The market started off weak this morning, with all three major indices dropping about 0.5% in early morning trading. This was largely due to the weaker-than-expected retail figures. Mr. Market then reversed course and decided things weren't that bad, and all three indices closed up for the day:
Gain / Loss
Gain / Loss %
Dow Jones Industrial Average (INDEX: ^DJI)
Nasdaq (INDEX: ^IXIC)
Even though the Dow was up a respectable 0.17% today, Alcoa (NYS: AA) was far more exuberant. The aluminum manufacturer put up a monster 3.12% gain for the day to close at $9.93. Alcoa was the first Dow component to report this earnings season, and investors were less than thrilled. The company announced a fourth quarter loss of $193 million, or ‒ $.03 cents per share. Analysts were projecting a $.02 loss.
But Alcoa's stock shook off the news and has surged 6.1% in the last five trading days. Despite that, Alcoa's shares still trade nearer to their 52-week low after a rough 2011. Being intrinsically linked with the macro economy, Alcoa could be a buy if you're bullish on the state of the world in 2012 -- especially if you buy their expectation of a 7% jump in global aluminum demand.
The other cool kids
Alcoa isn't the only stock on the Dow having a run at it today. Caterpillar (NYS: CAT) put up a solid 2.31% gain for the day. The heavy-machinery manufacturer got a favorable nod in a New York Times article this week which highlighted a North Carolina community college's training program being run for the company. The stock is up a ridiculous 12.5% over the last five trading days, yet still trades at a middle-of-the-ground P/E of 15.6.
Rounding out the biggest winners of the day is DuPont (NYS: DD) . The science and technology company climbed a hearty 1.69% for the day. In fact the broad chemical space was up today. DowChemical (NYS: DOW) rocketed up 3.6% today. Both are trading at P/E's near 13, and are still a ways off their 52-week highs.
There are certainly some Motley Fools that are bullish on du Pont too. Ilan Moscovitz calls it one of The Dow's 10 Biggest Bargain Stocks. He's cited the healthy earnings per share growth over the past half-decade as just one reason to like them. With their hearty 3.4% dividend yield and impressive free cash flow growth, he may be right.
The best approach
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At the time thisarticle was published Austin Smith owns shares of McDonalds.The Motley Fool owns shares of Microsoft.Motley Fool newsletter serviceshave recommended buying shares of McDonald's, Microsoft, and Walt Disney.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Microsoft. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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