Stock Market Soars, Reveals Ben Bernanke’s Legacy
Wall Street Sector Selector | Jul 12, 2013 01:37AM ET
At the conclusion of the question-and-answer session following his speech before the National Bureau of Economic Research (NBER) in Cambridge, Massachusetts on Wednesday, Federal Reserve Chairman Ben Bernanke was asked what his legacy would be. On Thursday we saw the answer: record-high stock market levels. Earlier during the Q&A session, Dr. Bernanke noted that a “highly accommodative monetary policy” would remain in place “for the foreseeable future” because the current unemployment rate of 7.6 percent “overstates” the health of the economy. Those words were refreshing music to the ears of investors, who had been listening to nothing but The Taper Blues since June 19. As a result, Thursday became a classic “risk on” day, with investors buying every share which wasn’t nailed to the trading floor. The S&P 500 closed at a new record high and the Russell 2000 Index achieved its fifth consecutive record-high close.
The Department of Labor’s disappointing report on initial unemployment claims – which unexpectedly jumped to 360,000 – failed to dampen investor enthusiasm. A number of economists explained the increase as a seasonal anomaly resulting from furloughs caused by automobile plant shutdowns, while changes are made for the autumn release of next year’s models.
The Dow Jones Industrial Average (DIA) jumped 169 points to finish Thursday’s trading session at 15,460 for a 1.11 percent advance. The S&P 500 (SPY) surged 1.36 percent to a new record-high close at 1,675.02.
The Nasdaq 100 (QQQ) skyrocketed 1.96 percent to finish at 3,059. The Russell 2000 (Privacy Policy before accessing or using this or any other publication by Wall Street Sector Selector or Ridgeline Media Group, LLC.
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