These Stocks Helped Cut the Dow's Losses

One sign of an optimistic stock market is when a morning plunge turns into a gain later in the day. That's exactly what happened early this afternoon. On a busy news day that included central bank rate cuts around the world, a version of quantitative easing in the U.K., and mixed economic news in the U.S., many analysts saw investors focusing on today's positive news from a report on private payroll figures. If that translates into a surprise in tomorrow's official government pronouncement on employment, it could push stocks higher. That optimism waned in the closing hours of trading, though, and the Dow Jones Industrials (INDEX: ^DJI) finished down 47 points.

More than half a dozen stocks closed higher on the day, however. Home Depot (NYS: HD) proved to be the big winner, up almost 1%. If there's any company that would benefit from higher employment and wage gains for the population at large, it's Home Depot. With its finger on the pulse of the average homeowner, Home Depot has navigated a tough housing market, and so actual improvement in the industry could push the stock up much further.

McDonald's (NYS: MCD) also held onto most of its gains, finishing up just less than 1%. As fellow Fool Russ Krull detailed earlier today, an environment in which bond investments yield so little makes McDonald's look extremely attractive, as its 3%+ yield and its dividend growth of faster than 10% annually since 2007 combine to give the stock a wide margin of safety.

Finally, Wal-Mart (NYS: WMT) finished up almost half a percent. Even amid a weak environment overall for retailers that led to disappointing results for Target (NYS: TGT) and other competitors, Wal-Mart has continued to recover from its long string of poor same-store sales over the past couple of years. Unlike most other stocks, Wal-Mart could actually benefit from a struggling economy, as shoppers again move down from pricier retailers to find more affordable options. With the Mexican bribery scandal thus far amounting to nothing substantial, Wal-Mart seems to be finally moving forward after being stagnant for a long time.

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At the time thisarticle was published Fool contributorDan Caplingerdoesn't own shares of the companies mentioned. You can follow him on Twitter@DanCaplinger. The Motley Fool owns shares of McDonald's.Motley Fool newsletter serviceshave recommended buying shares of McDonald's and Home Depot, as well as creating a diagonal call position in Wal-Mart. 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 Fool has adisclosure policy.

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