Why the Dow Bounced Back

The Dow Jones Industrial Average (INDEX: ^DJI) spent much of the day in the red, but a late rally pushed the index just barely into positive territory, closing with a gain of 2 points, or 0.02%. Let's take a look at the day's winners and losers.

Industrial giant Caterpillar (NYS: CAT) opened the trading session lower after cutting its 2012 forecast for the second time this year, but it finished up 1.5% for the day. The construction equipment-maker revised its EPS guidance down to a range of $9 to $9.25 a share from $9.60, said 2013 revenue growth would be flat, and announced that its order backlog fell 18% to $23.1 billion. However, the company did express optimism about growth in 2014 and 2015, and investors seemed to view the early setback as a buying opportunity as the manufacturer's stock is relatively cheap at a forward P/E of 8. Caterpillar also beat earnings estimates, thanks in part to a gain on the sale of a logistics division.

Other winners on the Dow included Hewlett-Packard (NYS: HPQ) , which climbed 1.6% after announcing that it won't renew its deal with Violin Memory to sell solid-state storage devices and will instead focus on selling equipment from its own subsidiary, 3PAR. The highly anticipated release of Windows 8 later this week could have added an additional boost to HP.

UnitedHealth Group (NYS: UNH) also jumped 1.6% after raising $2.5 billion through low-interest notes toward its acquisition of Brazilian health insurer Amil.

Microsoft (NAS: MSFT) , meanwhile, led the Dow losers, falling 2.3% as pessimism about the release of its Surface tablet and Windows 8 operating system seemed to build following last week's disappointing earnings release. At the other end of the tech space, rival Apple (NAS: AAPL) jumped 4% over anticipation of its iPad Mini release tomorrow. Investors are hoping for redemption from the lackluster iPhone 5 rollout, which was undermined by complaints about Apple Maps. Also propelling the iPhone's maker's gain were two investment houses reiterating bullish price targets and optimism about strong fourth-quarter earnings.

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Jeremy Bowman owns shares of Apple. The Motley Fool owns shares of Apple and Microsoft. Motley Fool newsletter services recommend Apple, Microsoft, and UnitedHealth Group. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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