Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
With the Federal Reserve set to begin its highly anticipated policy meeting tomorrow, stocks jumped on Fed news, but it was unrelated to the taper. Larry Summers, President Clinton's former treasury secretary, withdrew his name from consideration to be the next chairman of the central bank over the weekend. Summers was said to be one of the top two candidates, along with current Fed Vice Chairwoman Janet Yellen, and President Obama's top choice. However, Summers has been a magnet for controversy due to sexist comments and his role in the deregulation of the Clinton era, and several lawmakers, including Democrats, expressed preemptive opposition to Summers' nomination. Yellen is also seen as being more favorable toward stimulus, the real reason for the market's surge, as the Fed's stimulus has probably been the most influential market factor of the year. By the end of the day, the Dow Jones Industrial Average had gained 119 points, or 0.7%, to pull within 200 points of its all-time closing high.
Boeing shares took off today, gaining 3.9% on two items. First, its F-15 Silent Eagle appears to be on its way to joining the South Korean military as it was the only one of three fighter jets bidding that came within Korea's $7.64 billion budget for the purchase. Second, Boeing got a big vote of confidence from analyst Peter Arment of Sterne, Agee, & Leach, who lifted his price target from $124 to $164, saying that he expects 787 production to grow in 2015 and 2016, and that the fuel-efficient 777X jetliner should be yet another success. With Boeing's announcement that its 787 jumbo jet should be ready ahead of schedule, the aircraft maker seems to be hitting on all stops. Its stock has jumped 64% this year, and that's in spite of the battery fire problems earlier in the year.
Outside the Dow, Apple stock tumbled again, falling 3.2% as China Telecom said it would cut back on subsidies for the iPhone. Its subscribers will now have to pay about 27% more for the iPhone 5s than they did for the 5. Not only does that mean fewer iPhone purchases, but it also seems to indicate that the magnetic draw of the iPhone, which is why carriers began subsidizing it in the first place, seems to be fading.
Also, after hours Pandora shares sold off, dipping 4.5% as the company announced a secondary stock offering. The Internet radio provider will sell 10 million new shares while its biggest shareholder, Crosslink Capital, will sell 4 million of its own. The stock sale should dilute current shareholders by about 6%-7%. While investors never like to see their holdings diluted, the move looks like a smart one for Pandora with shares near an all-time high and Apple about to enter the fray with iTunes Radio. The company was vague on a potential use of the cash flow, saying it would go to general corporate purposes, working capital, and a potential acquisition.
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The article Why the Dow's Near Record Highs Again originally appeared on Fool.com.Fool contributor Jeremy Bowman owns shares of Apple. The Motley Fool recommends Pandora Media. It recommends and owns shares of Apple. 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 Motley Fool has a disclosure policy.