Markets closed up on Wall Street today: Dow +1.53%, S&P +1.61%, Nasdaq +1.27%, Oil +0.17%, Gold +1.45%.
On the commodities front, Oil (NYSE:USO) climbed slightly to $92.35 a barrel. Precious metals were also up, with Gold (NYSE:GLD) climbing to $1,736.60 an ounce while Silver (NYSE:SLV) climbed 4.37% to settle at $34.16.
Today’s markets were up because:
1) Greece. Though Greece’s referendum on austerity measures still has the potential to seriously screw up the euro-zone’s plan to combat the region’s ongoing debt crisis, an integral part of which is a 50% writedown on Greek debt meant to help the nation avoid default, the picture isn’t so grim as it seemed yesterday. Several high profile meetings are taking place in Cannes today, where global leaders are gathered for a G-20 summit scheduled to begin tomorrow. Though all eyes are still on Greece, the appearance of a united front tackling the issue before there even is an issue has investors skittish, but not yet running for the hills. Greek Prime Minister George Papandreou, though it was his call for the referendum that created the mess, feels assured that his people will ultimately see the necessity of the austerity measures and the bailout, allowing everything to go forward as planned.
2) Fed. Late in the day, Federal Reserve officials announced their lowered outlook for U.S. economic growth in 2012, forecasting that unemployment will average between 8.5% and 8.7% by the final three months of next year. While Fed Chairman Ben Bernanke announced no new policies, he left the door open for more easing down the line, saying that the Fed is “prepared to take further action” to sustain the economic recovery.
3) Banks. After two days of sharp declines, markets were in the mood to rally today, with banks reaping the rewards. Bank of America (NYSE:BAC) started the day higher and held onto a 5% gain throughout, while JPMorgan (NYSE:JPM), Citigroup (NYSE:C), Wells Fargo (NYSE:WFC), Goldman Sachs (NYSE:GS), and Morgan Stanley (NYSE:MS) all tacked on about 3%. It’s fair to say Bank of America gained an extra boost from an announcement yesterday that it would not be charging debit-card users $5 per month afterall. Of course, that means the bank will have to make up the billions of dollars in revenue it will lose because of new debit-card regulations some other way, but that wasn’t enough to spoil it for investors.