Dow Bounces Back From Yellen's Comments on Hopes for Summer Thaw; JPMorgan, AT&T Jump

After a big drop Wednesday on concerns about interest rates, the Dow clawed back some gain Thursday morning as positive signs of economic growth emerged.

Mar 20, 2014 at 11:00AM

As of 11 a.m. EDT Thursday  the Dow Jones Industrials (DJINDICES:^DJI) had regained 45 of the points lost yesterday in the wake of Federal Reserve Chairwoman Janet Yellen's surprising comments about possible future interest rate policy. Even as markets struggled to digest the idea that interest rates could rise as soon as mid-2015, positive economic news from the Conference Board's Leading Economic Index showed early signs of growth, and weekly jobless claims rose less than initially expected. JPMorgan Chase (NYSE:JPM) and AT&T (NYSE:T) were the biggest gainers in the Dow.

Where the economy's headed
The Conference Board reported that its Leading Economic Index rose 0.5% in February, with the implication that economic growth should return in full force by the second half of 2014. Five of the 10 indicators that the Conference Board looks at rose during the month, with the spreads between short-term rates and 10-year Treasury yields contributing the most to furthering future economic growth. But strength in building permits also provided substantial lift to the index, as did the Conference Board's Leading Credit Index, which is designed to be an indicator of financial market activity.

Yet some factors pushed the index down. Average workweek figures were somewhat disappointing, and consumer expectations for business conditions were moderately weaker as well. Moreover, with the stock market's tepid performance so far in 2014, stocks didn't provide the boost that they did during 2013.

In part because of this economic optimism, strong performance from several corners of the Dow helped push the average up this morning. Indications of stronger activity in the financial arena led JPMorgan up 2.3% toward a new yearly high, and the sale of its physical commodities business should provide more capital for its upcoming stress tests and the ability to focus more on its core business. Similarly, AT&T, up 2.4%, is in a position to deliver solid dividend income in an environment where investors are becoming less comfortable with prospects for stock markets generally, especially given the big gains experienced over the past five years.

As long as the economy recovers from its winter blues, select stocks have room to run higher. But as the bull market ages, you can expect investors to get pickier about which stocks will make the cut.

Investors are simply realizing that there's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Dan Caplinger owns warrants on JPMorgan Chase. The Motley Fool owns shares of JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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