The Dow Jones Industrial Average (INDEX: ^DJI) had a pretty boring month -- until today.
The index rocketed higher out of the gate, and rose more than 200 points for the day on the news that a new bond buying program by the ECB will gobble up short-term government bonds to lower the borrowing costs of troubled nations. Mario Draghi has put a blank check on the table and is ready to buy an unlimited amount and do whatever it takes to save the ailing Euro.
But that's not all!
We had great news on our shores, as well. A report by Automatic Data Processing indicates that U.S. companies added workers in August at the fastest pace in five years. This is seen as a promising omen ahead of tomorrow's uber-important unemployment figures. The Labor Department also said that jobless claims headed lower.
All of this has created a perfect storm of profit, and has pushed the S&P 500 (INDEC: ^GSPC) to a four-year high. Each and every component on The Dow was up big today, with finance and tech stocks leading the charge. Bank of America (NYS: BAC) , JP Morgan (NYS: JPM) , and Cisco (NAS: CSCO) were up well over 4% in trading today, and with good reason.
Cisco shares got dragged through the mud earlier this year, as investors saw a big slowdown in European business tech spending amid all of the economic uncertainty. However, such upgrades and maintenance are vital parts of modern businesses and, rather than get eliminated entirely, those purchases more realistically just got delayed, and will occur in a later cycle or quarter. Now that Europe can breathe easier, perhaps their businesses' tech budgets can, too.
JP Morgan and Bank of America continue to impress. Bank of America is the Dow's best performing stock of the year, but still remains incredibly cheap, as does JP Morgan. For all of the bad press bestowed on big banks and high finance in the last few years, I strongly believe it will be one of the best performing sectors in the near term.
I'm not the only one. At the beginning of the year, our top finance and banking analyst indicated that Bank of America would likely be the Dow's top stock of 2012 and, so far, he's been right by a mile. Learn what else he has to say about this bank's future in his new premium research report. The report will tell you everything you need to know about the company, including the three must watch areas for investors today. Read more by clicking here.
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The article Why the Dow Absolutely Soared Today originally appeared on Fool.com.
Austin Smith owns no shares of the companies mentioned here. The Motley Fool owns shares of Bank of America, JPMorgan Chase, and Cisco Systems. 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.