Shares of Chattanooga-area publicly owned companies joined in the second-quarter rally of the markets.

“The stock market rally from the March lows has been both powerful and remarkable,” said Ray Ryan, a principal at Patten and Patten in Chattanooga.

Covenant Transportation Group, Dixie Group and CBL & Associates Properties Inc. led the rebound with shares in each company soaring by more than 100 percent in the quarter after having been beaten down in prior months.

Other area stocks recorded double-digit percentage gains in the period.

Paul Fitzgerald, a financial representative of Northwestern Mutual Financial Network in Chattanooga, said he is telling clients to stay fully invested as well as diversified.

“This type of market has never happened, but the market will give rewards to people who are patient and consistent,” he said.

Most of his clients are not giving “a knee-jerk reaction” to the economy, and he said he is seeing “green shoots” coming up.

Mr. Ryan said that supported by stabilization in the credit markets, the stock market is attempting to return to the levels that existed prior to the Lehman bankruptcy in September 2008. That implies significant additional upside potential for equities in the United States, Mr. Ryan said.

But for the rally to prove sustainable, he believes volatility needs to normalize.

“Further, validation of the economic recovery will be derived from definitive improvement in certain indicators such as single family home prices and the unemployment rate,” he said. “Given the enormity of the systemic challenges, we remain cautious, however, of a market test later this year.”

Mr. Ryan said the economy remains buffeted by considerable headwinds.

“This tension will persist for the foreseeable future,” he said. “On balance, however, there is ample justification for a growing sense of optimism.”

The Dow Jones industrial average and the Standard & Poor's 500 index both logged their first quarterly gains since the third quarter of 2007.