With Wall Street getting back to work after Hurricane Sandy closed the markets earlier this week, it's fitting that jobs numbers would be the driver for a big jump for stocks. The monthly ADP report on business employment reported a gain of 158,000 jobs in October. That was enough to send the markets soaring, with the Dow Jones Industrials (INDEX: ^DJI ) gaining more than 170 points by 10:45 a.m. EDT. The broader market kept pace with the Dow's gains, as well.
Rising stocks swamped the decliners, with United Technologies (NYSE: UTX ) and Caterpillar (NYSE: CAT ) leading the way with gains of almost 3%. United Tech won a contract to develop new engine technologies, and Caterpillar stands to gain from reconstruction post-Hurricane Sandy. But the gains are more likely a reflection of greater overall optimism about the economy.
Yet earnings news tempered some of the gains. Pfizer (NYSE: PFE ) fell 1.5% after reporting a 16% plunge in revenue, most of which was due to its blockbuster drug Lipitor coming off patent. Sales of Lipitor dropped a whopping 87% in the U.S. and 71% globally, overshadowing a penny beat on earnings per share. Pfizer will need to come up with replacements for Lipitor in order to sustain its recent share-price advances.
ExxonMobil (NYSE: XOM ) also dropped slightly despite beating expectations. Revenue fell 8%, with both output declines and falling prices hurting the company's top line. The company's refining margins improved, but that wasn't enough to prevent a 7% drop in net income. Huge buybacks of shares kept the damage to EPS figures to a minimum, but the bigger issue is whether Exxon can get its production back up.
Another melt-up ahead?
The jury's out on the impact of Hurricane Sandy, but if it encourages greater spending on infrastructure and construction, then Caterpillar stands to gain. But does that mean that Caterpillar is a buy right now? Its quality products, extensive service network, and unparalleled brand strength combine to give it solid competitive advantages. Read all about Caterpillar's strengths and weaknesses in our brand new report. Just click here to access it now.