The Dow Jones Industrial Average (INDEX: ^DJI ) closed out a heady first quarter with a characteristic performance, up 66 points for a 0.5% gain. For the first three months of 2012, the Dow gained 8.1% while the broad-market S&P 500 (INDEX: ^GSPC ) jumped 12% over the period. After opening higher on a better-than-expected consumer spending report, the market gave back its gains before climbing to close 12 points shy of its high for the day.
Disney was the big winner of the 30 Dow components, up nearly 2% after Lazard Capital Markets upgraded Disney from "neutral" to "buy." The firm cited ESPN's dominant position and the media conglomerate's momentum in children's entertainment as reasons for upping its price target to $53. Disney closed near $44 Friday. The upgrade was welcome news for the Magic Kingdom after it took an expected $200 million loss on box-office bomb John Carter.
Computer maker Hewlett-Packard (NYSE: HPQ ) was also a strong mover on the day, ticking up 1.4%, but overall 2012 has provided a rough ride for HP, and it's down 7.5% year to date. Another dismal performer in the tech world that received a boost today was BlackBerry maker Research In Motion (Nasdaq: RIMM ) . Despite releasing a lackluster earnings report Thursday after market-close, RIM jumped 7% after the company's very frank discussion with analysts and the potential rumors that it could be acquired.
ExxonMobil (NYSE: XOM ) also made news, reaching an agreement with the state of Alaska to develop an oil and gas field, which could enable a $26 billion pipeline and plant to export liquid natural gas.
Of the rest of the Dow stocks, only three -- Alcoa, American Express, and Intel -- dropped, all finishing slightly down. The Nasdaq also closed down 0.12% for the day with Apple weighing heavily, down 1.7%.
Looking ahead to the next earnings season, analysts predict flat bottom-line growth for the S&P 500 after a solid 6.1% increase in Q4 2011. In addition, the same report that showed consumer spending grew faster than expected told us that income barely increased, meaning the spending growth is unsustainable without a greater gain in wages. Spending growth looks even shakier when considering that savings rates are now at a two-and-a-half-year low. Finally, it's worth remembering the old "sell in May and go away" saw. Since 1950, the Dow has returned 7.4% annually between November and April but just 0.4% a year between May and October. The blue-chip index has been red hot since bottoming out in the beginning of October, up 24% in six months.
Alcoa will kick off a fresh earnings season on April 10.
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