These Stocks Are Defying the Dow's Drop

At the halfway point of the trading day, the Dow Jones Industrial Average (INDEX: ^DJI  ) was down 15 points (-0.12%) to 13,310. The S&P 500 (INDEX: ^GSPC  ) is down 5 points (-0.40%) to 1,427.

There were three U.S. economic releases this morning which were mixed for stocks.

Report

Period

Actual

Previous

Producer Price Index

September

1.1%

1.7%

Core Producer Price Index

September

0%

0.2%

University of Michigan Consumer Sentiment Index

October

83.1

78.3

Source: MarketWatch U.S. Economic Calendar.

This morning the Bureau of Labor Statistics reported the Producer Price Index rose 1.1% in September. That's down from the 1.7% rise in August but better than the 1% rise analysts expected. For those that don't eat or use energy, Core PPI was unchanged compared to August. Last month Core PPI rose 0.2% and analysts had expected the same for this month.

The University of Michigan Consumer Sentiment Index rose to 83.1 in October, up from 78.3 in September. That's far better than analyst expectations of 78 and is actually the highest reading since September 2007. As consumer spending makes up 70% of the U.S. economy, this is good news.

The U.S. markets opened up on the news but are now down. However, a few stocks are defying the Dow's drop.

Dow leaders

  1. Today's Dow leader is Wal-Mart (NYSE: WMT  ) , up 1.16% (or $0.87) to $75.89. Wal-Mart and its competitor Costco both hit 52-week highs earlier this week as Costco reported better-than-expected fourth-quarter results. Costco's earnings followed on news that Wal-Mart's U.S. head of merchandising said that the back-to-school season was "very strong" for Wal-Mart and that the strength should continue into the holiday season. The company has also been making moves to compete against online retailers. On Tuesday Wal-Mart announced it is testing its same-day delivery service in San Francisco and San Jose. Fool colleague Alex Planes recently took a look a Wal-Mart and Costco after the pair hit their 52-week highs. Click here for his take.
  2. Second for the day is Home Depot (NYSE: HD  ) , up 0.95% (or $0.55) to $59.57. Home Depot's fortunes are largely correlated with the housing market. As consumer sentiment improves, consumers are more likely to spend money and time improving their homes, investments which haven't really been made over the past five years. Fellow Fool John Maxfield recently took a closer look at how Home Depot has crushed the Dow's performance so far this year. Click here for his take.

The best approach
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Dan Dzombak can be found on his Facebook page. He holds no position in any company mentioned. Click here and like his Facebook page to follow his investing articles. The Motley Fool owns shares of Costco. Motley Fool newsletter services have recommended buying shares of Home Depot and Costco.  The Motley Fool has a disclosure policy. We Fools may not 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.


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