Why the Dow Was Up Today

All three major stock market indices were up slightly today.

Index

Change

Ending Value

Dow Jones Industrial Average (INDEX: ^DJI  ) +32.77 [+0.27%] 12,392.69
Nasdaq (INDEX: ^IXIC  ) +2.34 [+0.09%] 2,676.56
S&P 500 (INDEX: ^GSPC  ) +2.89 [+0.23%] 1,280.70

The biggest news today is the unofficial start of earnings season.

Each quarter, Alcoa (NYSE: AA  ) is the blue-chip first reporter. And today was no different.

Alcoa reported after market close, but it was the biggest winner out of the 30 Dow stocks today (up 2.9%) as investors anticipated good news. The reported news was actually mixed, though. Alcoa's adjusted earnings came out at -0.03, either off a penny or in line with analyst estimates, depending on your preferred source. But Alcoa's Chairman and CEO Klaus Kleinfeld had this to say on the year ahead:

 "For 2012, we expect global aluminum demand to grow 7% and are forecasting a global deficit in primary aluminum supply."

After Alcoa, Bank of America continued its volatile ways, gaining 1.5%. On the losing side, Microsoft (Nasdaq: MSFT  ) was worst off, down 1.3%. Not that we can blame the decline on this tidbit, but this year will be Microsoft's last as a major participant at the annual Consumer Electronics Show in Las Vegas. Tonight is the final keynote address from CEO Steve Ballmer. 

It's fun to look at the daily market news, but remember to keep your perspective and invest for the long term. If you're looking for a long-term stock pick, our chief investment officer has identified his No. 1 stock for the next year. Find out which stock he likes in our brand-new free report: "The Motley Fool's Top Stock for 2012." I invite you to take a copy, free for a limited time. Get access to the report and find out the name of this legendary company.

Anand Chokkavelu and The Motley Fool own shares of Microsoft and Bank of America. Motley Fool newsletter services have recommended buying shares of and creating a bull call spread position in Microsoft. 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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  • Report this Comment On January 09, 2012, at 8:28 PM, ssg13565 wrote:

    I respectfully submit that the reason the Dow was up a wopping 24 points today was pure random chance. There is not enough statistical significance in 24 points to even bother positing a reason.

  • Report this Comment On January 09, 2012, at 8:39 PM, TMFBomb wrote:

    @ssq13565,

    Agreed. Most of the daily movements are the result of the cumulative effect of millions of individual transactions, not just one reason.

    Fool on,

    Anand

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