What Caused Today's 100-Point Rally

It's about time. On Monda,y the Dow Jones Industrial Average (DJINDICES: ^DJI  ) enjoyed a rare triple-digit rally, feeding off confidence that's been largely absent in the tenuous political environment leading up to the New Year. While ominous headlines about the fiscal cliff have dominated media coverage for weeks, today some hope was restored that a deal can be reached soon. House Speaker John Boehner reportedly conceded on an important point, bringing the White House and Congress closer to an ultimate agreement.

The concession? Rep. Boehner said Republicans would consider a tax increase on households with over $1 million in annual income. It's not groundbreaking by any means, but it's an instrumental baby step, and it was enough to boost the Dow by 100 points, or 0.76%, to close at 13,235.

Bank of America (NYSE: BAC  ) was far and away the biggest winner in the index today, surging by 4%. Shares are continuing an amazing run which has seen them nearly double thus far in 2012. Today's rise was part of a strong financial rally, as news broke that more U.S. banks are retaining the mortgages they originate, rather than bundling them up and reselling them. This speaks volumes for the increased confidence banks have in borrower quality, and therefore the housing market in general. That's good news for the U.S. economy.

Cisco Systems (NASDAQ: CSCO  ) was another Dow standout today, rising 1.3%. It appears investors are putting their money behind the tech giant's new marketing campaign, which attempts to rebrand Cisco as an innovator and groundbreaker, rather than a has-been relic of the '90s dot-com bubble.

Alas, not everything was all roses, and Hewlett-Packard (NYSE: HPQ  ) was the Dow's best example, tumbling 3.7%. It's nothing new for HP investors, who've seen the stock crater by more than 40% on the year. The catalyst today was new analysis from Deutsche Bank claiming activist investor Carl Icahn's planned breakup of HP would be a bum deal for company shareholders. 

3D Systems (NYSE: DDD  ) , one of the few companies at the forefront of what very well may be a paradigm shift in manufacturing to 3-D printing technology, shot up 5.4% today. Of course, that's just a taste of the company's incredible 235% year-to-date returns. Who knows what kind of potential this industrial maverick has in store for 2013, but it's safe to say the stock is one to continue to watch.

To learn more about the most-talked-about bank out there, check out our in-depth company report on Bank of America. The report details Bank of America's prospects, including three reasons to buy and three reasons to sell. Just click here to get access.


Read/Post Comments (2) | Recommend This Article (12)

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.

  • Report this Comment On December 17, 2012, at 11:12 PM, Ryan2799 wrote:

    Believe it or not... you did not capture what rallied the market today... It was David Tepper speaking on CNBC.

    Listen to what he said... look at the futures. Without him before the open the market would have ended flat. It would have spiked with the President/Boehner news but would have sold off toward the close.

    There truly are there hedge fund portfolio managers who the street respects... a lot of short covering because of what he stated. you missed it on this article.

  • Report this Comment On December 18, 2012, at 4:47 PM, XMFDivine wrote:

    Thanks Ryan, I'll look into that. Thanks for keeping me on point, apologies if I missed that catalyst.

Add your comment.

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: 2158487, ~/Articles/ArticleHandler.aspx, 10/22/2014 12:54:36 AM

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