The market's three major indexes were all up slightly on Wednesday, with the Nasdaq leading the way:
| Index | Change | Ending Value |
|---|---|---|
| Dow Jones Industrial Average (INDEX: ^DJI) | +5.75 [+0.04%] | 12,883.95 |
| Nasdaq (INDEX: ^IXIC) | +11.78 [+0.41%] | 2,915.86 |
| S&P 500 (INDEX: ^GSPC) | +2.91 [+0.22%] | 1,349.96 |
For those who need their daily update on the Greece situation, Bloomberg reports word of a draft agreement involving Greece, the European Union, and the International Monetary Fund. As part of the permanent spending cuts, there would be a 20% drop in the minimum wage and lower pension payments. To put that in perspective, if the U.S. took a similar measure, its minimum wage would fall from $7.25 to $5.80.
Looking at the individual Dow components, only one of the 30 stocks rose or fell more 2% or more today: Bank of America (NYSE: BAC) rose 3.6%. Year to date, the financial sector has led all 10 of the S&P 500 sectors (up more than12%). In a rally, the most beaten-down stocks generally pop the most. This has been true for Bank of America, as it has risen 46% after breaking above $8 a share for the first time since September.
Aside from a general rally in the stock market, the large banks,including Bank of America and fellow Dow bank JPMorgan Chase (NYSE: JPM), are nearing a federal and state settlement on a bevy of mortgage and foreclosure-related issues. The settlement could cost B of A, JPMorgan, Wells Fargo, Citigroup, and Ally Financial up to $25 billion. Although the potential sums aren't trivial, the market generally rewards additional certainty. That may be part of what we're seeing in Bank of America's run-up.
As you put the daily news in perspective and hunt for long-term buys, consider reading a free report I wrote called "The Stocks Only the Smartest Investors Are Buying." It details a bank much smaller than Bank of America that has some of the best operational numbers I've ever seen. Read the report and find out its name.
