Why the Dow Spiked Today

Step aside, market pessimists. Maybe your moment in the spotlight isn't quite here after all.

U.S. stock markets jumped sharply today after the president of the New York Fed commented that low interest rates are here to stay. Not that this is exactly new news, but it fueled one of the best single-day performances for the Dow Jones Industrial Average (INDEX: ^DJI  ) in nearly a month. The Fed's comments, coupled with investor optimism looking to Chinese GDP figures due out tomorrow, were enough to get investors to forget this week's ugly start.

On the day, the Dow rose 1.4%. Similarly, the Nasdaq and S&P 500 shot sharply upward, gaining 1.3% and 1.4%, respectively. The market's oft-cited "fear gauge" of the VIX (INDEX: ^VIX  ) also calmed today, falling 14.1% on a week that has seen the index both spike sharply and fall precipitously.

Around the market
On an up day in the market, several high-profile companies beat the market by a wide margin. Personal-computer leader Hewlett-Packard surged 7% on better-than-expected PC sales figures. This is an unexpected bright moment for a company that's been suffering from a litany of problems, including no compelling product offering in the increasingly important mobile sphere and a veritable revolving door in its C-suite.

The bullishness surrounding Chinese growth figures shot several Chinese growth stocks substantially higher today as well. Shares of Baidu (Nasdaq: BIDU  ) , Renren (NYSE: RENN  ) , and Sohu (Nasdaq: SOHU  ) all jumped in a big way today, rising 3.5%, 11.2%, and 3.8% higher. The year thus far has been somewhat of a mixed bag for these growth stories. Year to date, Renren's nearly doubled, Baidu's returned in excess of 20%, and Sohu's risen only a modest 5.7%. Look to tomorrow's figures to weigh heavily on these stocks, similar to today.

Both the broad market and plenty of individual stocks have been on a roller-coaster ride over the past week, which is exactly why investors need to always stay informed about their favorite stocks. However, investors also need to recognize that daily movements won't make or break a lifetime of saving. Instead, they need to focus on their long-term saving goals. Luckily, the Fool's identified three stocks it thinks have all the makings of long-term winners. Better yet, we made our research report detailing each one of them absolutely free to our readers, so access your free copy today.

Andrew Tonner held no financial position in any of the companies mentioned in this article at the time of publishing. You can follow Andrew and all of his Foolish writing on Twitter at @AndrewTonner. Motley Fool newsletter services have recommended buying shares of Baidu and Sohu.com. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (0) | Recommend This Article (18)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1861070, ~/Articles/ArticleHandler.aspx, 12/21/2014 9:34:17 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement