Now that the Dow Jones Industrial Average has broken the 14,300 barrier, the question is: Where will it stop? As investors flood back into the market on the strength of the Dow, it’s up to the index’s components to keep it afloat — and so far, so good. Yesterday was the day for tech stocks, and today a new leading sector is taking shape: financials.
Next week will be a big one for the nation’s banks. The Federal Reserve will be releasing the results of its “stress tests,” and the passing banks are sure to make big gains following the results. In the days leading up to next Thursday’s announcement, many of the banks are already seeing a boost from investors who want to get in before the crowd.
Bank of America Corp (NYSE:BAC), the most closely watch bank there is, has had a big influx in the past few days, as analysts believe it will pass the tests with flying colors. Because the results of the test will most likely effect B of A the most in terms of the bank’s standing with investors and ability to raise its dividend, you should expect to see the bank’s stock jump if the news next Thursday is positive. Shortly after noon, Bank of America Corp (NYSE:BAC) is up 2.3%, though there hasn’t been a lot of news to boost the stock prior to next week’s events. But with the stock’s volume way above average, it has a huge amount of volatility and can swing lower at a moment’s notice.
JPMorgan Chase & Co. (NYSE:JPM) is also up big today, gaining 1.4% to help the Dow see new heights. JPMorgan Chase & Co. (NYSE:JPM) was one of the only banks to make it through the financial crisis largely unscathed. And though it has had its hiccups since then (London Whale, anyone?), it is expected to pass the Fed’s stress test. Over the past year, the bank has been working to expand its presence in China and is now beginning to hire new employees for its operations there. JPMorgan’s Chinese investment bank is seeing greater demand for bond sales and investments in the country, even as China’s economic growth continues to slow.