The Dow Jones Industrial Average (INDEX: ^DJI) rose a solid 46 points, or 0.3%, today. The broader S&P 500 rose 0.2%.
There were two big pieces of news. First, out of Congress, both the House and Senate voted to extend the payroll tax cut, some unemployment benefits, and the "doc fix" preventing Medicare rate cuts to doctors. The payroll tax cut and unemployment benefits are key parts of the Federal fiscal stimulus that have been in place to help prop up the economy during the downturn. There had been some concern than their extension might get held up again by the Republican-controlled House, as it was in December, but ultimately that chamber's majority party decided that it was better to agree to a two-month tax cut extension than risk popular wrath during an election year.
Meanwhile, austerity-minded European leaders are coming closer to agreeing to give Greece the bailout money they already agreed to give it in exchange for the savage deficit-reduction measures its Parliament recently voted to pass.
While failure to extend the payroll tax cut or release the bailout funds could have had tough implications for the economy and financial markets, both events were pretty much expected, so stocks rose only slightly. If either had actually been in significant doubt leading into today, we could have probably seen stronger performance, not just from indexes, but from cyclicals and financials. As it was, JPMorgan Chase (NYSE: JPM) did put up a strong 1.2% gain -- this despite Moody's threatening to downgrade virtually the entire financial system -- but names like Bank of America and Alcoa were actually down for the day.
It was an interesting day for the Dow's top-gainer, Intel (Nasdaq: INTC), which may have to delay the launch its Ivy Bridge processor platform until June. In other news, according to Piper Jaffrey, supply-chain fanatic Apple (Nasdaq: AAPL) may be working on its own chip with help from ARM (Nasdaq: ARMH), whose technology is in use in the chips for most smartphones and tablets. While it could mean lower costs for Apple and more efficiency for its laptops, it's potentially dangerous for Intel, which is currently a major Apple chip supplier and might lose out on a healthy chunk of business if a switch is indeed made.
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