After a couple of quiet days, the Dow (^DJI 0.56%) is back to making rampant gains.
The index jumped 0.4% this morning, led by the usual suspects. Construction machinery expert Caterpillar (CAT -0.55%) added eight points to the Dow, while Home Depot (HD 0.74%) contributed seven points. Both of these stocks are still joyriding a wave of enthusiasm that started with Bernanke's QE3 announcement last week. Today's report on solid home-construction starts only helped keep the party going.
Bank of America (BAC 3.35%) saw the Dow's biggest percentage gain with a 1.5% bounce, but the megabank's low share price limited the move's impact on the index to just one measly point. The mortgage-heavy bank enjoyed the same positive housing data that lifted the construction guys, with the added bonus that American consumers are buying existing homes on a level not seen for about two years.
To confirm this housing-powered thesis for today's market moves, look no further than the major homebuilders. To pick one out of the pack, Standard Pacific (NYSE: SPF) soared 4%. That stock has nearly tripled in value over the last year thanks to gradual improvements in the underlying housing markets.
The housing sector still has plenty of room for improvement, but every journey of a thousand miles starts with a single step.
One day of sunshine doesn't necessarily start a trend. Read this free report to find out which three Dow stocks our analysts would recommend to dividend investors today. You can also dig deeper into Bank of America or Caterpillar by checking out our premium reports on those specific stocks. These reports will tell you the ins and outs of each company, and they come with a year of updates.
