The Dow Jones Industrial Average reversed a streak of three consecutive weekly losses and added 201 points on Friday. Why the gain? A declining dollar raised enthusiasm over future corporate earnings, while the markets saw better-than-expected results from Nike Corp. (NYSE: NKE) and a big report from a biotech leader. In addition to the gains of the Dow Jones today, the S&P 500 traded above 2,100, while the Nasdaq was back above 5,000.
Investors are keeping their focus on the Federal Reserve this week after the FOMC meeting, and will look to speeches from several members of the central bank next week for clues for the next rate increase.
The S&P 500 Volatility Index (VIX), the market's fear gauge, slumped 7.6% on the day.
Let's take a look at the scorecard from the Dow Jones today.
Today's Scorecard:
Dow: 18,127.65, +168.62, +0.94%
S&P 500: 2,108.10, +18.83, +0.90%
Nasdaq: 5,026.42, +34.04, +0.68%
What Moved the Stock Market Today: The markets were on the rise in part to a big announcement from drug maker Biogen Idec Inc. (Nasdaq: BIIB). Shares jumped more than 9.5% after the company released a positive report on its latest drug aimed at treating early-stage Alzheimer's disease. Although the preliminary study is early in its results, the promising drug has shown evidence of reducing cognitive decline. The iShares Nasdaq Biotechnology Index ETF (Nasdaq: IBB) was up 0.3% on the day.
Oil prices were in focus again today after Baker Hughes Inc. (NYSE: BHI) released its latest weekly rig count for U.S. producers. According to BHI data, the U.S. rig count declined by 5% last week, falling to its lowest level since March 2011. The U.S. rig count is falling at the fastest annual pace since 1986. The news sent WTI crude oil prices, to its biggest gain since February. U.S. crude prices jumped 4% on the day. Brent crude oil, priced in London, gained 1.3% to tick back above $55 per barrel.
Here's a breakdown of today's other top stories and stock performances:
Money Morning Tip of the Day: General Electric Co. (NYSE: GE) stock is a "Buy." It's a solid dividend payer that will see increased investor demand on several factors.
Today's tip comes from Money Morning Executive Editor Bill Patalon:
When a Wall Street investment bank, hedge-fund manager, or sell-side analyst starts backing a stock, it can attract the kind of liquidity that drives up its value in a big way.
And that's just what's happening with General Electric Co. (NYSE: GE), the makeover-in-progress conglomerate we first recommended in January 2014.
GE's shares have slipped about 4.75% since we recommended it (although we're at breakeven if you include dividends). So we may have been a bit early on our call.
But we weren't wrong.
We believe several factors - the surge in the U.S. dollar, the slowing global economy, and the odds that the Federal Reserve will soon raise interest rates - will bolster investor demand for stocks like GE. It's a solid dividend payer, a turnaround in the making, and a stealth player in some new markets.
Suddenly, we're not alone in our views on GE stock.
Tom Huber, who has run the T. Rowe Price Dividend Growth Fund (MUTF: PRDGX) since 2000, named GE as his "best stock pick" in a recent Barron's interview.
"After not owning General Electric for many years, we've come back to the stock in the past six months," he told the investment weekly. "It makes sense right now to own some large-cap, high-yielding names with durable businesses."
The current consensus on GE is $29 a share - with a high-water estimate of $33.
The bottom line: We've been saying for more than a year that GE is a stock you want to own. Now a heavy-hitter mutual-fund manager is telling folks the same thing.
To read more about why GE is a "Buy" right now, check out Patalon's recent Private Briefing column: A Big-Time Fund Manager Shares His "Best Pick"
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.