4 Straight: Why the Dow Continues to Rise

4 Straight: Why the Dow Continues to Rise

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Yes, it's Columbus Day, and the federal government was more shut down than normal today. But the stock market remained open, managing to extend its recent streak of gains. Though trading lower for much of the day, the Dow Jones Industrial Average turned positive in the early afternoon as Senate leaders appeared to be in the final stages of constructing a deal to raise the debt ceiling and end the government shutdown. Even though the GOP-controlled House of Representatives remains as the wildcard in this situation, Wall Street shrugged off any worries that might reasonably arouse, and the Dow advanced 64 points, or 0.4%, to end at 15,301.

Pfizer ended as the Dow's top performer, adding 2.2%. As my colleague Travis Hoium noted earlier today, a bullish development with the company emerged last week, when two of Pfizer's late-stage pipeline drugs reported upbeat trial results. That news understandably inspired some hope for investors who've seen the company's sales take a hit as Pfizer deals with the unsavory effects of the "patent cliff." Credit Suisse also just initiated coverage on the stock, awarding shares with an outperform rating and a $34 price target.

Boeing also rose today, gaining 1.3% as the company delivered the first of its next-generation 737-800 models to Russian airline UTair. The aerospace giant has been flooded with orders for the single-aisle plane, which practically sells itself by virtue of its low operational costs. While it's nice to see these popular new planes hitting the skies, investors may want to see how the plane performs before getting too ecstatic about things.

While the Dow had just eight losers on Monday, AT&T was one of the more notable laggards, shedding 0.8%. Telecom stocks ended as the worst-performing sector in the markets today, so the fall isn't shocking in that respect. AT&T finds itself at an interesting point in its illustrious lifetime as a corporation: The telecom sector is rapidly condensing, as the big players acquire or destroy their smaller competitors. With Verizon's power play last month to acquire in full its namesake U.S. wireless business, AT&T finds itself competitively pressured to make a power play of its own.

Finally, pharmaceutical giant Merck closed as the Dow's worst performer after a 1.1% decline Monday. In sharp contrast to its peer Pfizer, shares were downgraded today -- again. Monday's uninspiring analyst revision follows a Friday downgrade, as research outfits deplore Merck's patent expirations and unimpressive pipeline. Although analysts don't always make points worth considering, Wall Street may be on to something here, as a weak pipeline is indeed an ominous indicator for pharmaceutical companies.

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