The 4 Stocks Driving the Dow to Repeat Records


On March 5, the Dow Jones Industrials set a new all-time record high for the first time in more than five years. Since then, though, the Dow has advanced to yet higher records 17 times, with yesterday's new record marking gains of more than 850 points from the March 5 close.

Many investors thought that as soon as the Dow finally matched its late-2007 highs, it would inevitably have to correct. But thanks to some extremely strong performance from some of its component stocks, the Dow has been able to keep moving higher. Let's take a look at the four stocks that have advanced the most since the Dow's initial March 5 record close.

Boeing , up 20.4%
For Boeing to top the list of Dow performers since early March comes as little surprise to those who've followed the tale of the beleaguered aircraft maker. Two months ago, Boeing was still embroiled in the controversy over its 787 Dreamliner aircraft, which had been grounded because of fire risks in its lithium-ion battery systems. Yet the company has now gotten FAA approval for a solution to the battery problem, and airlines in the U.S. and Japan expect to start flying their aircraft again in the next month. With the 787 episode hopefully behind it, Boeing can focus once more on meeting production quotas and getting its backlog of orders worked down.

Disney , up 19%
For Disney, the biggest news over the past two months has been the successful release of its blockbuster Iron Man 3, which had already done extremely well internationally even before its May 3 U.S. release. Yet Disney has even greater potential ahead, as it starts to digest its recent acquisition of Lucasfilm by inking deals with Electronic Arts to produce video games based on the popular Star Wars franchise. Combine that with the potential of its theme park and network businesses, and Disney looks poised for continued success.

UnitedHealth Group , up 18%
Two months ago, health-insurance giant UnitedHealth looked like it might suffer huge reimbursement cuts from the federal government in its Medicare Advantage program. Yet since then, the government agency overseeing Medicare surprised investors by increasing reimbursements. Future cuts may loom on the horizon, but investors have gotten more comfortable with what Obamacare will mean for UnitedHealth and have thus been willing to bid up shares.

Microsoft , up 15.3%
Microsoft still has plenty of naysayers, who point to the company's shortfalls in performance of its tablet and operating system offerings as evidence of the stock being a bad investment. Yet the shares have gained the recognition of value investors over the past couple of months, who've responded to news of a soon-to-be-released Xbox upgrade as well as Microsoft's dividend yield of nearly 3%. After the run-up, Microsoft's valuation isn't as attractive as it was a few months ago, but it could still have room to run further.

Watch for more gains
If the Dow keeps adding to its record highs, these four stocks may prove instrumental in pushing the average further upward. Be sure to watch these companies to see if they keep pulling their weight in the weeks and months to come, or if they're replaced by other up-and-coming Dow stocks.

Find out more about whether Microsoft has finally bounced back by reading our premium report on the stock, in which a Motley Fool analyst explains the stock's opportunities and risks. The report includes regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.

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Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool recommends UnitedHealth Group and Walt Disney and owns shares of Microsoft and Walt Disney. 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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Originally published