The Dow Jones Industrial Average (DJINDICES:^DJI) is having a field day, with 23 of its 30 components making gains. Bank of America (NYSE:BAC) is leading the pack following some bullish comments on financials by David Tepper, a famous hedge-fund manager. As of 1:25 p.m. EDT the Dow is up 89 points, or 0.59%, to 15,181. The S&P 500 (SNPINDEX:^GSPC) was up 0.87% to 1,648.
There was just one U.S. economic release today. The National Federation of Independent Businesses reported that its small-business index rose 2.6 points to 92.1. The gain owed to a large shift in the percentage of small-business owners who expect the economy to improve, as well as gains among those who expect a rise in real sales and employment. The shift in sentiment is helping the Dow continue its slow, steady rise. The Dow is up 16% this year and 19% over the past year.
The other news item spurring the Dow today is the bullish sentiment expressed by Appaloosa Management founder David Tepper. Tepper, who has been one of the most successful hedge-fund managers of the past few years, said in an interview with CNBC that Citigroup is his largest holding and that he also owns shares of JPMorgan Chase and Bank of America (NYSE:BAC). He's also bullish on the market as a whole, saying, "Every place is the place to be in stock markets around the world."
It should be noted that "bullish" means different things to different managers. Some investors run concentrated portfolios, and when they say they are bullish on a position, it can make up a large percentage of their portfolio. Tepper prizes liquidity and the ability to get out of positions quickly. He generally maxes out his positions at 2% of his portfolio. As of Appaloosa's last filing, which was in February, it reported 58 equity positions, with the largest being Apple.
That said, there's a lot to like about financials -- particularly Bank of America, which is today's Dow leader, up 2.9%. The stock looks cheap relative to the market but has been held back by fear over its many legal woes. Earlier in the month the bank settled one of the major cases against it, paying $1.7 billion to MBIA (NYSE:MBI) and taking a stake in the insurer to settle its suit.