3 Big Movers Behind the Dow's Surge Today

Before you go, we thought you'd like these...
Before you go close icon

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 climbed back above the 15,000 mark today, convincingly posting a nearly 1% gain in climbing more than 140 points. Macroeconomic data from China showing stability in consumer prices combined with strength in export activity helped set a positive tone for the day. Closer to home, U.S. consumer credit grew at a slower rate than expected, once again igniting uncertainty about plans for the Federal Reserve to pull back on its quantitative easing program. Nevertheless, gains weren't limited to the Dow, either, as the Nasdaq Composite hit its best level in 13 years.

Leading the Dow higher was Caterpillar , which posted a 2.6% gain. In addition to general enthusiasm about China's economic prospects, Caterpillar might have gotten a boost from good news on the homebuilding front. Although rising interest rates have raised concerns within the home-construction industry lately, Hovnanian Enterprises reported strong home prices and a big jump in its backlog. That, in turn, helped drive other homebuilders higher, and with Caterpillar's equipment being instrumental in many construction projects, a healthy housing industry combined with Chinese strength could help the stock bounce back from its declines this year.


Travelers also climbed nicely, rising 2.1%. The insurance giant has undoubtedly benefited from the almost nonexistent activity in the tropical Atlantic this year, with no storms reaching hurricane status as of today despite the typical hurricane season already being half over. That could change if Tropical Storm Humberto gains strength in the eastern Atlantic, but for now, Travelers has enjoyed the lack of huge losses that storms often cause in late summer.

Finally, IBM only gained 1.1%, but its high share price had its usual disproportionate impact on the Dow. The company made headlines with its decision to move its retiree health insurance coverage to private exchanges, giving 110,000 of its retired workers stipends to find their own care. With anticipated increases in costs for the rest of the decade, IBM's decision could have a big impact on former workers who were counting on their plan coverage as a substitute for Medicare supplemental insurance.

Today's winners are solid stocks, but the companies we've chosen as the most promising long-term investment ideas in the Dow aren't among the stocks talked about earlier in the article. Find out their names in The Motley Fool's newly updated special report, "The 3 Dow Stocks Dividend Investors Need." It's absolutely free, so simply click here now and get your copy today.

The article 3 Big Movers Behind the Dow's Surge Today originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool owns shares of IBM. 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.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners

Don't Get Too Close To a Newborn Giraffe Unless You Want to Get Kicked in the Nuts Don't Get Too Close To a Newborn Giraffe Unless You Want to Get Kicked in the Nuts
Man Finds 5 Abandoned 'Puppies' In His Garden - Then Quickly Realizes He Made A Big Man Finds 5 Abandoned 'Puppies' In His Garden - Then Quickly Realizes He Made A Big
A Holocaust Survivor Found These Old Photographs - And Solved A Decades-Old Mystery A Holocaust Survivor Found These Old Photographs - And Solved A Decades-Old Mystery