Today's 3 Best Stocks

Today's 3 Best Stocks

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

Can nothing go wrong for the broad-based S&P 500 ? Following an August swoon, today's economic data and other intangibles certainly appear to be pointing in that direction.

On the economic news front, industrial production for August rose 0.4%, led by manufacturing output, which jumped 0.7% and hurt by utilities output, which dipped 1.5%. Although industrial production actually missed the 0.5% growth forecast by economists, it still represents the fastest rate of expansion we've witnessed in six months and would bode well that the manufacturing side of the economy is continuing to get better.

The intangible factor I speak of that has the market abuzz today is news that prospective Federal Reserve chairman nominee Larry Summers has dropped out of the running. As my Foolish colleague Dan Dzombak notes, some investors viewed Summers as being too intricately tied to Wall Street firms, while others took the opposite approach and saw Summers as a political pawn for the U.S. government. With Summers now out of the picture, investors seem pleased that a more neutral candidate may get the job once Ben Bernanke's term is up.

Wrangling in this pleasant news, the S&P 500 advanced 9.61 points (0.57%) to finish at 1,697.60, the ninth time in 10 days the index has moved higher.

Decisively leading the S&P 500 higher today (and a newcomer to the top-performers list) is specialty metal products manufacturer Allegheny Technologies , which jumped 8.1% after announcing the sale of its tungsten materials business to Kennametal for $605 million. The deal is a win-win for both parties involved, as the cash will allow Allegheny to focus on its faster-growing flat-rolled metal businesses, while Kennametal will add about $340 million in annual sales to its books and save in the neighborhood of $30 million to $40 million annually through synergies.

Sticking with the theme of aerospace and defense winners, Boeing advanced 3.9% after a Reuters report noted that the company had the winning bid in South Korea for its F-15 Stealth Eagle fighter jet totaling $7.6 billion. What's noteworthy about the win, as my Foolish colleague Dan Carroll points out, is that Boeing won by default since both Lockheed Martin and Eurofighter's fighter jets came in above the predetermined budget set by South Korea. Given the ability to meet numerous price points for its customers and government agencies is just another reason why Boeing is a dominant force in the aerospace and defense industry.

Finally, homebuilders in general had a good day, but none more so than PulteGroup , which rose 3.8%. Although no company-specific news was behind today's move, it isn't too far-fetched an idea to assume that investors were pleased to see Larry Summers drop out of contention for becoming the new Fed chairman. Among the sectors concerned about Summers; being appointed to the position are those that are highly sensitive to interest rate changes, like the homebuilding sector, since the Fed is responsible for setting the targets for the federal funds eate. With Summers now out of the picture, investors feel confident that a Wall Street- and government-neutral chairman will be nominated for the position, thus (hopefully) having a minimal impact on interest rates and Pulte's total home sales.

Three strong buys for a market filled with skeptics
With the American markets once again close to reaching new all-time highs, investors and pundits alike are skeptical about future growth, but they shouldn't be. Many global regions are still stuck in neutral, and their resurgence could result in windfall profits for select companies. A recent Motley Fool report, "3 Strong Buys for a Global Economic Recovery," outlines three companies that could take off when the global economy gains steam. Click here to read the full report!

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Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of Lockheed Martin and recommends Kennametal. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Originally published