Hopes of More Stimulus Push the Dow Higher Today

After a disappointing day on Monday despite the pro-bailout party victory in the Greek elections, the Dow Jones Industrial Average (INDEX: ^DJI  ) redeemed itself today, rising nearly 100 points on optimism ahead of a stimulus decision from the Federal Reserve due tomorrow. Investors are hopeful that the Fed will announce additional measures this week to rejuvenate the domestic economy.

The rally occurred despite continuing uncertainty in Europe, as yields on Spanish short-term bonds surged while the country continues to struggle to find buyers for its debt. Yields on Spanish benchmark 10-year bonds remained at unsustainably high levels, near 7%. But today was all about investor optimism in some kind of action from the Fed, which was the main factor in driving markets up.

Here's how all three major U.S. indices fared on the day:

Index

Change

Ending Value

Dow Jones Industrial Average 95.51 [0.75%] 12,837.33
Nasdaq (INDEX: ^IXIC  ) 34.43 [1.19%] 2,929.76
S&P 500 13.20 [0.98%] 1,357.98

By far today's biggest winner on the day was Bank of America (NYSE: BAC  ) , which surged 4.5% on news that the Federal Housing Finance Agency will step in to help banks decrease their mortgage buybacks. The government is concerned that forcing banks to buy back bad mortgages is having the effect of tightening credit standards for potential homebuyers. JPMorgan Chase joined the broad bank rally as well, rising 2.2%, helped up also by the talk of further Fed stimulus this week.

On the other side of the coin, Hewlett-Packard (NYSE: HPQ  ) was the Dow's biggest loser today, dropping 1.1%. Microsoft (Nasdaq: MSFT  ) introduced the first computer it's ever made last night at an event in Hollywood. CEO Steve Ballmer showed off a sleek-looking tablet, named the Surface, that comes with a keyboard built into the tablet's cover. The Windows 8-equipped device, which will probably be released sometime in the second half of the year, will be positioned to compete head-on with Apple's market-dominating iPad. But for HP investors, Microsoft's decision to make the device itself is worrisome, considering HP is relying heavily on Windows 8 devices. What company might HP now find as its biggest competition in that field? That's right -- Microsoft.

Many investors look to the Dow for companies with strong dividends and highly sustainable competitive advantages built for the long haul. We've taken an in-depth look at all 30 Dow components and picked out our three favorite dividend Dow stocks that investors can buy right now. You can find the names and analysis of these companies in our brand new free report, "The 3 Dow Stocks Dividend Investors Need." Read the report now -- it's absolutely free.

Brendan Byrnes owns shares of Apple. The Motley Fool owns shares of Microsoft, Apple, Bank of America, and JPMorgan Chase. Motley Fool newsletter services have recommended buying shares of Microsoft and Apple. Motley Fool newsletter services have recommended creating bull call spread positions in Microsoft and Apple. 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 (11)

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: 1917969, ~/Articles/ArticleHandler.aspx, 10/24/2014 5:19:22 PM

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