It was a good day for the Dow (INDEX: ^DJI), which rose 0.78% to 12,578.95. But it was a great day for two of its component stocks.
Bank of America (NYSE: BAC) and JPMorgan Chase (NYSE: JPM) led the 30 Dow stocks today with gains of 4.9% and 4.7%.
Why did these two banks blast off?
Most of the good feelings can be attributed to Goldman Sachs' (NYSE: GS) earnings report today. Though the fourth-quarter earnings for the premier pure-play Wall Street bank were less than half 2010's, they smashed analysts' lowered guidance.
Goldman was up 6.8%, boosting not only Bank of America and JPMorgan Chase but also fellow Wall Streeters Morgan Stanley (NYSE: MS) (up 6.8% as well) and Citigroup (up 2.9%).
In addition to the Goldman news, the International Monetary Fund announced that it's looking to increase its dry powder by half a trillion dollars to help countries with sovereign-debt problems (read: Europe). Good news for Europe means good news for these large American banks -- both because of their direct investments and because of the possible indirect effects from the interdependency of credit markets.
Meanwhile, Bank of America and Morgan Stanley are set to complete the big-bank earnings season by reporting at 7:00 a.m. tomorrow. As with every earnings report, a lot will depend on expectations (rather than the absolute results). Goldman's huge bump today is testament to that.
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