Today's 3 Best Stocks in the S&P 500

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

I know this might sound a lot like rinse and repeat, but earnings reports once again trumped mixed economic data to send the broad-based S&P 500 higher for the day.

On the bright side, U.S. leading indicators for September rose a better-than-expected 0.7% and could signal that the economy is improving faster than economists are predicting. A faster-growing U.S. economy is going to be important for retailers as we head into the holiday season, since back-to-school sales were so dismal.

Conversely, the Mortgage Brokers Association's weekly loan origination report showed a decline of 7% from the previous week despite lending rates hovering near a four-month low. Historically low interest rates and low housing inventory has fueled the housing industry's rebound up until now, but consumers appear to be acting like spoiled brats any time interest rates have even the slightest uptick. If originations continue to fall there's the potential for homebuilders to struggle to meet fourth-quarter expectations.

Luckily, earnings reports yet again came to the rescue of today's mixed data and sent the iconic index higher by 7.52 points (0.43%) to close at 1,770.49, more than reversing yesterday's losses.

Topping the charts was highly short-sold telecom service provider Frontier Communications which advanced 5.5% after reporting in-line third-quarter results. With many pessimists predicting the worst, Frontier's ability to produce $0.06 in earnings per share and back its full-year cash flow projections was enough to stave off disaster and send shares higher. Overall, revenue fell 5% as Frontier delivered modest gains in broadband subscriptions while once again seeing rural voice subscriptions sink. As long as the company can maintain its high yield and keep capital expenditures under control, short-sellers may continue to get burned by Frontier.

Coming in a close second (just 0.02% behind) was apparel and accessories company Ralph Lauren which tacked on 5.5% after reporting better-than-expected second-quarter results. For the quarter, Ralph Lauren saw revenue grow by 3% to $1.92 billion despite net income falling 4%, largely due to unfavorable currency translations. Despite the decline, Ralph Lauren's adjusted EPS of $2.23 topped expectations by $0.03. Furthermore, Ralph Lauren boosted the low end of its full-year sales growth forecast to 5%-7% from its previous guidance of 4%-7% growth. The growing appetite of U.S. consumers for brand-name products is still evident, even if it's not translating to gains with teen retailers.

Finally, contract drilling services company Ensco gained 4.4% after it announced that it was raising its dividend by 50% to $3 per-share annually from the $2 it pays now. Based on the move, Ensco is paying out roughly 55% of its earnings as a dividend and firmly believes the distribution is sustainable given the company's record $11 billion in backlogged orders. The new dividend yield of about 5.3% places Ensco among the elite companies within the S&P 500 and is bound to deter short-sellers and put this company on income investors' radars.

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