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Market Recap: Banks and Tech Lead Rally, JPMorgan Calls the Shots, the Feds Play Catch-Up


Markets closed up on Wall Street today: 

Dow +1.68 percent

S&P+1.81 percent

Nasdaq +1.88 percent

Oil +0.35 percent

Gold -1.61 percent

On the commodities front:

Oil (NYSE:USO) rose to $106.71 a barrel

Precious metals:

Gold (NYSE:GLD) fell to $1,672.50 an ounce

Silver (NYSE:SLV) fell 1.43 percent to settle at $33.27

(Related: Who are the Biggest Beneficiaries of the $25 Billion Nationwide Mortgage Settlement?)

Today’s markets were up because:

1) Banks: Investors focused on shares of big banks today, one of two sectors (the other is tech) that tend to reflect an increased appetite for risk. Bank of America, Citigroup, and JPMorgan Chase led the market’s rally today, climbing more than 6 percent each.

2) JPMorgan: The bank closed the day up more than 7 percent after getting an extra push from the bank’s announcement that it would raise its dividend 20 percent and had authorized a $15 billion share repurchase plan. And then there’s this (via Business Insider):

At 4:30 PM today, the Fed will announce stress test results.

What's interesting is that they were supposed to come out on Thursday at 4:30 PM.

Why the change of schedule? Well, basically, JPMorgan came out with its announcement of dividends and buybacks around 3:00 PM. In that announcement they said they had passed the stress tests from the Fed, and that forced the Fed to move up their schedule.

...basically Jamie Dimon just called the shots, and the Fed was forced to play catchup.

The Fed has not yet made an official comment.

3) Tech: First Solar, Micron Technology, and JDS Uniphase were all strong today, leading an impressive tech rally that witnessed across-the-board gains for companies ranging from Intel to Apple to ARM Holdings. The Nasdaq rose 1.88 percent, outperforming the other two major U.S. markets, though the S&P 500 and Dow were helped by financials.

4) Fed: Markets were up all day but jumped higher in the last hour of trading after the Federal Reserve issued a fair outlook for the U.S. economy. As expected, policymakers chose not to implement any new stimulus programs, so few could be disappointed. And while the central bank remained cautious in giving its assessment of the current state of the economy, policymakers did give a more upbeat outlook for the job market and the global economy.

[Editor’s note: portions of the above are from a cross post that originally appeared on Wall St. Cheat Sheet.]

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