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Dow Blasts Off On Upbeat Economic Data

The Dow Jones Industrial Average (INDEX: ^DJI  ) snapped back to life today, gaining 1%, or 136 points, as a slew of positive economic data reassured investors that the economy seems to be improving. Starting off the day, the ADP reported that private sector employers added 158,000 jobs in October, ahead of expectations of 143,000, and initial unemployment claims were fewer than expected, as well. The reports bode well for the Dept. of Labor's all-important jobs number due out tomorrow, though the actual numbers from the two data collectors often differ significantly.

Elsewhere, a consumer confidence index showed levels up nearly four points in October from September, and manufacturing numbers were also better than expected.

Several Dow components jumped on the news, with Bank of America (NYSE: BAC  ) leading the charge with a gain of 4.5%. The Charlotte-based institution is often one of the most volatile stocks in the Dow, and all the economic indicators released today were good signs for the recovering bank, as an increase in jobs and consumer confidence should cause spending and borrowing to go up. A jump in manufacturing could also mean more capital expenditures and business lending.

Microsoft (Nasdaq: MSFT  ) was the second-biggest gainer, as goodwill from the recent Surface and Windows 8 launch pushed it up 3.4%. The Windows maker also announced it was pushing deeper into China by expanding its data-center service and Office software suite there. A number of other tech and cyclical stocks also had gains of 2% or more on the day.

Moving in the other direction was Wal-Mart (NYSE: WMT  ) , which fell 2.1%. Though a number of retailers showed strong gains in October, analysts are afraid that the effects from Hurricane Sandy will put a dent in pocketbooks in the coming weeks. Two other factors that could have also pushed the world's largest retailer down are news that Amazon.com launched its "Black Friday" sales today, and that Wal-Mart has joined a coalition to gain transparency on health-care costs. The rising costs of health benefits have become a growing concern of businesses, especially in light of the new health-care law.

Finally, Pfizer (NYSE: PFE  ) was also a loser today, as shares declined 1.3%, after the pharmaceutical giant reported earnings. The company is still feeling the effects of cholesterol blockbuster Lipitor coming off patent, as profit fell 14% year over year, and prescription drug sales fell 18%, though an adjusted EPS of $0.53 slightly beat estimates of $0.52. As another indication of mixed results, Pfizer raised its 2012 profit forecast, but lowered its revenue forecast.

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Jeremy Bowman has no positions in the stocks mentioned above. The Motley Fool owns shares of Bank of America and Microsoft. Motley Fool newsletter services recommend Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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