Wednesday brought the week having all three days with a gain or a loss of triple-digits during the day in the Dow Jones Industrial Average. Bank earnings were the key driver, and a slightly elevated core-reading on the Producer Price Index failed to distract the bulls. Earnings season is getting into full gear and the earnings floodgates open wide next week.
What really stood out was another new all-time high of just over 1,850 for the S&P 500 Index earlier in the day and a high on the NASDAQ going back to highs not seen since the dot-com and tech bubble seen more than a decade ago.
The unofficial closing bell readings will change from official closing levels, but these were as follows:
- DJIA +108.08 at 16,481.94
- S&P 500 +9.50 at 1,848.38
- NASDAQ +31.87 at 4,214.88
The big bank earnings winner was former DJIA component Bank of America Corp. (NYSE: BAC). While JPMorgan and Wells Fargo had mixed earnings on Tuesday, BofA handily beat its earnings estimates when it reported on Wednesday. Shares were up 2.3% at $17.16 in the final minutes, but this marked a new 52-week high and the stock hit a high of $17.42. While BofA is not a DJIA stock any longer, this helped to propel J.P. Morgan Chase & Co. (NYSE: JPM) higher and Jamie Dimon can send Brian Moynihan a thank you letter. J.P. Morgan shares were up 3.2% at $59.58 right before the closing bell.
Verizon Communications Inc. (NYSE: VZ) spent Wednesday getting the gain you might have expected on Tuesday. This was the day after the FCC ruled in its favor over the so-called Net Neutrality. This is still a work in progress and may take months (or longer) just to get a new ruling opinion down the road. Verizon shares were up 2.5% at $48.25 in the final minutes of trading.
Microsoft Corp. (NASDAQ: MSFT) rallied sharply on Wednesday, perhaps on a Bloomberg video showing a larger Windows tablet market for 2014. Another boost is that Microsoft is reportedly spending more than $2 billion to try to bring in Samsung and other phone makers into developing more with its mobile Windows smartphones. Microsoft shares were up 2.75% at $36.76 right before the closing bell.
Caterpillar Inc. (NYSE: CAT) was another winner, on hopes of larger domestic orders rather than just on hopes of international orders. This was ahead of the dividend payment, and was a day after the company pressed Congress to develop legislation to enhance infrastructure. Caterpillar shares were up 2% at $92.41 right before the closing bell.
Watch out for key earnings yet again on Thursday: Citigroup, Goldman Sachs, and American Express lead financial earnings; also on deck are UnitedHealth and Intel. The economic calendar for Thursday has weekly jobless claims, Treasury capital holdings, Consumer Price Index (inflation), and the Philly Fed all on deck.