Earnings Drive the Dow to Another Gain

The Dow Jones Industrial Average (INDEX: ^DJI  ) looks as if it might be starting to get back on track after a series of declines, gaining more than 100 points on the day. The gain was primarily due to earnings from a slew of blue chips that largely impressed investors. A positive housing report also helped push stocks up today, as data showed that homebuilders broke ground on more homes in June than any month since October 2008.

Here's how all three major U.S. indices fared on the day:

Index

Change

Ending Value

Dow Jones Industrial Average 103.16 [0.81%] 12,908.70
Nasdaq 32.56 [1.12%] 2,942.60
S&P 500 9.11 [0.67%] 1,372.78

Despite the Dow's solid gain today, there was one Dow stock in particular that finished well in the red. It turns out earnings weren't so kind to Bank of America (NYSE: BAC  ) , which dropped a whopping 4.9% today despite beating analyst expectations. Analysts worried about weakness in the company's core earnings, and the fact that disputes over bad mortgages and mortgage-backed bonds doubled from last year, a liability for the company that continues to get worse.

On the other side of the coin, chipmaker Intel (NYSE: INTC  ) was the Dow's biggest gainer on the day, rising 3.3% on earnings released after hours on Tuesday. Intel lowered its full-year revenue growth outlook because of the struggling macro economy, but by less than many investors had feared. The better-than expected outlook from Intel also helped pull fellow tech giant Cisco (Nasdaq: CSCO  ) up 2.9% to finish as the Dow's second biggest winner.

Outside the Dow, Honeywell (NYSE: HON  ) finished up 6.7% today on impressive earnings. The company reported earnings per share of $1.14, beating analyst expectations of $1.11. Revenue jumped 3.8% to $9.44 billion. Strength in the company's aerospace segment drove sales growth, with revenue in that division increasing by 7.7%. The strong performance from its aerospace segment also helped the company increase net margins to 15.8%, up from 14.3% a year ago.

Despite the mostly good news today, there remains a tremendous amount of uncertainty surrounding Europe and the global economy, and many investors may be tempted to take their money and run far from the market. But that can be one of the biggest mistakes investors can make. Some of the most successful stock picks are great dividend stocks purchased at attractive valuations on dips in the market. With that in mind, we've taken an in-depth look at all 30 Dow components and picked out our three favorite Dow dividend 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." Read the report now -- it's absolutely free.

Brendan Byrnes owns no shares of any company mentioned above. The Motley Fool owns shares of Intel, Cisco Systems, and Bank of America. Motley Fool newsletter services have recommended buying shares of Intel. 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. The Motley Fool has a disclosure policy.


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