The Dow Is Rising Today -- But Why?

The Dow Jones Industrial Average (INDEX: ^DJI  ) is having another interesting day today, as negative U.S. economic reports are seemingly having the opposite effect than most would expect -- they're helping push the market higher. Reports today showed that U.S. industrial production unexpectedly fell in Ma y, down 0.1%. But investors actually took  kindly to the news, as it could raise the probability of further stimulus following the Federal Reserve meeting next week.

Optimism from Europe also seems to be helping the Dow rise today, as investors continue to be upbeat about rumors that central banks would be willing to step in to quell any further economic turmoil caused by Greece's Sunday elections.

Microsoft (Nasdaq: MSFT  ) was the Dow's highest riser through mid-afternoon trading, up over 2%. Investors embraced reports that the company reached an agreement to acquire Yammer, a San Francisco-based company known as "the Facebook for the workplace" because it provides private social networks for companies. Yammer is currently used by over 200,000 companies and could help bring additional fire sharing and chat features to Microsoft Office.

Financials were also influential in helping pull the Dow up today, with American Express (NYSE: AXP  ) and Bank of America (NYSE: BAC  ) both gaining over 1.5%. The two Dow components are some of the most sensitive to the global economy, and are probably reacting to speculation of improved conditions in the eurozone.

Many investors rightly look to the Dow for companies with strong dividends and highly sustainable competitive advantages built for the long haul. That's why we've taken an in-depth look at all 30 Dow components and picked out our three favorite dividend-paying Dow stocks that investors can buy right now. You can find the names and analysis of these companies in our brand new free report, "The 3 Dow Stocks Dividend Investors Need." Simply click here to read the report now -- it's absolutely free.

Brendan Byrnes owns no shares of any company mentioned above. The Motley Fool owns shares of Microsoft and Bank of America. Motley Fool newsletter services have recommended buying shares of Microsoft. Motley Fool newsletter services have also recommended creating a write covered strangle position in American Express and creating a bull call spread position in Microsoft. The Motley Fool has a disclosure policy.

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  • Report this Comment On June 16, 2012, at 12:02 PM, Taxodium wrote:

    China will or is secretly garanteeing the 1trillion+ ECB bailouts to Greece Spain and the rest of the PIGS. Only China has this mountain of liquid cash in store. China is the largest stakeholder in Europe. Arguably C owns EU . But Turkey is also an important shadow player: T does not want yet another Greek revolution at its front door. For T its a lot cheaper to subsidize the corrupt Greek state than to risk civil war in Greece and worse even in Turkey, eg by the ever restive Kurds and Armenians.

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