Dow 14,000: Why It Jumped 120 Points Today


How does this market deal with a two-day slide that sparked worries of a serious correction? It rallies, of course. A reassuring report about business confidence in Germany -- one of the few thriving economies in Europe -- convinced Wall Street that the global recovery hasn't been compromised. An optimistic Dow Jones Industrial Average added just under 120 points, or 0.86%, to close at 14,000 on the dot.

Another major factor in today's bullishness came from impressive corporate earnings. And few earnings were more bullish than Hewlett-Packard's results, which were robust enough to send the stock soaring 12.3%. Cost-cutting measures undertaken by CEO Meg Whitman seem to have made more of a difference than analysts imagined. For the time being, the admitted "turnaround" play seems to have quite the sharp turning radius.

The only blue chip to lose more than 1% today, UnitedHealth Group , ended as the Dow's biggest loser, slipping 1.4%. Though the stock was upgraded by Oppenheimer yesterday, a report from the U.S. Department of Health today sparked concerns that health insurance companies will be hurt by 2010's Affordable Care Act. The act requires requested increases of 10% or more in premiums to be reviewed by government regulators, and fewer such requests were made last year, the data show.

Outside the Dow, online streaming service Netflix's stock fell 3.9%, two days after a 4.7% decline following news of a lawsuit against the company. The lawsuit claims that statements made last July by CEO Reed Hastings on the company's Facebook account misled the public about Netflix's growth prospects. Shareholders aren't enthused, especially since the SEC is also considering bringing a lawsuit.

Finally, shares of 3D Systems added 3.8% Friday, a day after a massive 8.4% slump. The 3-D printing company reports its quarterly results on Monday, and today's market seemed to think that yesterday's sell-off was overdone. With average earnings growth at nearly 100% per year over the last five years, this is the epitome of a high-growth, high-volatility stock.

3D Systems is at the leading edge of a disruptive technological revolution, with the broadest portfolio of 3-D printers in the industry. However, despite years of earnings growth, 3D Systems' share price has risen even faster, and today the company sports a dizzying valuation. To help investors decide whether the future of additive manufacturing is bright enough to justify the lofty price tag on the company's shares, The Motley Fool has compiled a premium research report on whether 3D Systems is a buy right now. In our report, we take a close look at 3D Systems' opportunities, risks, and critical factors for growth. You'll also find reasons to buy or sell, and receive a full year of analyst updates with the report. To start reading, simply click here now for instant access.

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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 3D Systems, Facebook, Netflix, and UnitedHealth Group. The Motley Fool owns shares of 3D Systems, Facebook, and Netflix and has the following options: short Jan 2014 $55 calls on 3D Systems and short Jan 2014 $30 puts on 3D Systems. 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 Motley Fool has a disclosure policy.

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