the broad-market Standard & Poor's 500 index jumped 2.59% to 1,042.73.
       Despite the latest rebound, the main indices are still well below their historic highs. The Dow is 32% below its alltime high of October 2007 of 14,164.53 and the S&P 500 is 33% short of its record of the same day of 1,565.15. The Nasdaq remains at less than half the level of the tech-bubble high of 5,048.62.
       President Barack Obama is scheduled to speak in New York today on financial reforms and the need to strengthen the system to avoid another collapse. Federal Reserve Chairman Ben Bernanke will talk about "Reflections on a Year of Crisis"tomorrow.