Wall Street bulls received two early Christmas presents today on a bounce in crude oil prices and the Federal Reserve’s pledge to be patient on raising interest rates.
This was all music to traders’ ears, and with Christmas around the corner, they went on a merry buying spree, sending the Dow Jones Industrial Average up more than 300 at one point.
Crude oil began the day about 2% lower, but reversed course when the U.S. Energy Information Administration said that crude oil inventories were only lower by about 800,000 barrels for the week ending Dec. 12. Analysts were expecting a decline of 2.5 million barrels, so the good news sent crude oil prices back up to $56.11. A large number of oil and other energy stocks then blasted higher, and the general market went along for the ride.
At the close, the Dow climbed nearly 1.7%, while the S&P 500 was 2% higher and the Nasdaq Composite rose 2.1%.
Energy, basic materials, and utilities were the strongest sectors today. Three stocks that beat most of the competition handily today were Continental Resources, Inc. (CLR), Volcano Corporation (VOLC), and Digital River, Inc. (DRIV).
Continental Resources, Inc. (CLR)
CLR stock stormed more than 12% higher today on the back of rising energy prices. CLR stock has recently dropped from $80 to $35 due to falling oil prices, so the Oklahoma City, Oklahoma developer and producer of crude oil and natural gas was, like so many other energy companies, due for a bounce in stock price on any good news, such as the better-than-expected news on oil inventories this morning.
The volume of 10.6 million shares was the highest for CLR stock in years.
Volcano Corporation (VOLC)
VOLC stock was a huge winner today amid word that Royal Philips has decided to acquire the San Diego-based medical imaging company for $1.2 billion in cash, and for $18 per share. Philips was most interested in Volcano’s catheter-based imaging technology, a medical device that is used during heart surgery.
VOLC stock was up more than 55% today on huge volume of 89.9 million shares.
Digital River, Inc. (DRIV)
DRIV stock has been struggling lately on fears that it might lose its digital distribution agreement with Microsoft Corporation (MSFT). The stock dropped from $26 to $16 in only seven days last week. But today, with the news that DRIV has agreed with Microsoft to extend their distribution partnership through March 2017, the stock shot up more than 42% on 5.7 million shares.
It’s safe to say that traders were greatly relieved by the news.
As of this writing, Ethan Roberts did not hold a position in any of the aforementioned securities.
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