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Investments

HW 30 rallies amid political progress

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Stocks

Lawmakers seemed to move closer to resolving the stalemate on Capitol Hill, resulting in all three stock indices and the HW 30 rallying, as investors reacted to the positive news.

The Dow Jones Industrial Average soared more than 300 points with the majority of stocks in positive territory.

Additionally, the S&P 500 and the Nasdaq closed up 2% each, logging record high yearly gains.

The HW 30 — a composite list of mortgage finance and housing stocks — fed off the positive chatter. With the exception of two, all stocks listed on the HW 30 finished higher as a political compromise inched closer, causing home improvement companies and banking institutions to finish Thursday with higher numbers.

Home improvement company Home Depot (HD) finished the day strong, up 1.73% and also up 2.53% for the month. Additionally, Lowes (LOW) soared, closing up 2.32% for the day and is also up 2.27% for the month.

The progress for these home improvement companies comes at a good time when homeowners are watching their home equity levels rise, signaling more opportunity for housing projects.

To put it into perspective, homeowners watched their equity increase $571 billion in the second quarter of 2013, and $2.2 trillion over the past year, according to research firm Compass Point Research & Trading.

On a similar note, mega banks finished Thursday significantly up, with JPMorgan Chase (JPM) leading the way, soaring 3%.

Market analysts began predicting the best bets for investors after rumors surfaced that President Obama has placed Federal Reserve vice chairman Janet Yellen as his nominee for Fed chair.

Money Morning chief investment strategist Keith Fitz-Gerald pointed out that investment banks are the best stocks to dive into before the central bank begins taping its bond-buying program.

He believes major banks are largely immune from political gridlock, pay high dividends and give investors a good place to act defensively while “Washington steps all over itself.”

Following in line with JPMorgan, Bank of America (BAC) closed the day up 2.60%, while Wells Fargo (WFC) also soared, up 2.32% for Thursday. 

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