Wells Fargo created big gains for bank stocks and spurred market buying, especially in some of the riskier companies trading publicly.  At one point this afternoon the Dow was up 234 points and over the 8000 mark. Wells Fargo shares jumped almost 30% after the bank said it expects to report record net income of approximately $3 billion, or 55 cents a share, for the first quarter. The company said it’s seeing strong operating results from its acquisition of  Wachovia  At this point it appears that the weaker companies are being thinned out and the stronger ones beginning to surge.  

The New York Times also released  a report that some 19 banks undergoing government stress tests will pass. Citigroup shares alone rose by 10%.  Money managers who recently purchased stock in Wells Fargo and Citigroup are quite happy they did. Also a strong rally in retail stocks helped push the broader stock markets to gains on Wednesday, but with many chains reporting disappointing March sales have put pressure on that sector. Disappointing results from Wal Mart were a worrisome signal for the broader economy. With people already cutting back on spending because of the economy at higher end shops like Tiffany so are now the lower end spenders at places like Wal Mart. Regardless, there’s growing evidence that the economy is beginning to turn for the better. Inventories for one have fallen by the largest increment on record which is another bit of good news.

Looks like the tide is turning.