Why the Dow Popped
Markets surged today on initial claims data that was worse than expected and consumer prices that dropped the most in three years. Wait, what? Yes, bad news for the economy is good news for investors, as it looks like the Federal Reserve hand will be forced into starting another round of quantitative easing.
This comes amid reports that the global central banks are preparing a coordinated action should Sunday's Greek elections spook investors. Whether this planned stabilization is necessary remains to be seen, but a new round of quantitative easing would fuel another leap forward for stocks. While eurozone uncertainty has sent some investors to the sidelines, those who have stayed invested during this depressing news cycle may reap the most benefits, assuming world leaders don't stubbornly continue on the same failed path.
That said, let's take a closer look at how the three major indexes are fared and a couple of stocks making headlines.
Gain / Loss
Gain / Loss %
|Dow Jones Industrial Average (INDEX: ^DJI)||155.53||1.24%||12,651.91|
|Nasdaq (INDEX: ^IXIC)||17.72||0.63%||2,836.33|
|S&P 500 (INDEX: ^GSPC)||14.22||1.08%||1,329.10|
Source: Yahoo! Finance.
There were strong performances across the board, as both the Dow and S&P 500 both gained more than 1%. The best-performing sector, by a nose, was financials, and the Direxion Daily Financial Bull 3X Shares (NYS: FAS) jumped 3.6% correspondingly. Finally, the market's "fear index," the VIX (INDEX: ^VIX) , plunged 10% today, its largest move of the month. However, if the Greek elections go poorly, volatility could be set to return in a big way.
What happens in Europe could have a huge impact on presidential election in the U.S.; fortunately, The Motley Fool has you covered with our new special free report, "These Stocks Could Skyrocket After the 2012 Presidential Election." Each candidate has his own plan for getting America back on track, and The Motley Fool will have you prepared to profit -- no matter who wins! Download your copy now, for free, and discover unique ways to profit from the election -- if you buy the right stocks before the next president's term begins.
At the time this article was published Fool contributorDavid Williamsonholds no position in any company mentioned. Check out hisholdings and a short bio. 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.