How the Dow Staged a Big Comeback This Week

It was quite the roller-coaster ride this week for the Dow Jones Industrial Average (INDEX: ^DJI  ) , which wound up finishing positive overall for the week despite falling in four out of the past five days. The blue-chip index posted declines in this week's first four trading days, as the market's anticipation of what Federal Reserve Chairman Ben Bernanke would say turned to disappointment when he stopped short of calling for more stimulus. The Fed did signal that it may be prepared to act in its next policy meeting in six weeks, but that wasn't much solace for investors.

Still, after spending four straight days in the red, the Dow rebounded in a big way on Friday, rising more than 200 points and erasing all of the week's losses in one fell swoop. Positive U.S. jobs data was the main catalyst behind the jump, as the report showed that employers added 163,000 jobs versus expectations of 100,000. Despite the better-than-expected jobs number, though, the U.S. unemployment rate rose a tenth of a percentage to 8.3%.

Here's how all three major U.S. indices fared over the past week.

Index

Change

Ending Value

Dow Jones Industrial Average 20.51 [0.16%] 13,096.17
Nasdaq 9.81 [0.33%] 2,967.90
S&P 500 (INDEX: ^GSPC  ) 5.02 [0.36%] 1,390.99

Cisco (Nasdaq: CSCO  ) was the Dow's biggest gainer on the week, rising 4.2%. Almost all of the tech stock's gains this week were made on Friday, when it rose 3.9%. Still, Cisco is the Dow's third biggest loser in 2012, dropping more than 9% year to date.

Boeing (NYSE: BA  ) was on the opposite end of the spectrum this week, ending as the Dow's biggest loser. The stock dropped 3.6% despite news that the plane maker had reached an agreement to sell 94 of its popular 737s to Singapore Airlines and China Southern Airlines, a big win for the Chicago-based company. Boeing, though, continues to deal with backlash from an incident last weekend in Charleston, S.C., involving its prized 787 Dreamliner. The company is investigating why one of the plane's engines spewed debris during a high-speed taxi test, causing a grass fire along the runway.

Outside the Dow, LinkedIn (NYSE: LNKD  ) had a week much like overall markets, except with much higher volatility. The stock dropped from more than $107 a share on Monday down to below $92 on Thursday before its much-anticipated earnings were released. Profit dropped slightly, but revenue rose 89% versus last year and the company guided full-year revenue above analyst expectations. The impressive earnings report was enough to send LinkedIn shares skyrocketing 16% on Friday, rebounding to end the week up nearly 5%.

As evidenced by the Dow's crazy week, there remains a tremendous amount of uncertainty surrounding markets and the global economy. As a result, 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 LinkedIn and Cisco Systems. Motley Fool newsletter services have recommended buying shares of LinkedIn. 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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