In a short trading day, the Dow Jones Industrial Average (INDEX: ^DJI) gained more than half a percent, or 72 points, while the Nasdaq jumped nearly 1%, the third consecutive up day for the market. Investors were hopeful that the European Central Bank would cut interest rates on Thursday, and oil prices jumped about 4% on renewed tensions with Iran. News reports came out showing the U.S. has been building up a military force in the Strait of Hormuz, and Iran launched several long-range missiles as part of a test earlier today.

The monthly factory orders report released this morning showed demand growing slightly faster than expected at 0.7%, and June auto sales were way ahead of estimates, up 22% from a year ago. General Motors (NYSE: GM) said its sales were 16% ahead of last year's, and its shares jumped 5.6% while Ford (NYSE: F) gained 2.2% with a monthly sales increase of 7%.

In the market's most bizarre move of the day, Microsoft (Nasdaq: MSFT) actually gained 0.7% despite announcing it would take a $6.2 billion writedown on its 2007 acquisition of aQuantive, a move designed to increase its online advertising revenue the same way Doubleclick did for Google. The writedown should erase any profit this quarter, and I think the market's made a mistake brushing this off. Though it's not a cash charge, the loss still counts and the stock should have stayed near where it opened at about 2% down. That would have reflected a loss in market cap of about $5 billion for the Windows-maker, close to the amount of the charge.

Elsewhere on the Dow, cyclicals Alcoa and Caterpillar led the day reacting to the news of the promising factory orders report. Both stocks gained more than 3%. Home Depot (NYSE: HD), meanwhile, was the biggest loser on the index, dropping 2.5% after a report showed retail sales were the slowest in two months last week. J.C. Penney and Lowe's fell more than 3% as well.

Burgers or dogs
Before you fire up the grill, grab a copy of our newest special free report: "The 3 Dow Stocks Dividend Investors Need." These recommendations may not be the highest yields of the blue chips, but they have the product diversity, ability to adapt to new markets, and past dividend appreciation that essentially guarantee them to be a rock-solid investment for decades to come. Get your free copy of the report.