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Tuesday, March 13, 2012

STOCKS GO WILD, US BANKS LEAD THE WAY: Here's What You Need To Know, March 13, 2012

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Tuesday, March 13, 2012

Wow.

First the scoreboard:

Dow: 13,177.6, +217.9, +1.6%
S&P 500: 1,395.9, +24.8, +1.8%
NASDAQ: 3,039.8, +56.2, +1.8%

And now the top stories:

There wasn't a huge amount of market moving news overseas. In Germany, the ZEW investor confidence index, surged to 22.3 from 5.4 in February. Economist were looking for the metric to climb to 10. Asian and European markets passed the baton to U.S. markets on a high note. LEAKED MEMO REVEALS: What A Greek Default Will Cost Europe And The World >
February retail sales climbed 1.1 percent, which was right in line with estimates. Excluding autos, retail sales climbed 0.9 percent which beat expectations for a 0.7 percent gain. The best news out of all of this was that January's headline retail sales growth number was revised up to 0.6 percent from a previous reading of 0.4 percent.
The Fed completed its Federal Open Market Committee meeting today. As everyone expected, not much happened. There was no change in rates, and the language signaled no major shift in monetary policy. Here's what they said about energy prices: "The recent increase in oil and gasoline prices will push up inflation temporarily, but the Committee anticipates that subsequently inflation will run at or below the rate that it judges most consistent with its dual mandate." There was no talk of new QE. This Is What It Means When People Talk About 'Sterilized' QE >
The FOMC also had some comments on jobs: "Labor market conditions have improved further; the unemployment rate has declined notably in recent months but remains elevated." But there are labor market skeptics out there. UBS's Art Cashin cited experts Doug Kass and Bill King who each saw major problems with the current structure of the labor market.
In other jobs news, the U.S. had 3.5 million job openings. This is according to the Bureau of Labor Statistics' Job Openings and Labor Turnover (JOLT) report. Economists estimated there would be 3.3 million openings.
The stock markets really exploded higher after JP Morgan unexpectedly announced a new $15 billion stock buyback program. It also boosted its quarterly dividend to $0.30 per share from $0.25 per share. This sent the markets a signal that JP Morgan probably passed its stress test (bank stress test results get announced on Thursday) with flying colors. Otherwise, the Federal Reserve wouldn't have allowed this to happen.
Shortly after JP Morgan's announcement, the Wall Street Journal reported that Bank of America passed its stress test. Other big winners in today's monster bank rally included Citigroup and Goldman Sachs.
Following the the JP Morgan and Bank of America headlines, the Federal Reserve announced that it would be releasing the results of its bank stress tests at 4:30 PM EST. The results were initially scheduled to come out on Thursday.
While we're on the subject of dividends, it's worth noting that cries for Apple to initiate a dividend are getting louder. Why Apple Investors All Need To Stop Whining About Not Getting A Dividend >
In other news, the EU, U.S., and Japan have asked the World Trade Organization to do something about China's rare earth export restrictions, which are causing prices to explode higher. Rare earth giant Molycorp traded slightly higher than the major stock indices.
Don't Miss: The 10 Countries With The Biggest Gold Reserves In The World >