In a perverse twist of logic only Wall Street would dare to justify, markets rose today after a trifecta of disappointing indicators sparked hope that the Federal Reserve will continue to pump money into the economy. GDP in the first quarter grew at a mediocre 2.4%, jobless claims rose unexpectedly, and April pending home sales missed expectations by a long shot. With bank stocks leading the way, the Dow Jones Industrial Average still went on to add 21 points, or 0.1%, to close at 15,324.
Despite missing growth expectations projected by economists, pending home sales in April still rose 0.3% from March -- and 13.9% from April of last year. With foreclosures falling more than 20% in the past year and real estate prices on the up-and-up, the housing recovery is no longer some distant phenomenon of the future. It's happening right now, and that means much healthier balance sheets for big time lenders such as Bank of America , which led the Dow with 2.6% gains Thursday.
JPMorgan Chase , the second-largest bank in the U.S. by market cap, added 1.7% as investors celebrated the rebound in real estate. Not only that, but as more and more money flows into the economy via the Federal Reserve, banks should stand to do better and better business -- a stark contrast to the state of financials just a few years ago, when the entire industry was on the brink of collapse.
After ending as the worst blue-chip performer yesterday, Coca-Cola lost another 1.5% today. While a worker strike at a bottler in Venezuela has hampered earnings in that country over the past several weeks, temporary unrest at one South American factory doesn't materially affect the $180 billion company that much. A more likely cause of the decline is that the stock, trading at 21 times earnings, just isn't valued as attractively as it once was.
The major Dow laggard of the day, however, was Walt Disney , which slipped 2.4% after the CFO explicitly stated that Wall Street was expecting too much from the entertainment icon. Jay Rasulo said last year's fiscal third quarter was hard to beat, as the company hit it big in the box office with the Avengers movie. Marketing costs will also drive returns down in the current quarter, he said.
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The article Bank Stocks Drive Dow originally appeared on Fool.com.
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