The Dow Added Almost 200 Points Today. Why?

After five straight losing sessions, the Dow is on a two-day winning streak including a sizable gain today. Here's how the major indexes did.


Gain (Loss)

% Change

Ending Value

Dow Jones Industrial Average (INDEX: ^DJI  ) +181.19 +1.41% 12,986.58
Nasdaq (INDEX: ^IXIC  ) +39.09 +1.30% 3,055.55
S&P 500 (INDEX: ^GSPC  ) +18.86 +1.38% 1,387.57

On the global economic front, there were apparently some rumors in the market for stronger-than-previously expected growth figures out of China (reporting well after market close at 10 p.m. ET). And European bond yields fell a bit.

But what I prefer to look at are the individual earnings reports coming out as we kick into earnings season this week. So far, so good. Alcoa started us off on Tuesday with a positive surprise. Hewlett-Packard (NYSE: HPQ  ) didn't report today, but its shares were boosted by 7.2% on favorable PC shipment reports from Gartner and IDC. HP almost doubled the industry, growing sales by 3.5% versus around 2% for the industry. Good news for tech and great news for HP.

Google (Nasdaq: GOOG  ) added to the tech positivity today after market close. It was up 2.4% on expectations and then up a smidge more in after-hours trading (0.08% at 8:00 p.m. ET).

Google slightly missed on the top line ($8.1 billion versus an expected $8.2 billion) but beat on the bottom line ($10.08 per share versus $9.65, both on an adjusted basis). It saw increased volume growth of 39% in its advertising cash cow but at a 12% lower cost per click. There is debate on whether this is a sign of weakness or merely a mix shift.

That said, Google's earnings were overshadowed by its announcement of an unorthodox 2:1 stock split. The mechanism is a stock dividend that will issue non-voting shares, so that Google's founders can maintain control as they currently do under a dual-class structure. Basically, the non-voting shares will allow Google to stave off "dilution from routine equity-based employee compensation and other possible dilution, such as stock-based acquisitions."Cynics will say this move is a corporate governance no-no. Believers in the long-term vision of Larry Page and Sergey Brin may argue that it allows them to maintain their long-term strategies for the company.    

Google's earnings did not disappoint, but will Apple's? We preview what to look for from Apple and four other must-watch companies in "5 Stocks Investors Need to Watch This Earnings Season." Get access now.

Anand Chokkavelu owns shares of Apple. The Motley Fool owns shares of Apple and Google. Motley Fool newsletter services have recommended buying shares of Google and Apple and creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1861083, ~/Articles/ArticleHandler.aspx, 10/23/2016 10:25:05 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:47 PM
^DJI $18145.71 Down -16.64 -0.09%
^GSPC $2141.16 Down -0.18 -0.01%
S&P 500 INDEX CAPS Rating: No stars
^IXIC $5257.40 Up +15.57 +0.30%
NASDAQ Composite… CAPS Rating: No stars
GOOGL $824.06 Up +2.43 +0.30%
Alphabet (A shares… CAPS Rating: *****
HPQ $13.80 Down -0.30 -2.13%
HP CAPS Rating: ***