Why the Dow Surged for the Second Straight Day
The Dow Jones Industrial Average (INDEX: ^DJI) rallied again for the second straight day, helped up by more signals from Federal Reserve officials that interest rates will remain low for the foreseeable future, as well as by positive rumors out of China.
|Dow Jones Industrial Average||181.19 [1.41%]||12,986.58|
|Nasdaq (INDEX: ^IXIC)||39.09 [1.30%]||3,055.55|
|S&P 500||18.86 [1.38%]||1,387.57|
The Dow increased from the opening bell this morning, after rumors of better-than-expected first-quarter China GDP numbers due tonight. Those expected numbers have investors optimistic that the slowdown in China may not be as bad as expected. There was also some good news out of debt-plagued Europe as well, with yields on benchmark Italian and Spanish bonds dropping. Combining yesterday and today, the Dow's two-day gain of 2.1% is its best all year, erasing more than half of its losses after five straight days of declines.
By far the biggest winner today on the Dow was Hewlett-Packard (NYS: HPQ) , up 7.2%. Research firms Gartner and IDC reported that global PC shipments rose by around 2% in the first quarter, which was slightly ahead of expectations. HP remained the world's No. 1 PC maker by volume, with a worldwide market share of 17.2% (Gartner) to 18% (IDC). Apple (NAS: AAPL) was the third biggest PC maker in the U.S., with Dell taking the No. 2 spot. HP's PC shipments grew faster than even Apple's, and HP was more successful than other PC makers at getting its hands on hard drives, which were in short supply after the Thai floods.
Outside the Dow, tech giant Google (NAS: GOOG) reported earnings after the bell today that beat expectations. The company posted earnings per share of $10.88, which topped analyst expectations of $9.66. Notably, Google CEO Larry Page also announced a "new class of non-voting capital stock," which he said is "effectively a stock split." U.S. paid clicks for the company was 39% higher than a year earlier, but the average cost that Google earned from advertisers decreased by 12% from a year prior.
Google's solid earnings today are one example of why investors must keep close tabs on their favorite companies during earnings season. Our all-star team of analysts has included five of their favorite companies in our brand-new free report titled "5 Stocks Investors Need to Watch This Earnings Season." Included in the report are the names of a natural-gas company, a technology company, and a rapidly growing retailer that all could be poised to pop after they report earnings. Access the report for free!
At the time this article was published Brendan Byrnes owns shares of Apple. The Motley Fool owns shares of Google and Apple.Motley Fool newsletter serviceshave recommended buying shares of Google and Apple, writing covered calls on Dell, and creating a bull call spread position in Apple. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.