Market Recap: Financial Stocks Lead Rally
Markets closed up on Wall Street today: Dow +0.83%, S&P +0.89%, Nasdaq +1.22%, Oil -1.03%, Gold +0.34%.
On the commodities front, Oil (NYSE:USO) fell slightly to $97.47 a barrel. Precious metals were up, with Gold (NYSE:GLD) climbing to $1,746.30 an ounce while Silver (NYSE:SLV) rose 1.42% to settle at $33.74.
Hot Feature: Construction Spending in U.S. Rose in December
Today’s markets were up because:
1) Manufacturing. The Institute for Supply Management’s manufacturing index rose to 54.1 in January, from 53.1 in December, signaling growth in the industry that accounts for roughly 12 percent of the U.S. economy. Manufacturing growth could help cushion the U.S. economy from a slowdown in Europe being caused by the region’s sovereign debt problems. Without any new fires in Europe, today’s manufacturing data, which has been backed up by recent regional reports by the Federal Reserve, helped markets rally after a relatively thin session on Tuesday.
2) Tech. The technology sector was supported today by strong quarterly results from Broadcom (NASDAQ:BRCM) and Seagate (NASDAQ:STX). Broadcom reported slightly better results while also issuing a brighter outlook for 2012, while Seagate shares surged after the data storage company reported strong quarterly sales and earnings. AOL (NYSE:AOL) also joined in the rally after reporting a 66 percent drop in fourth-quarter earnings that was still better than expected.
3) Financials. Financial stocks led today’s rally, supported by expectations that a highly anticipated IPO filing by Facebook could signal a rebound in capital markets activity. Shares of Citigroup (NYSE:C), Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), and JPMorgan (NYSE:JPM) all rose between 2 and 4 percent.
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