Morning Dow Report: Caterpillar, ExxonMobil Soar on Manufacturing Strength; Procter & Gamble Drops

Morning Dow Report: Caterpillar, ExxonMobil Soar on Manufacturing Strength; Procter & Gamble Drops

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.

With the Federal Reserve meeting this week, all eyes are focused on the prospects for economic growth, and this morning's readings on the manufacturing sector pointed to continued strength for the global economy. The Dow Jones Industrials were up more than 130 points as of 11 a.m. EST after the Fed said factory output rose 0.6% in November. More broadly, industrial production jumped 1.1%; that set the stage for Caterpillar to rebound and for ExxonMobil to jump even as Procter & Gamble saw modest declines.

The manufacturing-related news helped give shareholders some respite from Caterpillar's poor performance, with shares rising 1.5%. The heavy-equipment maker has struggled with sluggish economic conditions both in the U.S. and abroad, with 2013's terrible year for mining companies weighing even further on Caterpillar's overall business. Even with today's gains, Caterpillar is still one of the few stocks in the Dow to post a loss so far this year. It'll likely take sustained strength even in the face of a potential Fed move to pull back on its quantitative-easing operations in order to convince investors that a recovery is sustainable.

ExxonMobil soared almost 3% as Goldman Sachs upgraded the oil giant. Goldman pointed to Exxon's having potentially solved its biggest challenge of maintaining production growth in the face of declining output from aging wells. If unconventional sources can keep presenting economically viable alternatives that help boost output, Exxon could benefit from continuing high prices for energy, especially among refined products with more favorable pricing based on global markets.

Gains were elusive for Procter & Gamble, though, as the stock fell 0.3. News of proposed regulation of anti-bacterial soap was just the latest setback that P&G has to face, as the FDA considers whether overuse of such products could pose a threat to public health by spurring resistant bacteria strains and potentially causing other side effects. Given consumers' negative responses to recalls and other controversial product-based problems, P&G needs to get in front of the FDA's call in order to avoid negative publicity that could have a much broader impact on the company than just its soap lines.

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