Dow Spikes 245 to Multi-Year High on ECB, Jobs Data

Steven Bobson, Europe & Americas Editor
September 07, 2012 /

The Dow Jones Industrial Average (DJI) was up roughly 246 points yesterday, and by the close, the blue-chip barometer solidified a near five-year best settlement.

As Schaeffer’s Senior Equities Analyst Joe Bell points out, yesterday’s action centered around the European Central Bank (ECB) president: “This morning, Mr. Draghi confirmed the rumors and announced that the ECB would buy bonds with maturities shorter than three years. Throw in the news of better-than-expected jobs numbers on the domestic front, and you have a lot of participants buying hand over fist.”

The Dow Jones Industrial Average (DJI – 13,292.00) rocketed to its intraday acme of 13,294.13, and maintained all but a few points of this upswing, advancing 244 points, or 1.9%, by the time the dust settled. All 30 blue chips took a step higher today, with Bank of America ( BAC ) and Cisco Systems, Inc. ( CSCO ) leading the bullish parade with gains of 5% and 4.4%, respectively.

In last-minute trading, the S&P 500 Index (SPX – 1,432.12) ran to a more than four-year acme, adding 28.7 points, or 2%, by the closing bell.

Turning in the best performance of its fellow benchmarks, the Nasdaq Composite (COMP – 3,135.81) rallied 66.5 points, or 2.2%, to settle at its highest perch since mid-November 2000.

The CBOE Market Volatility Index (VIX – 15.60) dipped to its lowest close in almost two weeks, peeling back 2.1 points, or 12.1% on the day.

“I’m not sure if the vocal bears know , but this market just made a new four-and-a-half-year high this morning,” said Bell. “Despite the constant naysayers, the resilience of this market has been incredible as the steady uptrend continues.”

Crude futures turned higher for a second straight day, following the Energy Information Administration (EIA) report of a bigger-than-projected drop in weekly crude supplies. The commodity also found support from the European Central Bank’s (ECB) bond-buying program, as well as the upbeat jobs data and payroll report.

Although the rally weakened as the session wore on, October-dated oil added 17 cents, or 0.2%, to end at $95.53 a barrel.

The ECB’s plan to aid economically strapped euro-zone nations also buoyed gold futures today. While the euro strengthened with the news, gold for December delivery gained $11.60, or 0.7%, to settle at $1,705.60 an ounce. This marked precious metal’s highest point since March 9.

 

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