Dow Kicks Off Q3 With a Win
Stocks moved higher today as bullish economic data helped start off the third quarter on the right foot. The Dow Jones Industrial Average was up by nearly 200 points early in the session but finished up just 65 points or 0.4% because of a late sell-off. Aside from the economic reports, investors seem to have come to terms with the reality that the Federal Reserve plans to end its monthly bond-buying program and are back to focusing on other economic data points such as the June employment report, which comes out this Friday. World markets were also trending upward today, as indexes in Japan, Hong Kong, and Tokyo all topped gains of 1%.
Today, the Institute of Supply Management's June manufacturing index topped expectations of 50.5, coming in at 50.9. Investors were also happy to see an expansion after May's reading of 49.0 indicated a contraction. May construction spending, meanwhile, increased 0.5% to an annual rate of $874.9 billion, in line with estimates, and hit a near four-year high in the process. The revamped housing market has driven much of the growth in construction, as the commercial real estate market and new factory demand continue to be slow.
United Technologies topped all Dow stocks today, gaining 1.9%. Though there was no major news out on the maker of Otis elevators and aircraft engines, the company stands to benefit from the strong manufacturing and construction reports. United Technologies was recently slapped with $473 million in damages in a lawsuit related to bogus pricing in a contract with the Air Force more than 20 years ago. While no investor likes to see news like that, for a company taking in more than $5 billion in profit annually, the suit is just a bump in the road.
On the flip side, Intel was the Dow's biggest loser, falling 1.4% despite a strong performance by the tech-heavy Nasdaq. Again, there was no company-specific news on Intel, but new CEO Brian Krzanich said Friday that the company was finally making a push into mobile, an area that's been a thorn in the side of the chipmaker. Krzanich said the company was speeding up its development of its Atom chip for mobile devices and is producing chips for wearable technology.
Finally, Disney shares were up 1.2% on the same day it extended CEO Bob Iger's contract by 15 months to June 2016. Iger, who is now 62, figures to retire when that date arrives. Disney shares also reacted to the split between News Corp. and 21st Century Fox, which will create a more streamlined rival, as Fox, the entertainment house, sheds its publishing and news wing in News Corp. Fox Sports is scheduled to launch this summer, which could present a serious challenge for ESPN, one of Disney's cash cows.
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The article Dow Kicks Off Q3 With a Win originally appeared on Fool.com.Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Amazon.com, Intel, Netflix, and Walt Disney. 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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