Wall Street Continues to Climb on the Fed’s Stimulus Promise
The Dow Jones Industrial Average (DJI) claimed another multi-year high today, as investors continued to ride yesterday’s Fed-inspired rally, albeit on a much more subdued level.
“Today is simply a continuation of the strength we saw yesterday,” said Schaeffer’s Senior Technical Strategist Ryan Detrick. “While everyone is trying to figure out what QE3 means to the economy, stocks have spoken, and they like it. At the same time, hedge funds have totally dropped the ball and missed most of this rally. There’s a good chance these Johnny-come-latelies could be the fuel for the next surge higher.”
The Dow Jones Industrial Average (DJI – 13,593.37) rose to an intraday peak of 13,653.24 early in the session, before gradually paring its gains throughout the afternoon. By day’s end, the blue-chip barometer was up 54 points, or 0.4%, finishing at yet another multi-year high.
The Dow’s 19 advancers were led by Caterpillar Inc. ( CAT ), which gained 2.8%, while AT&T Inc. ( T ) and Merck & Co., Inc. ( MRK ) led the 11 decliners with losses of 2.3% each. For the week, the Dow added 2.2%.
The S&P 500 Index (SPX – 1,465.77) tagged a fresh high of 1,474.51 this morning, marking its highest peak in almost five years. Although the SPX pulled back to finish just 6 points, or 0.4%, higher, it still closed atop the 1,450 level for a second consecutive session — and ended the week with an advance of 1.9%.
Meanwhile, the Nasdaq Composite (COMP – 3,183.95) notched another decade-plus high of 3,195.67 before trimming its intraday advance to 28 points, or 0.9%, and closing a sixth straight session above 3,100. The COMP wrapped up the week with a climb of 1.5%.
The CBOE Market Volatility Index (VIX – 14.51) added 0.5 point, or 3.3%, regaining just enough ground to close back atop the 14.50 level.
“I might sound like a broken record, but when the iShares Russell 2000 Index (ETF) (NYSEARCA:IWM) hits a new all-time peak — and various housing names are breaking out to multi-year highs — that, my friends, is bullish,” commented Ryan. “Coupled with bonds taking it on the chin again, we could be on the verge of a huge move out of bonds and into stocks.”
Crude oil enjoyed a brief surge into triple-digit territory today, as a weaker U.S. dollar and heightened Middle-Eastern anxieties combined to create a strong bid for the commodity. October-dated crude edged up 69 cents, or 0.7%, to finish at $99 per barrel, after earlier topping out at $100.42. For the week, oil gained 2.7%.
Gold futures also finished higher, building on Thursday’s Fed-inspired rally. By the close, gold for December delivery was up 60 cents at $1,772.10 per ounce — its highest daily finish in six months. The precious metal rose 1.9% for the week.