Barring any sudden movement, the Dow Jones Industrial Average (INDEX: ^DJI ) is primed to close out the week on a four-day rally, erasing last Friday's fire sale. The markets opened the day in the red after Fitch Ratings cut Spain's credit by three notches to BBB. However, the broad markets recovered after President Obama addressed the world's economic woes and stated that the eurozone needs to take substantial steps to inject capital into banks and decide on a comprehensive plan to deal with its fiscal issues.
Gain/ Loss %
|Dow Jones Industrials||76.93||0.63%|
|VIX (Volatility Index)||(0.13)||(0.60%)|
|10-Year Treasury Note||(0.017)||(1.03%)|
Source: Yahoo! Finance.
However, as you can see in the chart above, the markets are not expecting a smooth road ahead, as investors fled into the safety of 10-year Treasuries. June crude oil futures also lowered on the prospect of shrinking economic growth both in Europe and Asia.
Wal-Mart (NYSE: WMT ) is the king of all the Dow components today, up 3.24% as the retailer continues its rally after recording a stellar first quarter. In fact, Wal-Mart's share price is the highest it has been since 1999, recovering nicely after suffering April's embarrassing bribery charges in Mexico.
Outside of the Dow, Carl Icahn has set his sights on Navistar International (NYSE: NAV ) after winning his first battle at Chesapeake Energy (NYSE: CHK ) by selling the latter's midstream assets for $4 billion to Global Infrastructure Partners. Icahn increased his share of the commercial truck manufacturer to 12% as Navistar shares skyrocketed on the news, with shares appreciating over 16% on the day.
With more worries of slowing growth around the world, basic materials is the worst-performing sector today, with United States Steel (NYSE: X ) down 4%.
The good news is the Dow Jones Industrials are performing well again, making it four straight days in the green. We must be aware that Europe is still in a perilous state, and in order to stabilize the market for a long bull run, the central banks will need to heed Obama's message and infuse capital into the banking systems. The problems are complex and the treatment is supplied in small doses, so expect some turbulence on the way. With increased instability expected in the market, now is a great time to check out the Motley Fool's special report describing three stocks that will help you retire rich. This free report lists three remarkable companies and offers great advice on how to invest to secure a comfortable retirement. Get your free report now.