The Dow's First Stumble

As of Wednesday evening, the Dow Jones Industrial Average (INDEX: ^DJI  ) was batting 1.000 this earnings season.

Aluminum producer Alcoa (NYSE: AA  ) kicked things off last week, reporting stronger-than-expected earnings on the back of heightened demand from the automotive and industrial sectors.

Companies such as Intel (Nasdaq: INTC  ) and Bank of America (NYSE: BAC  ) have since followed suit. Intel's earnings benefited from a 14% increase in sales in its high margin data-center segment. And Bank of America saw its earnings rise year over year thanks to better credit quality and lower expenses -- the latter, somewhat of a trend in the financial sector right now.

Indeed, despite all the bad news out there, things were starting to look up.

But for those of you wondering how much longer this could go on, we now have our answer.

But late this week, Travelers (NYSE: TRV  ) , the Dow's only insurance company, reported earnings of $1.26 per share, well under the $1.34 per share analysts expected. By the end of the week, the market had responded by sending shares in the company down some 2%.

Company

EPS

Average Analyst Estimate

Beat/Miss

Alcoa $0.06 $0.05 Beat
American Express $1.15 $1.07 Beat
Bank of America $0.19 $0.14 Beat
Coca-Cola $1.22 $1.19 Beat
Goldman Sachs $1.78 $1.17 Beat
Intel $0.54 $0.52 Beat
IBM $3.51 $3.42 Beat
Johnson & Johnson $1.30 $1.29 Beat
JPMorgan Chase $1.22 $0.76 Beat
Travelers $1.26 $1.34 Miss
Verizon $0.64 $0.64 Beat

Source: The Wall Street Journal's Market Data Center.

Despite missing analysts' estimates, the insurance company reported a profit of $499 million for the quarter. This compares with a net loss of $364 million in the year-ago period, largely because of $1.1 billion in catastrophic losses in the second quarter of 2011.

According to Travelers Chairman and CEO, Jay Fisher: "Our second quarter net income of $499 million benefited from meaningful improvement in our underlying underwriting margins as well as strong net investment income given the continuing low interest rate environment."

For the year, shares in the insurance giant, including dividends, have returned an impressive 9.4%, beating both the Dow and the S&P 500.

Foolish bottom line
Besides Travelers, which pays a respectable 2.9% dividend yield, the Dow has a handful of other solid dividend stocks that would satisfy income investors. To discover which ones our analysts believe are the best, check out our newest free report: "The 3 Dow Stocks Dividend Investors Need." You can download it now, for free.

Fool contributor John Maxfield owns shares in Bank of America. The Motley Fool owns shares of Bank of America, JP Morgan Chase, Johnson & Johnson, Coca-Cola, IBM, and Intel and has created a bear call spread position in American Express. Motley Fool newsletter services have recommended buying shares of Intel, Johnson & Johnson, Goldman Sachs, and Coca-Cola, creating a diagonal call position in Johnson & Johnson, creating a synthetic long position in IBM, and creating a write covered strangle position in American Express. 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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