Why the Dow's Rallying Today

Earnings once again took center stage on Wall Street Friday, as favorable results from a host of companies, including Microsoft and General Electric, boosted investor sentiment going into the weekend. European markets also stabilized going into a key election in France. Just before 2:45 p.m. EDT, the Dow Jones Industrials (INDEX: ^DJI  ) were off their highs but still up 87 points to 13,051. The S&P 500 (INDEX: ^GSPC  ) jumped almost 6 points to 1,383.

But not all stocks shared in the rally today. Bank of America (NYSE: BAC  ) was down more than 4% in early afternoon trade as CLSA analyst Mike Mayo gave the bank a sell rating. Although the stock has had a huge run so far in 2012, Mayo argues that even if it successfully emerges from its plans to recapitalize and rebuild, B of A will likely never return to the status it once held.

Among the Dow's energy stocks, both ExxonMobil (NYSE: XOM  ) and Chevron (NYSE: CVX  ) were somewhat higher as oil prices climbed to around $103 per barrel. Natural gas, however, continues to languish at about $1.92, pulling diversified energy producers like Exxon and Chevron in two different directions. Longer-term, both stocks' prospects rely on the global economic picture. A slowdown could cause energy prices to plunge, but a recovery might well increase demand and sustain prices near current levels.

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Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. You can follow him on Twitter here. The Motley Fool owns shares of Microsoft and Bank of America. Motley Fool newsletter services have recommended buying shares of ExxonMobil, Chevron, and Microsoft, as well as creating a bull call spread position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.


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