3 Reasons Markets Were Up Ahead of Obama’s Address to Congress
Markets closed up on Wall Street today: Dow +2.47%, S&P +2.86%, Nasdaq +3.04, Oil +3.95%, Gold -2.97%.
On the commodities front, Oil (NYSE:USO) climbed to $89.42 a barrel. Precious metals declined, with Gold (NYSE:GLD) falling to $1,817.60 an ounce while Silver (NYSE:SLV) fell 0.59% to $41.62 an ounce.
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Today’s markets were up because:
1) Obama. Media are reporting that President Obama’s proposed job-creation package, which he will present in a nationally televised speech before Congress on Thursday, will institute some $300 billion in tax cuts and government spending. The plan will inject the over $300 billion into the economy in 2012 through infrastructure spending and aid to state and local governments. Anticipation of Obama’s speech tomorrow had markets rallying after three straight days of declines.
2) Germany. Germany’s (NYSE:EWG) top court rejected a series of lawsuits aimed at blocking the nation from participating in emergency loan packages. Though the court ruling requires that the government get approval from parliament’s budget committee before granting aid to other euro-zone economies, the result of the trial could have been much worse — it could have prevented the euro zone’s biggest and strongest economy from contributing to any bailout packages. Without Germany’s participation, bailout efforts would likely fall short, allowing countries like Italy and Spain to slide into another recession, crippled by a massive national debt.
3) Capital goods. Today’s best-performing market sector was that of capital goods, which gained 3.44% today to outperform all three of the major U.S. indices. While stocks like Caterpillar (NYSE:CAT), Boeing (NYSE:BA), Cummins (NYSE:CMI), Honeywell (NYSE:HON), and Deere & Company (NYSE:DE) were the sector’s most heavily traded as per usual, Standex International (NYSE:SXI) and Beazer Homes USA (NYSE:BZH) were the sector’s biggest gainers, climbing 14.70% and 12.09%, respectively.