Winners and Losers of the Fed's Unlimited QE3

Equities Editors Desk  |

News of the Federal Reserve's unlimited QE3 program helped the market extend its run up past multi-year highs. In addition, the Fed also said it expects slow economic growth through 2014, and unemployment to remain above 7 percent. In addition to QE3, it was also continue Operation Twist and keeping key interest rates at historically low levels.

Though the Fed has done its part, Chairman Ben Bernanke also acknowledged that for the market and economy to continue to stabilize and recover, it will need help--particularly from Congress and addressing the impending fiscal cliff.

While there are still several months until the steep budget cuts would take effect if not dealt with, the market for now is enjoying its new stimulus buffet. Here are several areas that could potentially benefit most from the Fed's open-ended approach.

Gold and Silver

The SPDR Gold Shares (GLD) and iShares Silver Trust (SLV) both popped higher by about 2 percent as those speculating on more stimulus finally got the pay off they were hoping for. Gold and silver stocks such as Barrick Gold (ABX), Newmont Mining (NEM), and Hecla Mining (HL) all did even better. Barrick is up 4.5 percent, Newmont was up as much as 6.2 percent, and Hecla is up over 7 percent.

Financial Stocks

The Financial Select Sector SPDR (XLF) jumped up about 2.5 percent higher, while major banks like Bank of America (BAC), Wells Fargo (WFC), and JP Morgan (JPM) led the way.

Consumer and Housing Stocks

While Bernanke acknowledge that near-zero interest rates punished savers, it did encourage consumers and businesses to invest and spend more. One particular area would be large purchases like homes and autos. Housing stocks like Tollbrothers (TOL), Pulte Homes (PHM), and Lennar (LEN) moved higher on the news, as did General Motors (GM), Ford (F) and Toyota (TM).

Dividend Stocks

Similarly, safe investments like low-yielding treasuries and money market accounts will be even less attractive now with no hope of rates increasing until at least mid-2015. Dividend stocks that offer both much better yields and the potential for capital appreciation become more enticing for investors. Companies like Chevron (CVX), which doubles as an oil play for economic recovery--AT&T (T), and Dow Chemical (DOW) are among the stocks paying over a 3 percent yield that have done well on the news.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.

Companies

Symbol Name Price Change % Volume
TM Toyota Motor Corporation 136.56 0.01 0.01 101,678 Trade
CVX Chevron Corporation 124.32 0.66 0.53 10,524,616 Trade
TOL Toll Brothers Inc. 39.00 -0.13 -0.33 2,638,375 Trade
ABX GOLD Barrick Gold Corporation (BC) n/a n/a n/a 0
GM General Motors Company 37.37 -0.41 -1.09 18,827,409 Trade
BAC Bank of America Corporation 29.59 -0.23 -0.77 167,795,072 Trade
HL Hecla Mining Company 1.98 0.10 5.32 9,584,034 Trade
LEN Lennar Corporation Class A 54.10 0.31 0.58 2,665,363 Trade
F Ford Motor Company 9.17 0.07 0.77 38,117,099 Trade
WFC Wells Fargo & Company 48.63 -0.28 -0.57 30,451,103 Trade
PHM PulteGroup Inc. 35.68 0.22 0.62 3,793,281 Trade
T AT&T Inc. 37.91 0.76 2.05 79,104,102 Trade
NEM Newmont Goldcorp Corporation 39.84 0.45 1.14 8,365,819 Trade
JPM JP Morgan Chase & Co. 118.90 -0.48 -0.40 22,076,823 Trade

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