Greece Subsides, Dow Soars. Will It Last?
After taking a severe beating last week -- in fact, the worst five-day session so far this year -- the Dow Jones Industrials (INDEX: ^DJI) stormed back today, finishing up 1.09%. The other two major indices even outperformed the Dow, with the S&P 500 finishing up 1.60% and the Nasdaq pulverizing the market with a 2.46% performance. Also turning in a strong rally today was the United States mid-continent oil benchmark, WTI oil futures, up 1.49%.
Today's strong performance can be chalked up in part to encouraging dialogue among world leaders and reassuring support of eurozone stabilization. The G-8 meeting taking place over the weekend reaffirmed those nations' wishes to keep Greece in the eurozone, affirming that they maintained their support for the country, which will once again try to elect a political majority next month.
Also helping support the markets today was China's reassurance that it's determined to maintain economic expansion, possibly indicating that it could use fiscal measures as a way to add some fuel to its already growing industries. This news is a mixed bag, though, because although the promise to grow could encourage investment, extra investment doesn't mean the outcome will lead to a stronger economy.
Today could also be partially a result of investors' discovery of deals in what they consider oversold markets, with energy and technology witnessing an extended buying session. Google finished the day up 2.28%, with news that the giant plans on closing its $12.5 billion purchase of Motorola Mobility Holdings (NYS: MMI) by midweek. Google will possess more than 17,000 patents through this acquisition, giving it more firepower to contend with Apple (Nasdaq :AAPL) and Microsoft.
The entire energy industry seemed to enjoy the day, with the encouraging news of euro stabilization and GDP growth. Chevron (NYS: CVX) up 1.36%, further improved its liquefied natural gas business, announcing its Australian subsidiaries have an agreement with Tohoku Electric Power to deliver LNG to the island continent. Chevron is in a strong position, with an immense spread between cheap natural gas prices in Australia and expensive prices in Japan.
The broad markets had an exceptional day, outside of Facebook (NAS: FB) , whose second day was far from stellar, but I wouldn't expect this to start a significant bull market. Today was sort of a reprieve from eurozone troubles, which will be increasingly disruptive as the next Greece election nears. Today really did seem more of a quick opportunity to buy oversold stocks for short-term-minded investors. When markets are as volatile as we have seen the past month, it's always a good idea to look into dividend stocks with remarkable returns and even more impressive business models. So don't miss out on free report, outlining 9 Rock Solid Dividend Stocks. This report is offered free for a limited time, so check it out now!
At the time this article was published Joel South owns shares of no company listed above. The Motley Fool owns shares of Microsoft, Apple, and Google.Motley Fool newsletter serviceshave recommended buying shares of Apple, Microsoft, Google, and Chevron and creating bull call spread positions in Microsoft and Apple. The Motley Fool has adisclosure policy. We Fools don't 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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