Investors had been growing nervous that the Federal Reserve would soon begin tapering its bond-buying program and the days of free money would soon be over. But on the eve of a two-day Fed meeting, investors decided that the central bank would not yet cut off stimulus so the bullish rally continues.
The only substantial economic data released today was also positive, which likely added to investors bullish moves. The National Association of Home Builders released the results from its monthly survey, and for the first time in seven years the Home Builders Index hit above 50, at 52. This means that more builders view sales conditions as good rather than poor. For more on this report, click here.
As the closing bell rang, the Dow Jones Industrial Average (DJINDICES:^DJI) was higher by 109 points, or 0.73%, and now rests at 15,179. The S&P 500 (SNPINDEX:^GSPC) and the Nasdaq also both increased, gaining 0.76% and 0.83%, respectively. With all the bullish news and attitude on Wall Street, only five of the Dow's 30 components ended the day in the red. This morning, I touched on why Verizon, Merck, and Home Depot were all in negative territory, which you can read about by clicking here, or continue reading to learn who the other two losers were and why.
Shares of AT&T (NYSE:T) moved lower by 0.42% after rumors began spreading that the wireless communications company may be interested in making a huge buyout. Reports indicate that AT&T has offered to buy the Spanish telecom company Telefonica. The offer price of $93 billion has been thrown out there by a number of media reports, but it is yet to be confirmed by AT&T and Telefonica has denied the report.
The only other loser today was Alcoa (NYSE:AA), which fell 0.12% this afternoon. My Fool colleague Doug Ehrman recently commented on the fact that while China's economy has been slowing, the country's government has marked its GDP growth rates at 7.5%, which happens to be near the current level of growth in the country. Doug explains that this will affect Alcoa in the future because the company relies on infrastructure and industrial production in the country to be strong, but since it currently has high inventory levels of aluminum and growth in areas that would use a large amount of the metal is not likely to pick up anytime soon, Alcoa's own growth will likely be slow.
Fool contributor Matt Thalman and The Motley Fool have no position in any of the stocks mentioned. Check back Monday thru Friday as Matt explains what caused the Dow's winners and losers of the day and every Saturday for a weekly recap. Follow Matt on Twitter @mthalman5513. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.