Bernanke Remarks Fuel Continued Rally, as Dow and S&P Top All-Time Closing Highs

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"Today's rally was all about Ben Bernanke," commented Schaeffer's Senior Equity Analyst Joe Bell, CMT. "We came into this session with a lot of upward momentum, but the Fed Chairman's post-close comments from yesterday were taken as a sign that tapering would happen later than perhaps some expected." As such, the Dow Jones Industrial Average (DJI) finished the session with a triple-digit gain that was just shy of its intraday peak.

Continue reading for more on today's market, including :

plus...
    Big Ben cheers the markets, Microsoft ( MSFT ) stirs things up, and Bank of America ( BAC ) bulls emerge.

The Dow Jones Industrial Average (DJI - 15,460.92) achieved a new closing high, exceeding its May 28 close of 15,409.39 by a modest margin. The blue-chip index added 169.3 points on the day, climbing 1.1%. All 30 Dow components moved higher today; in the lead was Intel ( INTC ), which added 3.2%. The "worst" performer, on a relative basis, was IBM (IBM), which eked out a 0.3% gain.

The S&P 500 Index (SPX - 1,675.02) also finished at a new closing peak, eclipsing the previous record of 1,669.16 (set on May 21), to end with a gain of 22.4 points, or 1.4%. Neither the SPX nor the Dow managed to overtake their all-time intraday highs. The Nasdaq Composite (COMP - 3,578.30) , on the other hand, hit an intraday peak of 3,579.29 -- its highest level since the fall of 2000 -- before closing slightly off this acme, up 57.5 points, or 1.6%.

The CBOE Market Volatility Index (VIX - 14.01) made a valiant effort to break higher in late-morning trading, but ultimately spent the entire session in negative territory, closing with a loss of 0.2 point, or 1.4%.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"The rally continues," added Bell. "Most major markets are at or near all-time highs, and the momentum has been incredible. The S&P 500 Index (SPX) has finished in the green for the sixth consecutive session, and gains were experienced by almost all of the major sectors."

3 Things to Know About Today's Market :

  • One of the main factors driving stocks today actually happened yesterday evening, as Federal Reserve Chairman Ben Bernanke calmed "tapering" fears via remarks at a National Bureau of Economic Research conference. Specifically, the Fed boss noted that, "Highly accommodative monetary policy for the foreseeable future is what's needed." (CNBC)
  • Microsoft ( MSFT ) CEO Steve Ballmer announced a broad reorganization , designed to enhance focus on non-PC devices and more modern offerings such as cloud-based software. Among the changes were new appointments for many of the company's top leaders. (The Washington Post)
  • Initial jobless claims jumped by 16,000 last week to a seasonally adjusted two-month high of 360,000. Economists were expecting the figure to edge lower to 340,000. Elsewhere, import prices slipped by 0.2% in June, while export prices edged down 0.1%. Both readings have fallen in each of the last four months, marking the longest streak of declines since 2008. (Los Angeles Times, Reuters)

5 Stocks We Were Watching Today :

  1. Search engine giant Google (GOOG) scored a pair of bullish brokerage notes.
  2. Short- and long-term call buyers took an unusual interest in Bank of America ( BAC ) .
  3. General Electric Company (GE) caught the attention of pessimistic speculators, who bet on a downturn by January.
  4. Aggressive bearish traders wagered on a steep retreat for outperforming SunPower Corporation (SPWR) .
  5. Cisco Systems (CSCO) calls were in demand, after the stock touched its second multi-year peak in three days.

EARNINGS

For a look at today's options movers and commodities activity, head to page 2.

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

Commodities :

Oil futures declined from yesterday's 15-month peak, after the International Energy Agency said an increase in crude supplies from non-OPEC countries in 2013 and 2014 may outpace global demand. August-dated oil fell $1.61, or 1.5%, to settle at $104.91 per barrel.

Meanwhile, gold futures finished higher for a fourth straight day, as the malleable metal was also buoyed by Bernanke's reassuring comments. The August-dated contract spiked $32.50, or 2.6%, to close at $1,279.90 an ounce.

SCHAEFFER'S MARKET POSTURE



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.


This article appears in: Investing , Options

Referenced Stocks: AAPL , AMD , BAC , INTC , MSFT

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