How Did These Dow Stocks Soar in Today's Triple-Digit Drop?


On a day when the Dow Jones Industrials dropped 140 points, renewing its triple-digit volatility with its ninth move of 100 points or more in the past 10 trading sessions, you wouldn't expect to see multiple stocks bucking the downtrend and closing substantially higher. In particular, with the nature of the decline having come from macroeconomic considerations like slowing growth in China and higher interest rates around the world, just about every company in the market faces headwinds to their businesses, with just a handful of stocks benefiting from rising long-term interest rates.

But three stocks in the Dow managed to post gains of more than 1% on the day. Johnson & Johnson was the big winner, rising 1.7% after a weekend meeting of the American Diabetes Association featured competing research from J&J and Medtronic toward potentially creating an artificial pancreas. Medtronic hopes to get FDA approval for its MiniMed 530 G pump in the near future, while J&J's device is also geared toward monitoring insulin levels during overnight hours, when patients are most vulnerable to blood-sugar swings. Although relatively few diabetes suffers have the Type 1 version of the disease, building a research base will be lucrative for J&J in its attempts to make further advances.

Microsoft climbed 1.4% on a pair of interesting announcements. One report involved Microsoft making its video games available for rival smartphone platforms, including those running the iOS and Android operating systems. But arguably the more important news involves Microsoft teaming up with fellow tech giant Oracle to offer various Oracle software on cloud-based installations using Microsoft's Windows Azure or Server Hyper-V platforms. As even the biggest companies collaborate, it's clear that cloud computing has in some ways leveled the playing field among tech companies, with the largest companies still having to work hard to keep up with advances from smaller, nimbler rivals.

Finally, UnitedHealth Group rose 1.2%. Last week's news that health insurers would pay a total of half a billion in premium rebates because of Obamacare regulations would ordinarily seem like bad news for UnitedHealth, but the figure has been coming down as health insurance companies get used to the requirements of the law. The move also indicates that companies are getting better about pricing their products correctly, rather than having to return excess premiums in the form of rebate payments. Watch for similar Obamacare-motivated moves from UnitedHealth and its peers in the months to come.

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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 Johnson & Johnson and UnitedHealth Group and owns shares of Johnson & Johnson, Medtronic, Microsoft, and Oracle. 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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