Dow Heads North on Good Economic News


The Dow Jones Industrial Average had a better than average day yesterday. Rising 115 points to close at 13,900, the index was boosted by greater investor confidence. If yesterday and this morning are any indication of the benefit of positive economic news for the Dow, it's exciting to think of the sharp ascendance we could see from the Dow today.

Yesterday's news
Despite the inconclusive news from Italy's elections, U.S. investors were more interested in (and pleased by) Fed Chairman Ben Bernanke's reassurances that the current quantitative easing policy would continue. Completely overshadowing the international news, Bernanke restored confidence in the markets with his testimony in front of the Senate Banking Committee.

Today's news
Bernanke is set to testify in front of the Housing Committee on Financial Services this morning, and investors should expect a repeat performance of his testimony yesterday. Couple this with some positive economic news, and investors may have a surge of confidence as we move through the day. Core capital goods were up in January by 6.3%, a reversal of the anticipated 5.5% drop that analysts were expecting. And pending home sales were up 4.5% in January -- the highest rate seen since April 2010, when a home-buying tax credit was on the verge of expiring. Throw in some potentially good news from Italy and we've got ourselves a bonanza here: Democratic Party leader Pier Luigi Bersani may have a coalition developing behind him, which would allow a functioning government to be formed and the dysfunctional mess that many are afraid of to be averted.

Dow winners
Probably riding somewhat on the core-goods improvements, manufacturer Caterpillar is on the rise this morning. The company also has some good news from the techie world: Its new rugged phone is surprisingly agile and "well-balanced." The CAT B15 is an Android-based phone that is designed for the toughest conditions, and according to some hands-on tests, users are pleased with the phone's capabilities and non-sluggish performance, avoiding the issues that plagued previous attempts from other rugged-phone and -laptop manufacturers.

JPMorgan Chase is also up this morning, following the banking giant's announcement (during the company's Investor Day) that it will be cutting up to 17,000 jobs in the next two years, with 4,000 job cuts and $1 billion in savings targeted for the remainder of this year. CEO Jamie Dimon was clear that the company is in a good place and actually benefits from negative economic environments.The bank is also promising to change its stance on payday loans, after being called out on practices that didn't always conform to state laws -- though this nonconformance was simply through the act of facilitating a payday loan company's practices through online-based transactions. Rival Bank of America is also up this morning. The bank was also indicated in the payday loan debacle and is expected to follow JPM's lead.

Boeing is on the rise this morning, up 2.23% as of 11:45 a.m. ET. Despite news that the FAA doesn't have a timeline for the review and approval of the aircraft manufacturer's battery fix for its 787 Dreamliner fleet, the company has reason to celebrate. Boeing is seeking help from GE for a permanent fix to its battery problems, and even Elon Musk, CEO of Tesla Motors, is offering solutions. Elsewhere, Boeing is boasting of the successful use of its T-45 flight simulators as well as the successful second test flight of its liquid-hydrogen-powered Phantom Eye demonstrator.

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