The Soaring Dow Left These Stocks Behind

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Wall Street broke out its rally caps today, sending the Dow Jones Industrials (INDEX: ^DJI  ) to a 160-plus-point gain that completely wiped out yesterday's declines. What's not quite as clear is why stocks moved higher. Some news sources pointed to comments from the president of the Chicago Fed supporting more action to promote job growth as a possible cause for the rally, but given that the Chicago Fed doesn't have a vote on the Federal Open Market Committee this year, it's hard to see that as a major motivating factor. Meanwhile, Spanish bond rates moved up, foreign currency and interest-rate pressures continue in Europe, and the fact that the economy still needs further support isn't a good long-term sign.

With the big move up in the Dow, only a single Dow component fell: United Technologies (NYSE: UTX  ) . Even after raising nearly $10 billion to help finance its purchase of Goodrich (NYSE: GR  ) , United Tech still needs more capital, and so it plans to sell a hybrid security of stock and 10-year debt in what it calls "equity units" to come up with another $1 billion. Secondary offerings of shares often push prices down, so it's not surprising to see United Tech fall even on a strong day for the overall market.

A few other Dow stocks posted only minimal gains. Wal-Mart (NYSE: WMT  ) gained 0.3%, as some details about the ongoing investigation of bribery charges came out. A global review by the company identified several countries outside Mexico, including Brazil, South Africa, India, and China, as potential areas at risk for corruption that deserve further review. The more likely cause for the stock's underperformance, though, is simply how well Wal-Mart shares have done lately even when the market has fallen.

Finally, Procter & Gamble (NYSE: PG  ) rose by only about a third of a percent. As the Summer Olympics approach, P&G is ramping up its marketing and advertising campaigns to take advantage of the publicity opportunities. But for investors expecting a stock market rally, defensively positioned stocks like consumer giant P&G may not give you the best returns -- and today's a good example of that phenomenon.

Stay focused on the long haul
Then again, looking at how stocks do on any given day gives you a shortsighted perspective. What's important is the long haul. To learn which Dow stocks have the best potential to give you the returns and stability you need, let me invite you to read our brand-new special report, "The 3 Dow Stocks Dividend Investors Need." It's hot off the presses and completely free -- get your copy today.

Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. You can follow him on Twitter, @DanCaplinger. Motley Fool newsletter services have recommended buying shares of Procter & Gamble and creating a diagonal call position in Wal-Mart. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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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Today's Market

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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%

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Related Tickers

10/21/2016 4:47 PM
^DJI $18145.71 Down -16.64 -0.09%
GR.DL $0.00 Down +0.00 +0.00%
Goodrich Corp CAPS Rating: ****
PG $84.33 Down -0.60 -0.71%
Procter and Gamble CAPS Rating: ****
UTX $98.67 Down -0.62 -0.62%
United Technologie… CAPS Rating: ****
WMT $68.34 Down -0.39 -0.57%
Wal-Mart Stores CAPS Rating: ***