Morning Dow Report: Why Merck, Caterpillar, and 3M Pulled the Dow Higher

Morning Dow Report: Why Merck, Caterpillar, and 3M Pulled the Dow Higher

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.

The Dow Jones Industrials got back into the holiday spirit Friday, rising more than 60 points as of 11 a.m. EST on general optimism about the economy. The final revision to U.S. gross domestic product for the third quarter came in up 4.1%, with consumer spending and business software investment revised well higher to lift the overall GDP. Amid that general enthusiasm, Merck , Caterpillar , and 3M all contributed strong gains to help the Dow jump.

Merck gained 1.1% as the drug company announced a new initiative to help fight the obesity epidemic. A new business at Merck will provide "comprehensive evidence-based weight management interventions" that will combine a variety of treatment options, including nutrition and diet management, behavioral coaching and monitoring, exercise activities, and other wellness techniques in order to reduce risks of diabetes, heart disease, and other conditions in which weight can play a key role. Given the extent to which pharmaceutical and biotech companies have looked for treatments to obesity-related diseases, Merck's move signals an intent to go beyond prescription-based solutions to attack the root causes of weight-related health issues.

Heavy-equipment manufacturer Caterpillar climbed 1.1% after finally announcing some good news last night. Australia's Roy Hill mining project obtained a roughly $700 million loan from the Export-Import Bank, with the financing contingent on Roy Hill spending money to obtain mining and rail equipment from Caterpillar and General Electric . The news is obviously welcome, but the new sales will only put a small dent in the declines that Caterpillar has seen recently. Until economic activity picks up in other key industries, it'll be difficult for Caterpillar stock to justify big moves upward.

3M rose more than 1% after getting an upgrade from analysts at JPMorgan Chase. The underweight rating that the bank had put on the manufacturing conglomerate had proven to be a big mistake, with 3M shares rising almost 50% this year. With 3M having made shareholder-friendly moves to boost its stock repurchase authorizations and dividend payout, JPMorgan raised its rating to neutral. 3M still has a lot to prove in accelerating its growth through new innovation, but investors remain optimistic that it will return to its innovative ways in the years to come.

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