How the Dow Got a Great Deal on Printer Ink
The Dow Jones Industrial Average finished at a new five-year high today, pushing past 14,000 to close at 14,035, and moving closer to its all-time high of 14,164. For the day, the index gained 54 points or 0.4%.
Today's gain seemed to be fueled by renewed merger rumors, following last week's bonanza that saw Berkshire Hathaway acquire Heinz and AMR and US Airways become one. Grabbing headlines today was the possibility of a merger between Office Depot and Office Max , which The Wall Street Journal reported were in merger talks and said official word could come as soon as this week. Shares of the two office-supply retailers soared on the news, as Office Depot finished up 9.3% and Office Max ended the day up 21%. Both retailers opened more than 30% higher.
Even industry leader Staples gained 13%, an odd move, given that its rivals seem to be teaming up against it. Staples' jump seems to be explained by the likelihood that the merger would lead to store closings, cost-cutting, and other forms of downsizing, leaving the new company leaner but less of a threat to the existing office-supply heavyweight.
Elsewhere in the market, Dell reported a 31% drop in profits in its fourth quarter. Since the computer maker is headed toward private hands, the news barely moved shares. Adjusted earnings of $0.40 a share still topped estimates by a penny, and revenue fell 11% to $14.3 billion but still edged out expectations of $14.1 billion. The results leave many in the market scratching their heads as to what the founder-led buyout could do to change the company's course. Shares of rival Hewlett-Packard were up 0.8% on the news.
Dow stocks were relatively quiet today. Alcoa was the biggest mover among the blue chips, falling 2.8%. The drop comes immediately following the aluminum maker's 4.3% jump as it reaped the rewards of the Chinese government's purchase of a stake in one of its joint ventures. Cisco Systems, meanwhile, was the biggest gainer on the Dow, climbing 2.2% to close at a 52-week high of $21.48. Shares are now up nearly 5% after opening lower following its earnings report last week.
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The article How the Dow Got a Great Deal on Printer Ink originally appeared on Fool.com.Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends Berkshire Hathaway, Cisco Systems, and H.J. Heinz and owns shares of Berkshire Hathaway and Staples. 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.