Two pieces of long-awaited news both gave investors hints of things yet to come on the geopolitical front. Greece finally got its austerity plan through its parliament, but not without rioting and general unrest among its populace. Meanwhile, the Obama administration introduced a new budget that would end decade-long tax cuts for high-income earners and replace the dreaded Alternative Minimum Tax with the so-called Buffett Rule. The Dow Jones Industrials (INDEX: ^DJI) finished the day up 73 points to 12,874.
Most of the stocks in the Dow rose on the day. Let's take a look at three of them.
Bank of America (NYS: BAC) , up 2.2%
The lowest-priced stock in the Dow has acted as a barometer of the financial system lately. After a horrendous 2011, B of A has soared so far this year, and it's clearly benefiting from renewed optimism about the European economic situation.
In an interview today, investor Bruce Berkowitz, whose Fairholme Capital Management has a huge position in B of A, said that the bank should be able to address its challenging Countrywide mortgage unit successfully. After all the huge losses that B of A has taken from Countrywide, that sort of payoff would be extremely heartening for long-suffering shareholders.
United Technologies (NYS: UTX) , up 1.7%
Bad news often rocks stocks. Sometimes, though, news that isn't quite as bad as expected can actually help.
United Tech was expected to take a hit from budget cuts for a long time, so today's proposed budget from the Pentagon didn't really surprise anyone. The budget includes a reduction in the Lockheed Martin (NYS: LMT) F-35 Joint Strike Fighter by $1.6 billion in the government's fiscal 2013. That represents the elimination of 13 F-35 aircraft. Yet Lockheed's stock moved up today, and United Tech, which makes the engines for the F-35, saw an even bigger boost. Apparently, investors were concerned that even deeper cuts might be coming.
Home Depot (NYS: HD) , up 1.3%
You wouldn't think it from the current economy, but Home Depot is trading at levels it hasn't seen in a decade. Along with homebuilder stocks, the home-improvement big-box store has seen its shares soar well over 50% since August.
Trading at almost 20 times earnings, Home Depot may be starting to get ahead of itself. Yet with those earnings arguably depressed from a weak economy, the company should have significant growth potential -- potential that could finally prove skeptics wrong and translate into even higher prices down the road.
What will tomorrow bring?
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At the time thisarticle was published Fool contributorDan Caplingerwants you to be a winner. You can follow him onTwitter. He doesn't own shares of the companies mentioned in this article. The Motley Fool owns shares of Bank of America and Lockheed Martin.Motley Fool newsletter serviceshave recommended buying shares of Home Depot. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Fool'sdisclosure policyis always a winner.
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