It was a bit of a roller coaster ride yesterday, as the chart above shows. Strong earnings from Dell and Deere got the rally going, which was derailed shortly thereafter based on news reports that two Iranian warships were passing through the Suez Canal on their way to Syria.
Gold and oil rallied while the markets sold off, but they later regained footing as fears of a provocation subsided. Stepping in to lend an assist to market direction was the Fed by boosting their 2011 economic forecast to the 3.4% to 3.9% range, which was up from November’s announcement of 3% to 3.6%. The unemployment rate was projected to drop into the 8% to 9% range by yearend and below 8% next year.
That was all Wall Street need to hear, the cheering started, and the major indexes pulled off their lows and closed solidly above the unchanged line. Even the recently beaten down emerging markets participated while energy recovered from Tuesday’s pullback.