This Is the Reason the S&P 500 Found Its Way Again

If this were a drinking game and the phrase "fiscal cliff" were a trigger, we'd all be drunk by 8 a.m. Luckily for investors, it wasn't just positive talk revolving around fiscal cliff negotiations that sent the markets screaming higher today.

According to data from the National Association of Realtors, record-low interest rates and a rise in homebuilder confidence helped boost new home sales by 2.1% to an annual rate of 4.79 million – an 11% boost over the year-ago period. Although we're still well below what's considered a healthy real estate market, things continue to improve.

All told, today's optimism pushed the broad-based S&P 500 (INDEX: ^GSPC  ) higher by 27.01 points (1.99%) to 1,386.89.

One of the primary reasons today's rally was so strong was the nearly $39 advance in shares of Apple (Nasdaq: AAPL  ) . With analysts obviously torn on Apple's near-term growth prospects -- Merrill Lynch cut its price target and trimmed margin estimates on Apple, while an analyst at Topeka Capital referred to this sell-off as "insane" -- investors were willing to gamble on a company that was trading at less than 10 times forward earnings and has $121 billion in cash. I don't call a bet on Apple much of a gamble and expect any dip under $600 to present buying opportunities for investors.

Meat producer Tyson Foods (NYSE: TSN  ) actually led the charge higher today within the S&P 500, up 11%, after reporting much better-than-expected earnings. For the quarter Tyson earned $0.55 per share versus an expected $0.43, despite the fact that its revenue slightly missed expectations. More importantly, Tyson rewarded shareholders with a 25% boost to its quarterly dividend and plans to pay out a $0.10 per share special dividend. I'd say that's worth clucking about.

On top of better-than-expected growth in housing sales, do-it-yourself home improvement store Lowe's (NYSE: LOW  ) also rose 6% after reporting its third-quarter earnings. A mixture of job cuts, improved efficiency, lower inventory, and consumers' preparation for Superstorm Sandy, helped push same-store sales higher by 1.8% as net income nearly doubled to $0.35 from $0.18 in the year-ago quarter. Keep in mind that Lowe's is still very dependent on appliances to push profits higher so it's still miles behind Home Depot, but this is definitely a step in the right direction.

In the losers column -- and trust me, there weren't many --was insurer Assurant (NYSE: AIZ  ) , which point-and-clicked its way to a nearly 3% loss on a very green day. Assurant is an accident and health insurer that looks poised to be creamed by one-time losses related to Superstorm Sandy. I wouldn't look too far past these one-time losses as they'll give insurers a reasonable excuse to boost premiums and become even more profitable than before, but Assurant was nonetheless the laggard of the day.

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Related Tickers

8/19/2014 4:00 PM
AAPL $100.53 Up +1.37 +1.38%
Apple CAPS Rating: ****
AIZ $65.83 Down -0.35 -0.53%
Assurant CAPS Rating: ****
LOW $51.52 Up +1.07 +2.12%
Lowe's CAPS Rating: ****
TSN $37.56 Up +0.24 +0.64%
Tyson Foods, Inc. CAPS Rating: *****

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