3 Dow Stocks That Got Fired Up Today
For bulls, today was the ultimate culmination of a sequence of events that started months ago. Ever since the European financial crisis started spreading out of Greece to larger countries,, like Italy and Spain, investors have been on edge, waiting for Europe to come to some consensus on how to handle the problems there. Today, the European Central Bank finally blinked and took action, agreeing to buy bonds in an effort to reduce the high interest rates that have Spanish and Italian investors so worried. Stocks around the world soared in response, and the Dow Jones Industrials (INDEX: ^DJI) finished with a better than 240-point gain. Even better, the S&P 500 (INDEX: ^GSPC) soared to a four-year closing high.
The most direct beneficiaries of the ECB's move were financial stocks, with JPMorgan Chase (NYS: JPM) and Bank of America (NYS: BAC) leading the Dow higher, with gains of 4.3% and 5%, respectively. As Fool contributor John Maxfield observed earlier today, taking some of the potential for a European financial meltdown off the table is definitely a plus for big U.S. banks. JPMorgan also announced it had appointed a new executive to run the London investment office involved in losing billions in the "London Whale" trading scandal earlier this year, replacing former executive Ina Drew, who resigned in connection with the incident. Moreover, a JPMorgan analyst said that B of A could end up with a big earnings boost from gains in the housing market, as improving conditions could help reduce loan losses and property-related expenses.
General Electric (NYS: GE) also hit a yearly high today, rising more than 3%. It, too, has connections to the financial industry, but the conglomerate's more economically sensitive business lines also got help from the general optimism. At this point, bullish investors have to hope that enthusiasm over economic prospects will create a virtuous cycle of positive feedback, spawning new investment, and getting the economy on a path to greater expansion.
Don't let market hysteria lead you to make bad choices with your money. A more reasoned look at stocks is the best path to success. For instance, General Electric did well today, but it still faces plenty of challenges. Get both sides of the coin in the Fool's premium report on General Electric, and make a smarter investing decision.
The article 3 Dow Stocks That Got Fired Up Today originally appeared on Fool.com.Fool contributorDan Caplingerowns warrants on JPMorgan Chase. You can follow him on Twitter@DanCaplinger. The Motley Fool owns shares of Bank of America and JPMorgan Chase. 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 Fool has adisclosure policy.