These 3 Financial Stocks Sent the Dow Soaring

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

The game of chicken between investors and a potential federal debt default continued this morning, with optimists winning the battle in the early going. The Dow Jones Industrials (DJINDICES: ^DJI  ) quickly jumped to triple-digit gains and traded higher by 183 points as of 10:50 a.m. EDT. Three financial stocks topped the list of the average's gainers. Veteran Dow component JPMorgan Chase (NYSE: JPM  ) led all stocks with a nearly 3% gain. But new entrants Goldman Sachs (NYSE: GS  ) and Visa (NYSE: V  ) also posted sharp gains, respectively rising 2.5% and 1.8% and suggesting a common thread within the industry.

For JPMorgan, one news-related catalyst partly explained the gains. The bank will pay $100 million to the Commodity Futures Trading Commission to settle allegations about derivatives trades connected with the London Whale incident. That pushes the total regulatory hit to JPMorgan from the debacle above the $1 billion mark, with the bank previously agreeing to pay a total of $920 million to other regulatory bodies. Once again, though, investors seem content to pay large settlements to resolve the bank's legal issues.

Goldman's advance doesn't make nearly as much sense. As Fool contributor Alex Dumortier observed this morning, early results from its peers have shown a big drop in revenue from core areas of traditional Goldman strength, especially the fixed-income trading segment. Bank of America became the latest member of the Wall Street contingent to report weak results at its trading desk, yet investors appear to think Goldman can somehow escape those headwinds and once again surprise on the upside.

Visa's gains also make little sense in light of economists' concerns about the impact of the government shutdown. Visa relies on transaction volume that is governed largely by consumer spending, and economists have started to tie the ongoing series of political battles to a permanent reduction in job growth that could hurt the consumer-led economy. Visa won't be the only company to bear the brunt of a loss of consumer confidence, but it would definitely see a substantial impact that could cause it to pull back from its recent highs.

Will JPMorgan stay strong?
JPMorgan, Goldman, and Bank of America have all seen huge gains in recent years. But are they still good values for investors considering getting into the bank sector now? Bargains of a lifetime are still available in banking, but you need to know where to look. The Motley Fool's new report "Finding the Next Bank Stock Home Run" will show you how and where to find these deals. It's completely free -- click here to get started.

Read/Post Comments (0) | Recommend This Article (0)

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.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

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: 2685677, ~/Articles/ArticleHandler.aspx, 9/30/2016 6:00:23 PM

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...

Today's Market

updated Moments ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 5:01 PM
^DJI $18308.15 Up +164.70 +0.91%
GS $161.27 Up +2.32 +1.46%
Goldman Sachs CAPS Rating: ***
JPM $66.59 Up +0.94 +1.43%
JPMorgan Chase CAPS Rating: ****
V $82.70 Up +0.78 +0.95%
Visa CAPS Rating: *****