These Dow Stocks Won for the Right Reasons

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Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

This article features Nike, Microsoft, Ford, and Pfizer. Fool contributor Dan Caplinger doesn't own shares of Nike, Microsoft, Ford, or Pfizer. The Motley Fool recommends Ford and Nike. The Motley Fool owns shares of Ford, Microsoft, and Nike.

Too often, investors focus too much on short-term concerns that have little chance to ballooning into long-term threats. For instance, the current fears about the potential shutdown of the U.S. government left investors on edge, helping to send the Dow Jones Industrials to their fourth daily loss for the week, finishing down 70 points.

It's not unreasonable to think that a possible shutdown would have some measurable effect on the economy. But for those with a truly long-term perspective, all but the absolute worst-case scenarios wouldn't have any lasting impact on economic growth prospects in general, or on particular companies and their stocks. Bidding down share prices, therefore, doesn't make much sense, especially for companies with strong prospects.

Several of the Dow's winners stuck to that longer-term view in pushing higher. Admittedly, Nike's 4.7% jump was partially driven by short-term investors' focus on quarterly earnings, which, in the athletic shoe and apparel giant's case, were quite impressive. Yet, the share-price rise also reflected enthusiasm about Nike's future, especially as it has weathered a substantial storm from revenue compression in China to keep its core North American market strong. Nike's strength bodes well for many of its U.S. peers that are hoping not to have to rely on China's faster GDP growth rates to bolster their success.

Microsoft's 1.5% gain also has the long-term future in mind, as investors speculate about whether turnaround specialist Alan Mulally will leave Ford to join the beleaguered tech giant. Mulally's success at Ford has been extraordinary, helping the automaker avoid the stigma of bankruptcy that both of its Big 3 peers went through, and returning Ford to profitability. Although some will argue that Microsoft needs someone more familiar with the tech business at the helm, the message the company should hear loud and clear is that shareholders want someone who can recognize long-term challenges for Microsoft, and solve them favorably.

Finally, Pfizer overcame controversy over its Tygacil antibiotic drug to finish up 1.25%. The FDA said that new findings about Tygacil supported its earlier assertion that Tygacil had greater risk of death than similar drugs and, as a result, the FDA will require Pfizer to issue a warning on the drug's label. Yet, while shareholders might have taken the news as an opportunity to push share prices sharply lower, they instead focused more on the drugmaker's overall favorable prospects. In recognizing that the incident is relatively minor in terms of the scale of Pfizer's business, investors put the Tygacil problems in the proper perspective.

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Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. 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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