Markets closed up on Wall Street today: Dow +0.35%, S&P +0.56%, Nasdaq +0.98%, Oil +1.82%, Gold +0.31%.
On the commodities front, Oil (NYSE:USO) made a reversal, climbing to $97.43, while precious metals gained slightly, with Gold (NYSE:GLD) up to $1,594.20 an ounce and Silver (NYSE:SLV) up 1.33% to $39.21 an ounce.
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Today’s markets were up because:
1) M&A activity. With so much negative economic news — declining consumer sentiment, Standard & Poor’s (NYSE:MHP) putting the U.S. on downgrade watch, and the continuing impasse of debt ceiling talks — markets could have easily been down again today. But in a rare feat, they were bolstered by individual sectors and stocks. Clorox (NYSE:CLX) and Petrohawk (NYSE:HK) deals were responsible for huge NYSE gains.
2) Euro-bank stress tests. The results of the stress tests for 90 European banks had investors around the world on the edge of their seats, but ultimately the results of the test held no real surprises and could have definitely been worse. Only 8 of the banks failed, though another 16 narrowly passed. The eight failing banks had a combined shortfall of 2.5 billion euros in capital under the European Banking Authority’s worst-case economic scenario. Last year’s 7 failing banks had a combined shortfall of 3.5 billion euros. Not only did this year’s failing banks fare better than last year’s, but there were significantly fewer than expected. Estimates had the number near 20. So while the results of the stress test might not be considered good news, they most certainly aren’t bad, especially considering the failing banks are right where one would expect them to be: 5 in Spain, 2 in Greece, and 1 in Austria.
3) Google. The so-much-more-than-a-search-engine’s new social networking tool, Google+, has already gained over 10 millionusers in just 2 weeks and is only one of many reasons why Google’s latest earnings report throttled the company’s pared down expectations. (See: “Here’s Why Google+ Means Serious Money“) Net income rose to $2.5 billion versus $1.84 billion in the same quarter a year earlier, a 36.1% increase. The success of Android, which accounted for 40% of smartphone sales this year is another reason for the great earnings report that pushed up the company’s stock 13.34%, trading on a volume of 12.27 million today where the 30-day average is only 3.01%. Google’s good fortune alone comprised a good share of the Nasdaq’s gains today in an otherwise shaky day of trading.