Markets closed up on Wall Street: DJI +0.76% SP500 +0.62% Nasdaq +0.78% Gold +0.64% Oil -0.95%.
Risk on! The Dow continued to gravitate toward 13,000 as Ben Bernanke promised investors the Federal Reserve will subsidize the economy so long as necessary. On the commodities front, Oil (NYSE:USO) resumed its upward move to close at $113.21. Gold (NYSE:GLD) followed through after yesterday’s bounce off support of $1,5000, and Silver (NYSE:SLV) has turned into a volatile mess now that traders are testing their hands at shorting. Unlucky for them, Silver melted up 6.75% today.
Today’s markets were up because:
1) The Fed didn’t disappoint. Let’s be honest: the Fed and Treasury are granting welfare to a very fragile US economy. And today the kids in the welfare line wanted to know one thing: will the subsidies continue? Uncle Ben said they certainly will. So the kids are happy and investors got back to investing their cheap money in the stock market. Don’t Miss all the details in “Fed Open Market Committee: Quantitative Easing 2.5 Beta Launch“.
2) Everybody loves … earnings! The earnings beats just keep on coming. Utilities (NYSE:XLU) did a lot of reporting as Southern Company (NYSE:SO) and Exelon Corporation (NYSE:EXC) beat. Defense (NYSE:PPA) also rolled out a lot of announcements with positive days for General Dynamics (NYSE:GD), Northrop Grumman (NYSE:NOC) and Boeing (NYSE:BA). If you love staying in the know during earnings season, join us for our coverage here all day long.
3) Durable Goods were strong. New orders for Durable Goods rose 2.5% last month — led by transportation equipment (NYSE:XLI), computers (NASDAQ:QQQ), and defense-related products (NYSE:PPA). But it’s a lagging indicator, so don’t go crazy until we see how inflation affects orders this summer. On another economic note, Home Ownership fell again — but that’s not necessarily a bad thing.
Now that you’re in the know, have fun reading President Obama’s birth certificate!