Why the Dow Exploded Out of the Gate Today
The market came out swinging in 2012, with all three major indices up more than 2% in early trading before finishing up around a percent and a half.
|Dow Jones Industrial Average (INDEX: ^DJI)||+179.82 [+1.47%]||12,397.38|
|Nasdaq (INDEX: ^IXIC)||+43.57 [+1.67%]||2,648.72|
|S&P 500 (INDEX: ^GSPC)||+19.46 [+1.55%]||1,277.06|
Why was the market so upbeat today? Well, there was better-than-expected manufacturing data released by the Institute for Supply Management, as well as favorable bits and pieces out of Europe and the housing sector. Proponents of the "January effect" may also claim a win. But long story short, there was no one profound event today that drove the market on its own.
If you've been following the market, these three aren't shocking. Commodities and banking have tended to swing wildly on favorable and unfavorable economic news alike. Why? Because commodities are cyclical with the economy and because financials are so tied in to the macro problems we've been experiencing.
It's fun to look at the daily market news, but remember to keep your perspective and invest for the long term. If the big banks like JPMorgan Chase and Bank of America aren't your cup of tea, let me leave you with a smaller, simpler bank that has some of the best operational numbers I've ever seen. I wrote about it in our brand new free report: "The Stocks Only the Smartest Investors Are Buying." I invite you to take a free copy to find out the name of the bank I believe Warren Buffett would be interested in if he could still invest in small banks.
At the time this article was published Anand Chokkaveluowns shares of Bank of America and JPMorgan Chase. The Motley Fool owns shares of Bank of America and JPMorgan Chase. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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