Markets are back in positive territory today on hope that the European Central Bank will soon begin buying government bonds. The Dow Jones Industrial Average (INDEX: ^DJI ) has popped 0.64%, and the S&P 500 (INDEX: ^GSPC ) has risen 0.69% on widespread gains.
ECB president Mario Draghi said he is ready to go to work buying government bonds as soon as the requirements are met. There have been concerns about timing over European bailouts, and at the least we know that the program is ready to go. Domestically, the Department of Labor said that initial jobless claims were 367,000, which was slightly below expectations but not enough to show a significant improvement in the labor market.
Banking stocks have jumped again -- a common theme when Draghi speaks these days. Bank of America (NYSE: BAC ) and JPMorgan (NYSE: JPM ) are up 3% and 2.4%, respectively, leading the Dow higher. The theory is that lower borrowing costs in Europe will reduce risk for the banks and even goose the value of bonds they currently have on the balance sheet, and that's why banking stocks swing wildly on whatever central bankers say.
On the downside, Hewlett-Packard's (NYSE: HPQ ) slide continued today, making it one of only a few Dow stocks in the red. Yesterday, CEO Meg Whitman lowered earnings guidance, and it's now apparent that her turnaround plan will take much longer than expected. We'll get a better idea about the company's challenges when earnings are released.
Tomorrow, markets will turn back to definitive data when unemployment for September is released and earnings season begins next week. But there's another big event investors need to be prepared for.
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