Investors followed the axiom to buy on the news Monday after selling last week on the rumors.
Stocks rose strongly as developments that have raised investors' anxieties in recent weeks converged.
Russia devalued its currency. President Clinton testified to a grand jury about the extent of his relationship with Monica Lewinsky. The Federal Open Market Committee prepared to meet today to decide whether to change short-term interest rates.
And in response, the Dow Jones industrial average rose 149.85 points, or 1.78%, and the Standard & Poor's bank index rose 2.26%.
Analysts attributed Monday's rally to investors returning to the market after shedding stocks for several weeks on concerns that overseas economies were teetering and that President Clinton's testimony might hurt his presidency.
Investors apparently disregarded President Clinton's session with the grand jury, which was still under way as the market closed.
Meanwhile, the prevailing view was that the Fed, amid conflicting signals about the strength of the economy, would once again take no action. Its last interest rate change was to raise the federal funds rate by 25 basis points to 5.5% in March 1997.
The Russian government's drastic b the Russian government took drastic, but not unexpected, steps to salvage its faltering economy. The government said it would let the ruble fall in value by as much as one-third this year and would suspend payments for debt owed by Russian commercial banks. (See related article on page 1.)
That the news from Russia failed to hurt the market shows that the country's political importance towers over its economic significance, some analysts said.
"Russia is a big nuclear power, but its economy is relatively small," said Rosanne M. Cahn, chief economist at Credit Suisse First Boston. The Moscow Stock Exchange General Index, which is made up of the 100 largest publicly traded Russian companies, has a total market capitalization of $31 billion-making it $1 billion smaller than Banc One Corp.
As a result, investors in big U.S. banks such as Citicorp and J.P. Morgan & Co., which do significant business in Russia, shrugged off news of the falling ruble. Citicorp rose $4.75, to $143.75, and J.P. Morgan rose 31.25 cents, to $127.1875.
Analysts, meanwhile, were sifting through the wreckage from the past month's selloff and are polishing off reports recommending companies best situated to recover.
Nancy Bush, bank analyst at Ryan, Beck & Co., issued a report on Fleet Financial Group, praising the Boston banking company for having created an institution that sports several ways to make money.
"It is our conviction that these deals have given this company and its management a new lease on life, and leads to our first recommendation of this company in some years," wrote Ms. Bush, who upgraded Fleet shares Monday to "strong buy," from "hold," and called the company one of banking's "safest" stocks.
Fleet rose 87.5 cents, to $76.1875.
Such praise is a far cry from only a year or two ago, when Fleet ranked among the most beaten-up bank stocks.
Fleet earnings suffered in 1996 and 1997 after the company acquired Shawmut National Corp. and National Westminster PLC's U.S. banks in rapid succession.
The growing pains caused many to believe that Fleet chief executive Terrence Murray would have to sell the bank.
As recently as late April Fleet stock jumped to $90 per share, fueled in part by rumors that Mr. Murray was about to sell his company, possibly to First Union Corp.
But instead of selling the company has continued buying nonbank business, such as asset management firms and credit card portfolios, a track it started in 1997.
Analysts now attribute those acquisitions to Fleet's strong second- quarter earnings, which at $1.29 per share topped consensus estimates of $1.27.
"The benefits of the acquisitions of Columbia Management Co., Quick & Reilly, and the Advanta credit card portfolio showed in the results," wrote Prudential Securities analyst Joel Silverstein.
Not only has the company produced higher-than-expected earnings, but it is generating the kinds of profits Wall Street likes to see. 48% of the company's second quarter revenues were derived from fees rather than the traditional, interest rate-sensitive spread business that hurt New England banks so badly only a few years ago.
Analysts expect Fleet's renaissance will continue. Mr. Silverstein, who rates the stock-and the entire banking industry-as "accumulate," recently raised his earnings estimates by 5 cents per share for this year and next.