Dow Recovers From Early Fall
After opening lower and then immediately dropping further, the Dow Jones Industrial Average has climbed its way back up to breakeven. The index is hovering just above yesterday's new all-time-high closing. With some good news from the housing market, the Dow may have the support it needs to close at another high today.
Housing rebound continues
The weekly report for new mortgage and refinancing applications showed strong growth, with the index improving by 7% versus the prior week. Thought the improvement was driven mostly by refinancing activity, the index still shows an increase in demand for new mortgages, largely due to continued low interest rates.
This news has helped the financials within the Dow this morning, as both Bank of America and JPMorgan are on the rise. Bank of America, up 1.4% as of 11:30 a.m. EDT, has been looking to expand its presence in the mortgage market, with its first-quarter results showing some progress. The bank has been plagued with legal battles over its acquired Countrywide division, a stand-alone mortgage originator that fell into duress during the financial crisis. JPMorgan, on the other hand, has been in the No. 2 spot for mortgage origination since last year. During its first-quarter earnings call, CEO Jamie Dimon said that he expected to see some slowdown on the mortgage front, as the bank had seen a drop in mortgage revenue during the first three months of 2013.
JPMorgan has been dealing with some other issues lately, but some announcements today may have investors breathing a sigh of relief. After another top executive left the bank, many on Wall Street wondered how the bank would handle its succession plans. This morning, JPM announced that Erik Bisso would be the chief investment officer for North American operations, in what was called a demonstration of ongoing commitment to developing senior talent. While Bisso wouldn't be front-runner in the line of succession, it does give investors some sense that the bank has enough good talent to fill any vacancies easily.
A surprising loser
After announcing second-quarter earnings yesterday, Walt Disney is down 1.63%, the biggest of the Dow's nine losers as of 11:30 a.m. EDT. What makes this surprising is that Disney had reported impressive increases in overall revenue, earnings, and EPS. With higher revenue from its theme parks, media companies, and movies, Disney had a 10% increase in revenue for its second quarter. And all of the company's operating units reported profit growth except the interactive segment, which has been struggling. The company has already announced cuts in the gaming unit, as well as a new collaboration with Electronic Arts to develop new Star Wars games. Though Disney's ABC network has had some declines due to higher prime-time programming costs and drops in advertising revenue, its ESPN networks have more than made up for it.
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The article Dow Recovers From Early Fall originally appeared on Fool.com.Fool contributor Jessica Alling has no position in any stocks mentioned -- you can contact her here. The Motley Fool recommends Walt Disney. The Motley Fool owns shares of Bank of America, JPMorgan Chase & Co., and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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