This Is the Reason the S&P 500 Took Off Today

If investors were looking for a reason to be optimistic, then perhaps today’s slow rise in jobless claims is the catalyst everyone was looking for. Jobless claims crept higher by just 4,000, to an annualized rate of 367,000, slightly below economists’ forecast of 370,000. Fewer claims could signal that more jobs are being created, which would be a positive for the economy.

Record low mortgage rates of 3.36% are another positive sign for the markets, as the Mortgage Brokers Association signaled that refinancings are at a three-year high this week. Low rates could be the impetus that spurs prospective homebuyers who are waiting on the sidelines to purchase a home.

On the day, the broad-market S&P 500 (INDEX: ^GSPC  ) jumped 10.41 points (0.72%) to 1461.40. Let’s have a look at some of the companies most directly influencing the S&P 500’s movements today.

Coal stocks took to the stage today, with Alpha Natural Resources (NYSE: ANR  ) and CONSOL Energy (NYSE: CNX  ) leading the charge higher. The move follows comments from Republican presidential candidate Mitt Romney, who noted his steadfast support for the coal industry, and burning clean coal. The coal sector has been hammered on the dim prospect of cheap natural gas prices and the emergence of alternative energies, like solar and wind power. The debate is still raging whether coal has a future or if it’s an energy source of the past between my Foolish colleague Travis Hoium and myself, but the jury still hasn’t reach a verdict.

Transportation and supply chain management solutions company Ryder System (NYSE: R  ) shot up 6%, after receiving an analyst upgrade to "buy" from "neutral" by SunTrust, and having its price target set at $48 -- a clean 22% above yesterday’s close. The upgrade makes sense from a valuation perspective, given that Ryder upped its earnings projections in the second-quarter beyond its own previous expectations, and is valued at just over nine times forward earnings. Even with today’s pop, the company may still be a nice value.

There was no true disaster du jour today, but Avery Dennison (NYSE: AVY  ) took the cake as one of the S&P’s weakest performers, following news that 3M has given up on its plans to purchase Avery Dennison’s office and consumer products division. That fact that 3M is backing away from the deal shouldn’t come as a complete shock, as U.S. antitrust regulators had threatened to nix the deal, because it would have given 3M control of about 80% of the U.S. labels and sticky notes market. Instead, 3M agreed to buy Ceradyne earlier this week for $860 million.

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Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool owns shares of Ceradyne. Motley Fool newsletter services have recommended buying shares of, and creating a diagonal call position in 3M. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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