The stock market largely took a pause on Friday, as slightly higher inflation figures pushed bond yields higher again. As gasoline prices move above $4 in several states, one question many people have is whether the resulting loss of buying power for average consumers will start to reverse the economic rebound. For now, though, stocks are taking the news in stride, and the Dow Jones Industrials (INDEX: ^DJI ) finished down just 20 points, to 13,233. The S&P 500 (INDEX: ^GSPC ) finished up 0.1%.
But some of the stocks in the Dow were anything but lackluster today. Let's take a closer look at three of those companies.
Bank of America (NYSE: BAC ) , up 6%
With today's gain, B of A finished the week up more than 20%. The company that started the year near $5 per share is now within spitting distance of double digits.
Adding to the good news the stock got from the Fed's stress test, higher long-term bond yields are steepening the yield curve. That in turn gives B of A and other banks the potential for wider interest spreads that are the main driver of traditional banking profits. The Dow's other financial stocks took a breather today, but B of A is still running strong.
Alcoa (NYSE: AA ) , up 1.9%
Aluminum-maker Alcoa is rebounding along with prospects for the global economy. That could be good news, not just for the company but for CEO Klaus Kleinfeld as well.
An SEC filing yesterday revealed that Kleinfeld received about $12.6 million in total compensation last year, with stock and options awards making up $9.5 million of that figure. With the stock having fallen almost 45% last year, that may seem like a rich reward for bad performance -- but the figures actually reflect Kleinfeld taking about a 40% cut in his incentive-based pay. It's good to see that Kleinfeld recognized the need to sacrifice along with shareholders, but it's even better for shareholders to see a share-price recovery.
ExxonMobil (NYSE: XOM ) , up 0.3%
Geopolitical concerns have played a big part in the volatility in the oil markets lately. Oil pushed higher by about $2 per barrel today, and news from the Middle East may have contributed to the rise.
The Iraqi oil minister said that it received a letter from Exxon saying that it had frozen a contract it made with the Kurdish regional government in the northern part of Iraq. The original contract had raised tensions with the Iraqi government, which doesn't recognize Kurdistan as an independent entity. The concern for Exxon is that if Iraq wants to retaliate, it could look at changing its contract with Exxon for the southern Iraqi West Qurna oil field. The episode shows how volatile the region is, especially as neighboring Iran comes under ever more intense international pressure.
Wait 'til next week!
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