Optimism returned in a big way today. Fueled by a perceived growing likelihood of policy action by both European and American officials, the Dow Jones Industrial Average
Mario Draghi, the president of the European Central Bank, hinted at a growing appetite among European monetary officials for increased stimulus to aid surging interest rates in flailing economies such as those in Spain and Italy. Likewise, Federal Reserve Board Chairman Ben Bernanke will testify tomorrow regarding the state of the U.S. economy. Investors have seen hints within the Fed that officials are increasingly favoring the idea of providing the U.S. with additional monetary stimulus as well.
Around the markets
Cyclical stocks reacted strongly to the news. Market pinata Bank of America
What it all means
Investors should take rallies like today's with a serious grain of salt. Although seeing gains across your holdings, remembering that today's rumors remain far from certain will serve investors well in the end. Without firm commitments from officials, the risks that dragged the markets into negative territory on the year remain alarmingly real. At times like this, investors should be making a shopping list of companies they'll want to purchase should markets continue to pull back. The Fool has its own list of three stocks it thinks have the makings of long-term winners, and they're detailed in our recent research report. To find out which companies we think are great bets to stand the test of time, access your report today.
Andrew Tonner held no financial position in any of the companies mentioned in this article. You can follow Andrew and all his writing on Twitter at @AndrewTonner. The Motley Fool owns shares of Bank of America and has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.