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Japan's Bold Stimulus Pushes the Dow Higher

It's another upbeat day in the markets, and the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is humming along. As of 2:20 p.m. EDT the Dow has picked up 43 points, or 0.29%, after hitting yet another intraday high earlier in today's session. Most stocks on the blue-chip index are in the green after big news out of Japan fueled a market jump this morning. Let's catch up on the latest.

Eyes on Japan
Japan pulled the trigger on a massive stimulus plan, unleashing $1.4 trillion worth of quantitative easing as the country looks to push back against the deflation that has plagued its economy for years. Prime minister Shinzo Abe's goal of 2% inflation still looks distant, but the yen plunged after the stimulus was announced -- a good thing for major Japanese multinational corporations looking to get a leg up on international competitors.

The move has certainly helped financial stocks rake in gains today. Bank of America (NYSE: BAC  ) and JPMorgan (NYSE: JPM  ) have pulled in 0.9% and 1.4%, respectively, to rank among today's top Dow stocks. These companies, and the financial sector at large, have done wonderfully in the easy-money climate of the United States since the recession, and Japan's new stimulus vigor should help banking operations in the world's third-largest economy. If the easing works and Japan's economy rights itself after two decades of stagnation, the biggest banks will be poised to profit.

Outside of finance, McDonald's (NYSE: MCD  ) has seen shares rise 1.5% despite reports of trouble in New York City. Several hundred employees of McDonald's and other fast-food restaurants in NYC have gone on strike, demanding better pay and the right to unionize. It's not a move that will shake McDonald's dramatically, but the company doesn't need the headache at this time. Regardless of the stock's surge in 2013, same-store sales fell slightly in February. McDonald's needs its resources focused on improving margins and bringing sales back up to speed, not dealing with striking workers.

Finally, Verizon's (NYSE: VZ  ) shares are up about 0.6% after CEO Lowell McAdam said he would be receptive to a no-contract wireless policy similar to the one T-Mobile introduced last week. T-Mobile's no-contract policy will drop its standard two-year contracts, instead having buyers pay for the entire cost of their phones over monthly installments. While T-Mobile claimed that such a plan would lower the cost for consumers, it's not as big a shake-up as it seems: By paying for the phone over time, buyers are still locked into a form of long-term plan. Still, if this new model can boost profitability, it's worth a shot for Verizon and its rivals.

Is more growth on the way?
Bank of America's stock doubled in 2012. Is there more yet to come? With significant challenges still ahead, it's critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool's premium research report on B of A, analysts Anand Chokkavelu, CFA, and Financials bureau chief Matt Koppenheffer lift the veil on the bank's operations, detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.

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Related Tickers

9/29/2016 11:42 AM
^DJI $18304.11 Down -35.13 -0.19%
MCD $115.89 Up +0.71 +0.62%
McDonald's CAPS Rating: ***
VZ $52.37 Up +0.31 +0.60%
Verizon Communicat… CAPS Rating: ****
BAC $15.44 Up +0.06 +0.36%
Bank of America CAPS Rating: ****
JPM $66.87 Up +0.16 +0.24%
JPMorgan Chase CAPS Rating: ****