The Dow Jones Industrial Average (DJINDICES:^DJI) is up today on positive economic data in Europe and encouraging comments from Federal Reserve officials. As of 1:10 p.m. EST the Dow is up 103 points, or 0.74%, to 13,983. The S&P 500 (SNPINDEX:^GSPC) is up 0.65% to 1,512 points.
There were no U.S. economic releases today. Markets were up in Europe as the Ifo Institute reported that its German business-climate index rose to 107.4, beating analyst expectations of 104.7.
The index is based on a monthly survey of German firms in manufacturing, construction, wholesaling, and retailing.
While U.S. economic data has been fairly positive this week, the Dow was down over the past two days after minutes released from January's Federal Reserve open market committee meeting showed that members are worried about the level of asset purchases the Fed is making. The Federal Reserve is currently buying $85 billion of assets each month in an effort to spur the economy. Investors are worried the Fed will slow asset purchases when it meets again in March.
Today, two senior Federal Reserve officials commented at a conference on Federal Reserve policy in Chicago. Both officials' comments suggest that the Federal Reserve will not stop asset purchases in March. Boston Federal Reserve President Eric Rosengren said, "The LSAP [Large Scale Asset Purchases] program improves the broader fiscal outlook by lowering interest rates and providing more economic growth."
Today's Dow leader
Today's Dow leader is Hewlett-Packard (NYSE:HPQ), up 12.7% to $19.15. HP had an awful 2012, down 47% following two writedowns of relatively recent acquisitions for a collective $16 billion loss. After such a bad year, expectations for the company are very low. HP reported earnings yesterday after the market close that crushed expectations. Earnings per share were down 11% year over year to $0.82, though that's far above analyst expectations of $0.71 per share. Revenue was down 6% year over year to $28.4 billion, beating expectations of $27.8 billion. The news sent HP up after hours, and the stock continued its rise today.
HP is also benefiting from a ratings upgrade by UBS from "sell" to "neutral," which was accompanied by a raising of the price target from $12 to $19. The analyst commented, "Although a number of businesses remain under pressure, the company's blocking and tackling is improving, and the likelihood of the bottom falling out appears diminished."