Ralph Kramden of The Honeymooners would be proud today, because the broad-based S&P 500 (SNPINDEX:^GSPC) went "Pow, straight to the moon!"
Today's rally had legs across almost all sectors and was ignited by an early release of the Federal Reserve's minutes, as well as continued strength in the early second-quarter earnings season. In particular, the Fed's minutes demonstrated that a good number of board members are in favor of tapering the bond-buying program later this year but would not do so until the economy was on firm footing. While a few investors would take that as concerning, because it could mean a rise in underlying lending rates, it suggests that the economy is improving enough to the point where the Fed board members can comfortably talk about the possibility of slowing or stopping its MBS and Treasury purchases.
For the day, the S&P 500 ended a whopping 19.12 points (1.22%) to close at a new record high 1,587.73. The move higher was definitely impressive, but not nearly as impressive as the moves in the following three companies despite a lack of primary news.
Memory-chip maker Micron Technology (NASDAQ:MU) was today's biggest gainer, tacking on 5.4% despite no company-specific news. If you recall, Credit Suisse talked about Micron positively just a few weeks ago, following a second-quarter revenue beat. The fact that Micron's manufacturing costs are forecast to drop while its margins expand is providing more than enough impetus to send the share price higher. Keep in mind, though, that Micron is the type of company you buy when sentiment couldn't get any worse, and you sell when all fear appears to be gone. It appears we're much closer to a top than many might think.
For-profit education company Apollo Group (NASDAQ:APOL) also advanced 4.9% without any primary news. The thought process for investors here -- other than piling into a company that tends to be more volatile than the S&P 500 on a very big up day -- is that an improving economy should encourage people who've previously given up on finding employment to attempt to retrain themselves through online education. I, on the other hand, still think much of the sector will continue to see declining enrollments and fewer subsidies from the U.S. government, which makes Apollo an extremely risky bet.
Finally, fiber-optic components maker JDS Uniphase (NASDAQ:VIAV) vaulted higher by 4.8%. Investors have been particularly supportive of the fiber-optic sector of late, as demand from China, as well as infrastructure upgrades from domestic service providers, portends growth that should continue throughout much of 2013. JDS is unquestionably a cyclical company, but it appears ripe for further appreciation based on the optimistic forecasts of its peers.