The Dow Jones Industrial Average (DJIA) gained 194 points Tuesday to end the stock market trading session at 13,115.54; a daily increase of 1.5 percent from Monday’s closing level of 12,921.41. The nearly 200 point jump represented the market’s biggest daily boost in over a month.
All 30 blue chip component stocks ended the session in positive territory Tuesday, led by The Walt Disney Company (NYSE:DIS), Kraft Foods Inc. (NYSE:KFT) and International Business Machines Corp. (NYSE:IBM), which experienced market value increases of 2.45%, 2.39% and 2.33% respectively.
In a Bloomberg.com article published Tuesday, ING Investment Management Asset Allocation Chief Paul Zemsky said, “The market was able to shrug off disappointing U.S. economic reports. We’ve got data showing the German economy is growing strong, positive earnings surprises in the U.S. and some good news out of Spain. There’s a lot of room for positive surprises given how pessimistic things were.”
Spanish Bond Auction
Yields for Spanish sovereign bonds dropped Tuesday due to a successful bond auction which resulted in the struggling EU nation unloading €3.2 billion in paper debt. The mark was above analysts estimates of €3.0 billion and yields on 10-year notes fell to 5.89 percent; slightly reducing sovereign borrowing costs for the red and gold sovereign.
BlackRock investment strategist Jeffrey Rosenberg wrote in a note Tuesday, “High quality global journalism requires investment. Spain’s larger size and obvious spillover effects to Italy argue for a faster policy response. However, the bitter experience of this past year’s crisis response [shows that] policy makers in Europe tend to let events be dictated to them rather than proactively dictate the outcome.”
The Bank of Spain announced Tuesday that it will allocate €53.8 billion to compensate for losses related to new government regulations on real estate assets. “The cleanup required by the new Royal Decree-Law has already been or will be carried out by most credit institutions without major difficulty,” said the Bank of Spain. Yields for U.S. Treasury notes meanwhile rose 4 basis points to 2.01 percent on 10-year debt.
Apple Stock Recovers, Gains 5 Percent
Shares for tech giant Apple Inc. (NASDAQ:AAPL) gained 5 percent Tuesday, marking a significant recovery for the stock. At the 4:00pm Eastern Time closing bell, Apple shares were trading at $609.70; up nearly $30 from Monday’s close.
Apple stock has traded in a 52-week range of $310.50 to $644.00. With a market capitalization of $568.74 billion and a Price To Earnings Ratio of 17.36, many analysts believe there is still plenty of room for short term upward momentum for the company, which is set to release Apple TV in a couple of months.
Buffett Has Prostate Cancer
In separate news Tuesday, Bloomberg.com announced that financier Warren Buffett has Stage 1 Prostate Cancer. The article quoted Buffett saying, “I feel great – as if I were in my normal excellent health – and my energy level is 100 percent. I will let shareholders know immediately should my health situation change. Eventually, of course, it will; but I believe that day is a long way off.”
The Berkshire Hathaway Inc. chairman has been an icon in global markets for well over a decade and is also the namesake of a new law currency before Congress called the Buffett Rule. If passed, the regulation would theoretically level out the annual tax rates paid by American citizens by forcing the wealthy to pay the IRS a higher percentage of overall income.
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