Morning Dow Checkup: Will the Rally Continue?

While the Dow Jones Industrial Average (INDEX: ^DJI) is coming off its best three-day performance of the year, the waning momentum in late trading yesterday appears to be leaking into Friday results this morning.

The main Asian indexes traded lower overnight, with their European counterparts following suit so far today. At last glance, the FTSE 100 index was down 0.9% on the day. It's a relatively quiet day for economic data, with announcements on two measures out this morning. At 8:30 a.m. EDT, we have an update on the trade deficit, followed by news on wholesale inventories at 10 a.m. EDT. Neither measure is expected to move the needle for investors, who will likely shift focus to Europe after Ben Bernanke failed to deliver the stimulus comments many expected yesterday.

Let's take a look at how futures markets were moving in the past hour.

Source: Yahoo! Finance.

Companies to Watch
McDonald's (NYSE: MCD) May sales numbers are released later this morning. Last month's announcement was considered a disappointment, as global same-store sales rose 3.3%, versus company guidance of 4%. The April number was a marked deceleration from early 2012 numbers in the mid-to-high single digits, and it contributed to the 2012 slump in shares of Mickey D's, which are down 12% year to date, versus a 2% rise for the Dow. This lagging performance is a bit puzzling in the current economic environment, given McDonald's status as a more defensive, consumer-oriented investment.

Another consumer stock that tends to perform well as consumers tighten their budgets is retail giant Wal-Mart. Unlike its fast food cousin, its price has risen more than 10% on the year.

Bernanke squashes gold bugs
One group that tends to benefit in times of economic turbulence is gold investors. One thesis for investing in gold is a belief in the precious metal as a store of value. When governments implement quantitative easing programs, the fiat money-to-gold ratio increases and, in theory, should support dollar-denominated gold prices. However, shares of the SPDR Gold Trust ETF (NYSE: GLD) were slammed by Bernanke's comments yesterday morning, falling 1.7% on the day. Gold fell to $1,588 per ounce after breaking the $1,600 level within the past week on hopes that government easing was imminent following a disappointing jobs report. Those hopes were dashed, at least for now, as the Fed chairman's comments didn't suggest another round of easing was coming soon. Shares in gold miners joined in on the dive, with Kinross Gold (NYSE: KGC) and NovaGold Resources (NYSE: NG) down 6.2% and 5.4%, respectively. While gold prices are up 2.8% in the past year, shares of the two miners are down almost 50%.

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