The Dow Caps Off a Strong Week

Perhaps all the Dow Jones Industrial Average (INDEX: ^DJI  ) needed was for the calendar to flip. After a miserable May, the blue chips kicked off their first week in June with their best performance of the year. The Dow gained 426 points this week, enough for more than a 3.5% gain, and today was no different as the index moved up another 0.75%.

Reports that Spain would ask for a bailout for its banks kept up the economic-stimulus theme from earlier in the week and helped boost stocks today. Spain was expected to make the request over the weekend, with the announcement coming as soon as Saturday afternoon. President Obama also reassured investors on the European debt crisis, saying "there are solutions."

Wal-Mart (NYSE: WMT  ) was the big winner on the Dow today, gaining 3.6% and hitting another 52-week high. Markets reacted to news that wholesale inventories and sales had risen faster than expected in April, which bodes well for the big-box retailer. Taking in nearly 10% of non-automotive retail spending in the country, Wal-Mart is often seen as a barometer for the economy as a whole.

JPMorgan Chase (NYSE: JPM  ) and Bank of America were also big winners on the macro news, with both gaining more than 1.8%. With the bullish week, JPMorgan shares may be finally bouncing back from the trade that cost the bank at least $2 billion and stripped as much as 25% from the share price. The matter is likely to be back in the news next week, when CEO Jamie Dimon arrives in Capitol Hill to face legislators' questions.

Only four Dow stocks were in the red today, with McDonald's (NYSE: MCD  ) leading the march south. The Golden Arches dropped 0.7% after it reported disappointing same-store sales growth of 3.3% in May on expectations of 5%. Comps in Asia were particularly hard-hit, with gains of just 1.7%. CEO Jim Skinner attributed the slowdown to an "increasingly challenging global economic environment," and one analyst saw problems in China revolving around decreasing consumer confidence and competition from Yum! Brands. (NYSE: YUM  ) The parent of KFC, Pizza Hut, and Taco Bell, which is heavily exposed to China, fell more than 3% on the news from McDonald's. Despite being the Dow's best performer in 2011, McDonald's has dropped more than 10% this year.

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Fool contributor Jeremy Bowman holds no positions in the companies in this article. Motley Fool newsletter services have recommended buying shares of McDonald's and creating a diagonal call position in Wal-Mart Stores. 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.


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