Stocks Have Strong Start to the Second Quarter

Stocks started off the second quarter strongly, with all the major averages posting solid gains. The Dow finished up 153 points, or 2%, to 7762; the Nasdaq added 23 points, or 1.5%, to 1552; the S&P 500 added 13 points, or 1.7%, to 811.

Investors are hoping the second quarter is better than the first, which saw stocks drop 11% as represented by the broadly-represented S&P 500. While the entire quarter was weak, March saw the S&P 500 rise nearly 9%.

Better-than-expected pending home sales is another feather in the cap of those looking for a bottom. As we've noted before, a number of "green shoots" have been springing up lately as the economy attempts to regain some footing after hitting a brick-wall in Sept-Oct of last year.

Earnings season will kick off shortly, which will give a picture of how corporate profits stacked up in the first quarter. Expectations are low, so upside surprises could be seen. Of course, if results come in weaker than the low-expectations look out below!

Tomorrow, the Financial Accounting Standards Board, or FASB, will vote on loosening mark-to-market standards for banks. If approved, banks will have more flexibility to set their own values for certain mortgages, corporate loans and consumer loans that are plaguing their balance sheets. The new values will likely be much higher than the 'market' value. News from the vote is sure to create volatility in the bank stocks like Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), Bank of America (NYSE: BAC), JP Morgan (NYSE: JPM), Citigroup (NYSE: C) and Wells Fargo (NYSE: WFC), or more broadly the ETF Financial Select Sector SPDR (NYSE: XLF).

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