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:
|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.
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