We’re still two days away from finding out what the Federal Reserve has to say about the state of the economy and whether or not it plans to continue to support it through $85 billion in monthly bond purchases, but you wouldn’t know that from the big rally on our hands today.
It’s not uncommon for a Monday to be light on economic data. Perhaps the biggest bullish story moving the broad-based S&P 500 higher is the National Association of Home Builders Housing Market Index, which rose to 52 in June from 44 in May. This represents the highest reading since April 2006 and signals continued optimism among homebuilders that the fundamentals of the sector are getting better. As long as homebuilders keep inventory relatively low, they should be able to retain significant pricing power and easily pad their margins.
For the day, the S&P ended higher by 12.31 points (0.76%) to close at 1,639.04. The move higher was certainly strong given the lack of economic data, but the following three stocks vaulted significantly higher by comparison.
Leading the pack was streaming content kingpin Netflix, Inc. (NASDAQ:NFLX), which jumped 7.1% after announcing a gargantuan multiyear deal with DreamWorks Animation Skg Inc (NASDAQ:DWA). Although specific dollar amounts of the deal weren’t released, the two companies will cooperate to develop TV shows based on Shrek, Madagascar, and Kung Fu Panda. The deal is crucial for both companies as it gives Netflix a much larger child-based audience, while for DreamWorks it gives the company another mode of distributing content in between its blockbuster movies.
Adding 4.2% today despite no company-specific news was contracted oil and gas driller Nabors Industries Ltd. (NYSE:NBR). Nabors’ prospects are improving as the need for U.S. oil and natural gas grows. It also doesn’t hurt that fuel prices like oil and natural gas have been steady. If President Obama keeps pushing policies that favor domestic production, a driller like Nabors is only bound to see production improve and its bottom-line results are likely to head higher. With a recently initiated dividend, Nabors is a company worth keeping your eye on.