NEW YORK (TheStreet) -- Call it whatever you want -- a relief rally, an oversold bounce, short-covering -- Wednesday was the best day for stocks this year and Ben Bernanke doesn't want to do anything Thursday to ruin the good vibes.
The Federal Reserve chairman is giving testimony on the central bank's economic outlook and policy before the Senate's joint economic committee at 10 a.m. ET, and it's a good bet that speech is getting a strict going-over after Wall Street took the idea that more stimulus is forthcoming and ran with it, sending all three major U.S. equity indices up more than 2%.
The buying was strong right up into the closing bell as the Dow, S&P 500 and Nasdaq all finished at their highs of the day. The debate about what exactly the Fed might do though is more interesting. Federal Reserve Bank of Atlanta President Dennis Lockhart fueled much of the market's optimism with his comments on Wednesday but extending Operation Twist doesn't seem like all that much to get excited about.
The idea that a massive coordinated intervention by the world's central banks is in the works is getting some play as well, and the market would likely take off if that happened as a concrete plan for dealing with Europe's debt situation would presumably be on the table after years of ill-conceived quick fixes and obfuscation.Speculating on the structure and many moving parts of such an action is a tall order but Spain's rapid deterioration may well be enough to spur on that level of cooperation. On the other side of the argument, the United States getting heavily involved in a bailout of Europe is a hard sell in an election year with job creation starting to sputter a bit. QE3, another round of asset purchases, could be the happy medium. Either way, Mr. Bernanke's every utterance is going to be big news all month with the central bank's next policy meeting coming on June 19-20, right around when Greece goes to the polls. The historical track record for stocks during an election year is one of the underpinnings of the ultra-bullish stance that Canaccord Genuity U.S. equity strategist Tony Dwyer is maintaining with his year-end target of 1575 for the S&P 500, a level that implies potential upside of 20% from Wednesday's close at 1315.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV