Why the Dow Soared Triple-Digits This Morning
Jun 19th 2012 11:00AM
Updated Jun 19th 2012 11:08AM
With the summer solstice approaching, Wall Street wants a present, and it's pretty sure it's going to get one. Given all the troubles in Europe and their impact on the U.S. economy, investors seem to increasingly expect the Federal Reserve to take further steps toward stimulating economic growth when it meets later this week. Analysts at Goldman Sachs believe that the Fed will buy more bonds to keep rates down and possibly extend its "Operation Twist" and its focus on reducing long-term rates. However backward it may seem for stocks to rally because of economic weakness, investors are buying into the concept, and the Dow Jones Industrials (INDEX: ^DJI) rose 100 points by 10:45 a.m. EDT.
Microsoft (NAS: MSFT) soared almost 4% after announcing that it is offering a tablet to go up against Apple's (NAS: AAPL) iPad. The Surface has a larger screen than the iPad and comes with a screen cover that doubles as a keyboard. Details on when the Surface will be available and how much it will cost were sketchy, but the decision to make its own tablet rather than looking to find a partner is interesting in light of Microsoft's hugely important relationships with other hardware manufacturers.
This morning, JPMorgan Chase (NYS: JPM) CEO Jamie Dimon goes back to Washington for a repeat performance in front of Congress, this time for the House Financial Services Committee. JPMorgan shares are up more than 2%, but it's hard to see how investors can expect anything very different from Dimon's Senate testimony last week, although some expect a more hostile set of questions from representatives.
McDonald's (NYS: MCD) , however, missed out on the Dow's gains, falling about 0.6%. As Fool analyst Austin Smith noted, the stock fell yesterday as well, despite what should arguably have been good news after the Greek elections. But McDonald's remains strongly tied to Europe overall, and until Spain, Italy, and other larger economies get their act together, the fast-food giant could see continuing pressure.
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At the time this article was published Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool owns shares of JPMorgan Chase, Apple, and Microsoft. Motley Fool newsletter services have recommended buying shares of McDonald's, Microsoft, and Apple, as well as creating bull call spread positions on Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.
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