Investors who had been counting on a summer stock market correction to grab up shares of promising companies on the cheap got a nasty wake-up call from Federal Reserve Chairman Ben Bernanke last night, with his comments supporting the continued "highly accommodative monetary policy" stoking the fire of bullishness once more. By today's close, the Dow Jones Industrial Average (DJINDICES: ^DJI ) found itself at a new record-high close of 15,461, having climbed 169 points. The S&P 500 (SNPINDEX: ^GSPC ) joined the fun with a new all-time high of its own, rising 22, to 1,675, while the Nasdaq had to be content with a 13-year high of 3,578, up more than 57 points on the day.
The Bernanke-inspired rally lifted all 30 of the Dow's stocks, but a few of them had limited gains of less than half a percent. IBM (NYSE: IBM ) was the biggest laggard, rising just a quarter-percent. The tech giant likely didn't suffer any ill effects from yesterday's announcement that PC demand had continued to slide during the first quarter, as it has transitioned away from hardware production toward higher-margin businesses like IT services. Yet, comments from UBS suggest that IBM could be vulnerable if macroeconomic conditions don't pick up worldwide in the near future, especially given the recent hit to emerging markets. Still, IBM's strong pursuit of high-reward areas, like cloud computing and Big Data, should help the company make the best of whatever conditions it faces, even if a recovery in global growth doesn't happen as quickly as some hope.
ExxonMobil (NYSE: XOM ) climbed 0.4%, as oil prices fell back from their recent high levels. Even with expectations of higher gasoline prices coming for U.S. consumers, potential pain at the pump hasn't brought on the usual chorus of doomsayers arguing that the economic recovery will be at risk as a result. That might be because domestic energy production has become an important part of the U.S. economy in its own right, but longer term, the biggest challenge for the oil giant is continuing to find economically viable drilling prospects to tap in order to maintain and grow production levels.
Finally, Johnson & Johnson (NYSE: JNJ ) picked up just under half a percent. Despite having filed a New Drug Application, along with its partner Pharmacyclics, for its ibrutinib treatment for leukemia and lymphoma, J&J is already at all-time highs, and traditionally tends to lag behind the best performers in bull markets. Defensive investors might be comfortable with the stock even at its fairly hefty valuation, but for future growth, other stocks have more potential.
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