It was a relatively peaceful day in the markets, as all three major indices stayed in positive territory thanks to good news emanating from Washington.
Word got out last night that House Republicans were willing to agree to an extension of the payroll-tax cut and unemployment benefits after the legislation received bipartisan support when passing the Senate. Subsequent to some legislative wrangling, President Obama was able to sign the extension this afternoon.
Investors should expect more drama surrounding the issue, since a full-year extension will need to be agreed upon before March. But for now, everyone can relax through the holiday season knowing that their paycheck won't suddenly get lighter come Jan. 1.
In response to actual deal-making getting done in Washington combined with generally good news on America's economic prospects next year, the Dow Jones Industrial Average (INDEX: ^DJI) rose 0.71%, the Nasdaq (INDEX: ^IXIC) gained 0.52%, and the S&P 500 (INDEX: ^GSPC) closed up 0.62%. In fact, the S&P's near 8-point move tipped the index into positive territory for the year. Gold dropped 3.5 points to $1,607, but the SPDR Gold Shares ETF gained $0.03. And although today wasn't tumultuous, the positive move helped holders of the ETF Direxion Daily Financial Bull 3X (NYSE: FAS), who were rewarded with a 1.1% gain.
Inside the Dow, the gainers appeared across all industries, with the top two performers, Bank of America and Disney, gaining 2.1% and 1.8%, respectively. On the Nasdaq, we had a herd of rams leading the way. Ram Energy Resources (Nasdaq: RAM) has been an virtual overnight double after tacking on an additional 22% to yesterday's 83% gain. The sudden enthusiasm comes from a $550 million investment into the company by an industry veteran and the lucrative sale of Mississippian oil and natural gas acres by its neighbor in the play SandRidge Energy (Nasdaq: SD). The other member of the flock, Rambus (Nasdaq: RMBS), followed up with a 13% jump after entering into a five-year licensing agreement with Broadcom. The two companies also settled some outstanding patent issues between them.
In all, today's solid market performance means investors can relax and have a wonderful holiday weekend.
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