Why the Dow Closed at Another 5-Year High
This has already been quite the year for equities. Thus far in January, the Dow Jones Industrial Average has already risen more than 4.6%. Not bad for three weeks of trading! If the index rises 4.6% every month this year, the Dow will have risen 72% by year's end, which serves to show the insane power of compounded returns.
Today the blue-chip index had to settle for far more meager 62-point gains, to close at 13,712. Still, if today's 0.46% advance happened every trading day this year, the market would more than triple by 2014, so there's really no need to complain.
Every day of trading has a certain theme. Whether it's economic data, political actions, or uncertainty, each day has its own catalysts. Today's catalyst was undoubtedly a slew of positive earnings reports. Leading the Dow higher with gains of 2.7%, UnitedHealth Group gained by virtue of an industry peer, Travelers, and its own great quarter. Last week, Wall Street was impressed with UnitedHealth's results; today, Travelers' earnings beat indicated that the insurance landscape may be healthier than previously expected.
Iconic soda company Coca-Cola fell today because of its decision not to seize on one of the very images that made it iconic. A Coke executive said today that during the Super Bowl -- perhaps the biggest advertising day of the year -- the company says it won't be featuring its polar bear spots, essentially because they did too well last year. Right ...
Elsewhere, a notable after-hours advancer was chip maker Advanced Micro Devices , which fell a crushing 10.2% on Friday after Intel's earnings disappointment. Apparently the fears that AMD's results today would follow suit with Intel were overblown, and despite widening losses and projected declining revenue, the stock was up more than 2% post-announcement.
Medical-devices company Intuitive Surgical also handily beat expectations Tuesday afternoon, and after hours the stock was trading as much as 8% higher. The innovative, high-tech business was driven by higher sales of its patented da Vinci Surgical System, which has been revolutionary in the health-care field. The $4.25 EPS figure blew the $4.03 estimates out of the water.
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The article Why the Dow Closed at Another 5-Year High originally appeared on Fool.com.
Fool contributor John Divine has no position in any stocks mentioned. You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.The Motley Fool recommends Coca-Cola, Intel, Intuitive Surgical, and UnitedHealth Group and owns shares of Intel and Intuitive Surgical. 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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