Markets closed up on Wall Street today: Dow +1.44%, S&P +2.25%, Nasdaq +2.95%, Oil -0.44%, Gold -2.07%.
On the commodities front, Oil (NYSE:USO) fell to $77.27 a barrel. Precious metals were also down, with Gold (NYSE:GLD) falling to $1,623.40 an ounce while Silver (NYSE:SLV) fell 2.70% to $29.97 an ounce.
Hot Feature: Did the Gold and Silver Plunges Shakeout the Weak?
Today’s markets were up because:
1) Bernanke. Federal Reserve Chairman Ben Bernanke said today that the central bank is prepared to take additional steps to boost U.S. economic growth, while he cautioned lawmakers against making moves to balance the budget that would harm recovery efforts. However, while he assured the public the Fed would do its best to stimulate growth, in his testimony before Congress’s Joint Economic Committee, Bernanke noted economic indicators, such as initial unemployment benefits applications and surveys of hiring plans, that he said “point to the likelihood of more sluggish job growth in the period ahead.” Furthermore, he did not detail any specific plans to combat the economic slowdown, and said that though “monetary policy can be a powerful tool…it is not a panacea for the problems currently faced by the U.S. economy.” For the economy to turn around, Bernanke believes it will take “a wide range of other policies” pertaining to labor markets, housing, trade, taxation, and regulation.
2) Banks. The markets were down for most of the day, particularly bank stocks, which have been continually nailed on concerns over their exposure to European sovereign debt. However, markets got a boost late in the day following a report that European Union officials were examining ways to coordinate the recapitalization of struggling banks and valuations. Even Bank of America (NYSE:BAC), down as much as 2% within the last hour of trading, rallied to a 4.16% gain by closing bell. Citigroup (NYSE:C), JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC), Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), and Barclays (NYSE:BCS) all joined in the rally, which had 11 of the 12 major sectors trading up, as well as the three major U.S. indices.
3) Transportation. As oil prices continue to decline, transportation companies are looking at lower fuel costs, usually one of the single-largest expenses for commercial airlines and shipping companies. For that reason, the transportation sector was one of today’s best performers, with all of the following trading higher today, even before news from EU officials gave markets a boost: United Parcel Service (NYSE:UPS), Union Pacific Corp. (NYSE:UNP), FedEx (NYSE:FDX), AMR Corp. (NYSE:AMR), Patriot Transporation (NASDAQ:PATR), Norfolk Southern (NYSE:NSC), JetBlue (NASDAQ:JBLU), Delta Air Lines (NYSE:DAL), US Airways (NYSE:LCC), United Continental Holdings (NYSE:UAL), Alaska Air Group (NYSE:ALK), and Southwest Airlines (NYSE:LUV).