On Tuesday, the stock market finally returned to where it was before Ben Bernanke disclosed the Fed’s timetable for ending quantitative easing.
On Tuesday, the stock market finally recovered from its post-FOMC slump. On June 18, the day before Ben Bernanke’s post-FOMC meeting press conference, wherein he announced the tentative timetable for the Fed’s phase-out of quantitative easing, the S&P 500 (NYSEARCA:SPY) closed at 1,651. Since that event, the S&P 500 did not close above that level until Tuesday, when it finished the session at 1,652. The Dow Jones Industrial Average (NYSEARCA:DIA) finished Tuesday’s session just 18 points below its June 18 closing level of 15,318, making that the number to watch when the bell rings at 4:00 on Wednesday.
Despite the fact that the ten-year Treasury yield still remains just above 2.6 percent, three of the four biggest gainers on the S&P 500 at Tuesday’s closing bell were homebuilder stocks. DR Horton (NYSEARCA:DHI) jumped 7.55 percent; Lennar (NYSEARCA:LEN) soared 5.93 percent, and PulteGroup (NYSEARCA:PHM) jumped 5.48 percent. Concern about rising mortgage rates has plagued homebuilder stocks since Dr. Bernanke announced the phase-out of quantitative easing on June 19. The SPDR S&P Homebuilders ETF (NYSEARCA:XHB) closed above $30 per share on Tuesday for the first time since June 18, skyrocketing 2.77 percent to close at $30.03.
The Dow gained 75 points to finish Tuesday’s trading session at 15,300 for a 0.50 percent advance. The S&P 500 climbed 0.72 percent to close at 1,652. The Nasdaq 100 (NASDAQ:QQQ) advanced 0.61 percent to finish at 2,984. The Russell 2000 (NYSEARCA:IWM) surged 0.87 percent to end the day at a new record-high closing level of 1,018.05. In other major markets, oil (NYSEARCA:USO) jumped 0.96 percent to close at $36.76.
On London’s ICE Futures Europe Exchange, September futures for Brent crude oil advanced by 36 cents (0.34 percent) to $107.02/bbl. (NYSEARCA:BNO). August Gold Futures advanced by $12.50 (1.01 percent) to $1,247.40 per ounce (NYSEARCA:GLD). Transports were in hyperdrive on Tuesday, with the Dow Jones Transportation Average (NYSEARCA:IYT) accelerating 2.38 percent.