Why the Dow's Finally Higher This Morning
After six straight days of losses for the Dow Jones Industrials (INDEX: ^DJI) , investors must have decided it was time for a break from the bearishness. Despite no real resolution to concerns in Europe, stocks rebounded, as investors started to reflect back on an earnings season in which about two-thirds of the companies reporting so far have beaten estimates. Weekly jobless claims in the U.S. were down, but growth in Chinese trade activity was far weaker than expected, with imports rising only 0.3% in April. At 10:45 a.m. EDT, the Dow was up about 0.4%.
The big mover on the Dow was Cisco Systems (NAS: CSCO) , which fell more than 8% after the networking company barely beat earnings estimates for its fiscal third quarter but gave negative guidance about the coming quarter. A flurry of price-target cuts from Wall Street analysts ensued, and some fear that Cisco's poor outlook could bode ill for the entire industry.
On the up side, General Electric (NYS: GE) rose more than 1%. As Fool industrials analyst Isaac Pino discussed this morning, GE is looking to bolster its global presence by meeting infrastructure needs around the world in response to rising standards of living in emerging-market economies. At the same time, GE's energy business has become increasingly important, as the company capitalizes on low natural gas prices to support a network of CNG fueling stations and sell natural-gas-fired turbines.
Finally, energy stocks in the Dow are rising, with Chevron (NYS: CVX) up more than 1% and ExxonMobil (NYS: XOM) slightly higher. After falling well below the $100-per-barrel mark over the past week, oil prices climbed by about $0.50 today. But longer term, with new production springing up around the world and troublesome signs of a possible economic slowdown, further price declines aren't out of the question -- and they could put renewed pressure on both Exxon and Chevron.
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At the time this article was published Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. You can follow him on Twitter here. The Motley Fool owns shares of Cisco Systems. Motley Fool newsletter services have recommended buying shares of ExxonMobil and Chevron. 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 Fool has a disclosure policy.