The Dow Jones Industrial Average (INDEX: ^DJI) rose a solid 46 points, or 0.3%, today. The broader S&P 500 rose 0.2%.
There were two big pieces of news. First, out of Congress, both the House and Senate voted to extend the payroll tax cut, some unemployment benefits, and the "doc fix" preventing Medicare rate cuts to doctors. The payroll tax cut and unemployment benefits are key parts of the Federal fiscal stimulus that have been in place to help prop up the economy during the downturn. There had been some concern than their extension might get held up again by the Republican-controlled House, as it was in December, but ultimately that chamber's majority party decided that it was better to agree to a two-month tax cut extension than risk popular wrath during an election year.
Meanwhile, austerity-minded European leaders are coming closer to agreeing to give Greece the bailout money they already agreed to give it in exchange for the savage deficit-reduction measures its Parliament recently voted to pass.
While failure to extend the payroll tax cut or release the bailout funds could have had tough implications for the economy and financial markets, both events were pretty much expected, so stocks rose only slightly. If either had actually been in significant doubt leading into today, we could have probably seen stronger performance, not just from indexes, but from cyclicals and financials. As it was, JPMorgan Chase (NYS: JPM) did put up a strong 1.2% gain -- this despite Moody's threatening to downgrade virtually the entire financial system -- but names like Bank of America and Alcoa were actually down for the day.
It was an interesting day for the Dow's top-gainer, Intel (NAS: INTC) , which may have to delay the launch its Ivy Bridge processor platform until June. In other news, according to Piper Jaffrey, supply-chain fanaticApple (NAS: AAPL) may be working on its own chip with help from ARM (NAS: ARMH) , whose technology is in use in the chips for most smartphones and tablets. While it could mean lower costs for Apple and more efficiency for its laptops, it's potentially dangerous for Intel, which is currently a major Apple chip supplier and might lose out on a healthy chunk of business if a switch is indeed made.
The Dow's up today, but it's important to remember that what happens to the market on a day-to-day basis doesn't matter nearly as much as how our stocks perform over the long-run. If you're interested in one stock that our chief investment officer picked to crush the market, check out our brand-new report, "The Motley Fool's Top Stock for 2012." It highlights a company that is revolutionizing commerce in Latin America. For a limited time, you can get instant access to the name of this company for free by clicking here.
At the time thisarticle was published Ilan Moscovitzowns shares of Apple. The Motley Fool owns shares of JPMorgan Chase, Apple, Bank of America, and Intel.Motley Fool newsletter serviceshave recommended buying shares of Intel, Apple, and Moody's; and creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.