The Stocks That Sent the Dow Up 109 Points


On most days, a 109-point gain for the Dow Jones Industrials would be cause for untempered celebration. But when you consider the much larger gains that the market posted earlier in the day, even a triple-digit advance seems like a bit of a downer. Some news outlets even blamed a relatively unimportant comment in a financial publication as stirring speculation about what the Federal Reserve will signal after its meeting over the next two days, despite the comment having no particularly unusual insight in making its observations about the Fed's likely next move.

When the news seems to focus on a single macroeconomic event, you simply need to move beyond broad-picture thinking and drill down on individual companies. Cisco Systems was the biggest gainer in the Dow today, rising 2.5% as investors responded favorably to its combination of dividend income and growth potential. For years, companies have deferred spending on IT projects, and Cisco hopes that when the floodgates finally get released, it will get more than its fair share of pent-up demand for its products. With its new mobile-networking innovation center and some promising new router products, Cisco is keeping up its pace in an attempt to keep growing in any direction it can find.

DuPont jumped almost 2%. Although opening a Ukrainian seed production plant is just the latest example of the company's commitment to its agricultural segment, DuPont's gains today likely stem from a natural bounce after its nearly 5% drop last week. With DuPont still expecting weaker earnings this year due to another round of unusual weather, investors can't count on a one-day bounce being particularly meaningful. Moreover, even further support from the Fed won't necessarily help DuPont offset agricultural risk, which has shown itself to be unpredictable and difficult to control.

Finally, beyond the Dow, several Chinese solar stocks jumped considerably today, with Yingli Green Energy posting double-digit percentage gains and Canadian Solar finishing up about 8%. With news that the Chinese government will spur demand with projects designed to help struggling solar stocks to return to profitability, investors in Yingli, Canadian Solar, and other Chinese solar companies concluded that they could benefit from the potential windfall. In the long run, though, even the Chinese government's best efforts could prove insufficient to do more than simply keep these companies from facing tough decisions that they'll eventually have to make.

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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 Cisco 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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