Markets closed up on Wall Street today: Dow +0.36%, S&P +0.31%, Nasdaq +0.54%, Oil +0.46%, Gold +1.27%.
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Today’s markets were up because:
1) China’s GDP. Investors in the western world awoke to news that the world’s second-largest economy grew at an annually adjusted rate of 9.5% between April and June. China’s (NYSE:FXI) size and exploding consumption make it a huge player in the global market. Just as an example, strong demand in China for luxury vehicles has helped prop up sales for automakers like BMW (ETR:BMW) and Volkswagen (PINK:VLKAY), both of which expect to make record sales in 2011. Today’s numbers also helped propel rare earth stocks Molycorp (NYSE:MCP), Avalon Rare Metals (AMEX:AVL), Thompson Creek Metals (NYSE:TC), General Moly Inc. (AMEX:GMO), PolyMet Mining corp. (AMEX:PLM), and Freeport-McMoRan Copper & Gold Inc.(NYSE:FCX).
2) QE3. Markets have been down for the last three sessions as the public keeps getting hammered by reports of slowing economic growth. But today’s markets took a turn when the Fed released a report saying that they expect the pace of the economic recovery to pick up in the second half of the year, and if it doesn’t, they haven’t ruled out a third round of quantitative easing, should it become necessary. The country breathed a collective sigh of relief, which was followed by the ka-CHING of a cash register.
3) Congress gets its act together. As I write, President Obama is currently meeting with Democratic and Republican leaders of Congress to discuss raising the debt ceiling. Late Tuesday, Senate Republican Mitch McConnell suggested a plan that would allow Obama to raise the debt ceiling on his own. Even more astonishing than the proposal was that it had bi-partisan backing, with Democrat and Senate Majority Leader Harry Reid agreeing that the deal could help solve the current impasse in deficit-reduction discussions. Can I get an Amen?