Record highs on the markets are no longer a surprise for investors, but the Dow Jones Industrial Average (DJINDICES:^DJI) is back into record territory again today, with Bank of America's (NYSE:BAC) stock swinging sharply higher to pull the blue-chip index up. As of 2:15 p.m. EDT, the Dow has picked up 90 points, or about 0.6%. Most of the index's members are in the green, with B of A and other financial stocks shooting higher as economic data continues to show improvement in the U.S. economy. Let's catch up on what you need to know on the markets Tuesday.
Bank of America moves on up
Bank of America's stock has jumped 2.3% so far, leading all Dow members up and adding to the 77% gain it has seen over the past year. Wall Street has seemingly come to terms with the likelihood that the Federal Reserve could slow down its bond-buying program as soon as the economy picks up steam, even as institutions have thrived thanks to the central bank's easy money. The Federal Reserve Bank of Philadelphia's president, Charles Plosser, said today that the Fed should consider beginning to wind down purchases in June at its next meeting, predicting that unemployment will fall to nearly 7% by that time.
While B of A and other leading financial firms will miss stimulus, the improving economy is nothing for them to complain about. Even though B of A continues to fight lawsuits regarding its Countrywide Financial unit and other problems, the company's cost-cutting measures and wealth management unit continue to stand out -- even as the firm struggled with an earnings miss last quarter. This stock may not see the kind of astronomical gains it pulled in last year, but B of A is setting itself in the right direction for a steady future.
Firms all across the Dow are on the way up today, and the gains are hardly limited to finance. Johnson & Johnson (NYSE:JNJ) shares have jumped 1.2% after the FDA fast-tracked the company's hepatitis C medication simeprevir. The agency OKed the priority review after J&J's drug excelled in three Phase 3 clinical trials. Hepatitis C has become a competitive market recently, and while simeprevir will have rivals, the drug offers yet another revenue stream for a company that has handled the patent cliff as well as any other big pharma firm.
Microsoft (NASDAQ:MSFT) also ranks among the Dow's leaders today: The software firm's shares have gained 1.4%. The company continues to square off with Google in the fight for email users, announcing today the addition of Google Chat to its Outlook.com service. Microsoft has already launched attacks on Google with its "Scroogled" advertising campaign, but today's announcement is intended to satisfy user requests for the chat client in yet another attempt to drive Gmail traffic to Outlook.
Finally, McDonald's (NYSE:MCD) has risen 0.9% so far today. McDonald's announced the addition of three new Quarter Pounder burgers to its menu today in another attempt by the fast-food titan to drive revenue since sales have begun to lag recently. The company is also dropping its third-pound Angus burgers, which could help McDonald's by cutting its meat costs. There's no telling whether a simple menu switch is enough to turn around this company's sales slump, but if nothing else, it's a tune-up for a Quarter Pounder that hasn't changed much over the years.