Why The Dow is Waiting for Tomorrow

At market open it looked like a good day for the market. All three indices were up in early morning trading, but quickly fell off to lunchtime lows. From there they fought back to ... basically flat.

Hurry up and wait
Of course, the big news today isn't really about today, it's tomorrow. A large number of Dow components, five to be exact, are reporting before market open. I imagine shareholders aren't keen about moving one way or another until they can get a beat on those major players. So which companies should investors watch tomorrow? Du Pont (NYS: DD) , McDonald's (NYS: MCD) , Johnson & Johnson (NYS: JNJ) , Verizon, and Travelers are all reporting before the bell, so look for a lot of pre-market movement.

What to Expect?
Du Pont is the first to announce with an early-bird-only 6:00 am earnings release. Wall Street is expecting $0.33 per share, a large drop from the $0.50 reported at this time last year. Trading at a P/E of 13.4, the company seems fairly priced, though.

McDonald's is expected to post $1.29, a nice jump from the $1.16 posted last year. After a stellar 2011, the golden arches are certainly looking for a repeat performance. It will be tough to do purely domestically, though, so watch for language about their growth in China.

Johnson & Johnson was plagued with product recalls in 2011, but it'll certainly take more than that to derail them. Trading for 15x earnings and sporting a 3.5% dividend, they are a great company no matter what. Whether they meet, miss, or beat tomorrow, this company is around for the long haul.

How to play earnings tomorrow
Trying to time earnings is exciting, gut wrenching, and stressful. While it can be fun from time to time, it's certainly not sustainable. If you're in the mood to pick up a great company to buy and hold for the long term, The Motley Fool has created a brand-new free report: "The Motley Fool's Top Stock for 2012."

The report features a company hand-selected by the Fool's chief investment officer that has a strong future ahead of it. I invite you to take a copy, available for a limited time. Get access to the report and find out the name of this legendary company. The report is free, but won't be forever, so check it out today!

At the time thisarticle was published Austin Smith owns shares of McDonald's The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter serviceshave recommended buying shares of Johnson & Johnson and McDonald's.Motley Fool newsletter serviceshave recommended creating a diagonal call position in Johnson & Johnson. 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.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.