U.S. stocks absolutely took off today, no matter how you slice it. Buoyed by a steady flow of positive economic news, markets started strong, only to surge further strongly during the afternoon's portion of the trading session.
Two specific economic reports provided most of the fuel for today's rally. U.S. retail sales rose strongly in February, increasing at the highest rate in five months, driven largely by boosts to spending at car dealerships, gas stations, and clothing retailers. Additionally, small-business optimism rose once more in February. The reading has increased over seven consecutive months and now sits at its highest point since December 2007. The Federal Reserve Open Market Committee also met but announced no new actions on interest rates or further stimulus.
The largely positive news propelled the Dow Jones Industrial Average (INDEX: ^DJI) to its highest level since May 2008, closing up 218 points or 1.7%. The rally also drove the Nasdaq 1.9% higher and above the 3,000-point level, its highest closing level in 11 years. The S&P 500 also rallied 1.8%.
Financials led the rally, spiking 4% with both Bank of America (NYS: BAC) and JPMorgan Chase (NYS: JPM) gaining 7% and 6.2%, respectively. The Federal Reserve released the results of its most recent stress tests, a move that paved the way for many financial stocks to raise their dividends.
Industrial stocks also performed well on the Dow today. Aluminum heavyweight Alcoa (NYS: AA) rose 4.5% on positive news surrounding the company's dispute with the world's largest aluminum company, RUSAL. Industrial-equipment maker Caterpillar (NYS: CAT) also rose strongly during the trading day. The industrial behemoth ended the day up 4%.
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At the time thisarticle was published Andrew Tonner owns none of the stocks mentioned here. The Motley Fool owns shares of JPMorgan Chase and Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.
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