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EU Optimism Fuels Dow's 277-Point Gain; Blue Chips Bulk Up in June

By: Schaeffer's Investment Research
Posted: 6/29/2012 4:45:00 PM
Referenced Stocks: BAC;DNDN;GEVO;JPM;VZ

Thanks to a successful European Union (EU) summit, the Dow Jones Industrial Average (DJI) enjoyed a massive burst of energy, as the bulls rushed back to the Street. "It was all about Europe once again, but the news was actually good this time. U.S. markets started the day off strong, and the buying continued all the way into the close," smiled Schaeffer's Senior Equities Analyst Joe Bell. "Euro-zone leaders came to agreement on several key issues that investors hope will improve financial conditions in the region and bring bond yields lower for Italy and Spain."

Keep reading to see what else was on our radar today:

And now, a look at the numbers...



The Dow Jones Industrial Average (DJI - 12,880.09) gapped higher this morning, and extended its climb all the way until the closing bell. The Dow rocketed 277.8 points, or 2.2%, to end 0.3 point below its session peak. Twenty-nine of the 30 blue chips saw wins today, as Bank of America ( BAC ) led the long line of outperformers with a 5.7% rise. JPMorgan Chase & Co. ( JPM ) was the only losing issue, turning in a 0.4% drop. The Dow added 1.9% for the week, and 3.9% for during June -- its best monthly increase of 2012. For the second quarter, the blue-chip barometer was off 2.5%.

The S&P 500 Index (SPX - 1,362.16) rose 33.1 points, or 2.5%, landing just 0.01 point away from its session high. Meanwhile, the Nasdaq Composite (COMP - 2,935.05) surged 85.6 points, or 3%, marking its best session of 2012. For the week, the SPX gained 2%, and nearly 4% for the month. Its quarterly total arrived at a loss of 3.3%. The COMP tacked on 1.5% for the week, and jumped 3.8% for June, but its second-quarter deficit of 5.1% was the worst of its fellow benchmarks.

The CBOE Market Volatility Index (VIX - 17.08) tumbled 13.3% today, settling with its lowest daily close since May 2. The market's fear gauge peeled back 5.7% on the week, and saw a monthly loss of 29%. For the second quarter, the VIX was up 10.2%.

Today's highlight

Bell continued, "With today's big jump, the SPX can now contend with the key 1,360 area , which has served as resistance earlier this month."

Turning to today's major market stories...

For today's activity in commodities, options, and more, head to page 2.

Oil futures notched their best single-session percentage gain since March 2009 today, as positive news from the EU summit bolstered hopes for demand. Furthermore, the encouraging developments from across the pond weighed on the greenback, drawing foreign-currency holders to the dollar-denominated commodity. By the close, August-dated crude jumped $7.27, or 9.4%, to end at a three-week high of $84.96 per barrel. For the week, black gold advanced 6.5%. For the month and quarter, though, oil gave up 1.8% and 17.5%, respectively - crude's heftiest quarterly percentage drop since the end of 2008.

In similar fashion, gold futures also enjoyed a currency-related lift, capitalizing on the ailing dollar. Plus, the EU plan bolstered the malleable metal's appeal as an inflationary hedge. Against this backdrop, gold for August delivery advanced $53.80, or 3.5%, to end at $1,604.20 an ounce. For the week and month, the commodity tacked on 2% and 2.8%, respectively. For the quarter, however, gold shed 4%.

Levels to watch in trading...






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At the end of every market day, the staff at Schaeffer's Investment Research reviews the trading day in detail, covering major events and key market developments. Don't miss this critical, timely and insightful report. If you enjoyed today's edition of Market Recap, sign up here for free daily delivery straight to your inbox.