Why the Dow Reached New Highs Today
The Dow Jones Industrial Average (INDEX: ^DJI) gave investors reason to rejoice today, reaching levels not seen since before the depths of the financial crisis. Today the Dow gained 66 points, or 0.5%, to mark its highest close since December 2007. Similarly, the S&P 500 and Nasdaq both posted respective gains of 0.6% and 0.1%. A surprisingly positive reading from the Institute of Supply Management's Purchasing Manager's Index helped reassure investors that the teetering rally might still have room to run. In a sign of renewed confidence, the market's "fear gauge" or the VIX (INDEX: ^VIX) declined by 3.2%. Overall, today marked a surprisingly pleasant day for investors.
Around the markets
Although today seemed low-key from 30,000 feet, individual stocks saw some pretty massive swings during the trading day. Among major storylines, Chesapeake Energy's (NYS: CHK) embattled CEO Aubrey McClendon announced that he would remain acting CEO for the firm but agreed to step down as Chairman of the Board. The company has come under fire recently for granting McClendon rights to buy stakes in the company's oil and gas wells, as well as his use of those stakes to borrow more than $1 billion to finance other matters. Shareholders rejoiced and the stocked popped 6.3% on the news. Bank of America (NYS: BAC) posted the largest gain among Dow components. The banking giant rose 2.5% on news that it intended to cut around 2,000 jobs from areas such as investment banking, commercial banking, and wealth management.
On the downside, beleaguered smartphone manufacturer Research In Motion (NAS: RIMM) took a shelling from the market to the tune of a 5.7% decline. Investors continued to penalize the Canadian phone-maker for its inability to adapt in the rapidly evolving smartphone arena. Today, it unveiled prototypes of its supposedly next-gen BlackBerry 10 phone to developers at its annual conference. Instead of unleashing the buzz RIMM execs had hoped for, the commentary surrounding the devices and OS hovered somewhere around indifference with most observers calling it a watered-down version of its unsuccessful PlayBook OS. With smartphone demand absolutely exploding, the mobile revolution has RIMM largely in its rearview mirror. However, plenty of stocks are poised to ride this massive trend to impressive returns. The Fool recently compiled a research report detailing one great way to play this trillion dollar revolution. Better yet, we made it completely free for our readers, so just click here to access your free copy today.
At the time this article was published Fool contributor Andrew Tonner held no financial position in any of the companies mentioned in this article. You can follow Andrew and all of his Foolish writing onTwitterat@AndrewTonner. The Motley Fool owns shares of Bank of America.Motley Fool newsletter serviceshave recommended buying shares of Chesapeake Energy. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
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