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Today was a good day to have money in the markets, as a broad-based advance pulled up stocks across the board. Gold and the euro both rose sharply while oil also posted gains, suggesting that investors are once again moving back toward increasing risk levels in their portfolios. That matches up with comments from Federal Reserve Chairman Ben Bernanke, suggesting that the Fed might not yet be done with measures to spur more economic growth. Bond yields climbed, reflecting a flow out of fixed-income assets. When the dust cleared, the Dow Jones Industrial Average (INDEX: ^DJI ) closed up 161 points to 13,241.
To take a closer look at what moved the Dow today, let's look at three of its biggest winners.
American Express (NYSE: AXP ) , up 2.4%
Sometimes, all it takes to make shareholders happy is to pay them off. That's what American Express did today, as it boosted its dividend for the first time in five years. Shareholders will now get $0.20 per share every quarter, an 11% increase from its previous level.
What's more important for long-term investors than a few extra cents is that the dividend indicates the company's belief that it has permanently emerged from the financial crisis. AmEx was one of the few financial stocks that didn't cut its dividend in recent years, and resuming its upward course is even better news for the stock.
United Technologies (NYSE: UTX ) , up 2.1%
United Technologies jumped on a good day for defense stocks generally. A healthier economy would boost government revenue, potentially making it easier for the defense contractors that work with its Pratt & Whitney aircraft engine division to get the funding they need.
It's important to remember, though, that United Tech is more than just an aerospace company. With everything from air conditioners to elevators, the conglomerate is fairly sensitive to economic conditions across all its divisions. The stock's jump therefore makes sense, given the overall positive mood today.
Pfizer (NYSE: PFE ) , up 1.6%
The pharma giant is in the news not for its own product but for what a competitor has managed to do to improve on it. A presentation today at the American College of Cardiology meeting said that Regeneron Pharmaceuticals (Nasdaq: REGN ) and Sanofi's drug for improving bad cholesterol levels in patients worked well in conjunction with Pfizer's Lipitor, with a reduction of up to 72%.
As Lipitor is now off-patent, the news may seem moot for Pfizer. But the key takeaway is that if pharma companies can use existing medications to improve results, it could produce profits not only for new drugs but also for the existing drugs they rely on. If Pfizer can move in that direction, it could continue to see gains going forward.
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