Markets Surge Higher

Updated

Although investors have little news to work with today, the markets are moving to never-before-seen levels today. As of 12:50 p.m. EDT the Dow Jones Industrial Average is up by 83 points, or 0.55%, to 15,174. But the S&P 500 is the best-performing index, up 0.83%, while the NASDAQ has been lifted by 0.68%.

Let's briefly take a look at a few of the stocks missing today's rally.

Shares of Intel are down further today after falling 1.35% yesterday, thanks to a few discouraging comments about the long-term health of the business by analysts at Bernstein Research. So far today shares have fallen 0.8% as investors consider the warning signs and weigh the odds that Intel can overcome the number of hurdles it is facing. With personal-computer sales dramatically slowing, the company will continue to see revenue decline at a time when Intel will need to invest heavily in research and development in order to compete in the mobile-chip industry. The Bernstein analyst noted yesterday that the company may experience a cash flow problem in the coming months, and I agree.


Meanwhile, shares of UnitedHealth are also down 0.8%. As we move closer to the start of Obamacare, investors, insurers, and customers all seem to be growing more worried about how the whole industry will eventually shake out. Customers fear that costs may rise, as insurance companies will now have to cover everyone despite the cost of insuring individuals with past medical problems. These additional costs will likely increase the price for everyone, but no one truly knows that yet. Therefore investors are unsure whether the big health insurance companies will be profitable this time next year, and that is one reason UnitedHealth has been so volatile lately.

Lastly, Caterpillar is down 1% today after industrial-production growth in China missed economists' expectations yesterday. Although April's production grew to 9.3% from 8.9% in March, it was still below the 9.5% which many had estimated. This report is just another indication that major economies around the world that have been going strong over the past few years are now slowing down. And with Europe struggling to get moving, the U.S. only slowly coming back, and developing countries weakening, Caterpillar will feel some pressure in the form of low or even negative sales growth.

Still, Caterpillar is the market share leader in an industry in which size matters, and its quality products, extensive service network, and unparalleled brand strength combine to give it solid competitive advantages. Read all about Caterpillar's strengths and weaknesses in The Motley Fool's brand-new report. Just click here to access it now.

The article Markets Surge Higher originally appeared on Fool.com.

Fool contributor Matt Thalman has no position in any stocks mentioned. The Motley Fool recommends Intel and UnitedHealth Group. The Motley Fool owns shares of Intel. Check back Monday through Friday as Matt explains what caused the Dow's winners and losers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter: @mthalman5513. 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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