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Positive economic reports boosted the markets early this morning and, even after disappointing comments were made from both sides of the political aisle, which caused the markets to drop sharply, proof that the U.S. economy is growing stronger gave investors enough reason to resume their buying. The Dow Jones Industrial Average (INDEX: ^DJI ) ultimately closed up 36 points, or 0.28%, at 13,021. Of the 30 stocks which make up the Dow, only eight of them were in the red when the closing bell rang. This afternoon I explained why Intel (Nasdaq: INTC ) , Microsoft (Nasdaq: MSFT ) , and IBM (NYSE: IBM ) all moved lower; click here to read about those companies. Of the 22 stocks remaining Dow components which moved higher, three of the best performers were Disney (NYSE: DIS ) , UnitedHealth (NYSE: UNH ) , and Caterpillar (NYSE: CAT ) .
So why were they higher?
This morning, Disney announced that it would be increasing its annual dividend by 25% and moving its payout date to fall in the 2012 tax year. The old dividend of $0.60 per share was increased to $0.75 per share, which gives the company a dividend yield of 1.5% at the current $49.72 share price. The new dividend amount will now be paid to shareholders on record as of December 10, and distributions will be made on December 28. Disney follows a long list of companies which have moved their dividend distribution dates from early 2013 to December 2012 in order to avoid the likely higher tax rates on dividends starting next year. Shares of Disney rose 1.06% today.
Shares of UnitedHealth outpaced every other Dow component today, as they moved higher by 3.05%. The health-care industry, which initially fought the Affordable Care Act, is now switching sides and actually helping it. Bloomberg reported today that Aetna (NYSE: AET ) and other insurers have teamed up with Enroll America, and other non-profit organizations, to get all of the 43 million uninsured Americans covered under the new health-care law. Many believe that the new customers will offset the higher costs which the insurers will now be legally required to take on. Now that the insurers themselves are on board with the law, perhaps investors are beginning to believe that the more customers/lower cost formula is correct.
Reports have been flying that Chinese construction equipment manufacturers are attempting to take away business from Caterpillar, but Caterpillar Group President Ed Rapp made it clear that the company will not be lying down for the Chinese. In a recent statement he said:
We're bringing our game to China, the best way to beat Chinese outside of China is to compete and win with them inside of China.
Clearly, Caterpillar is ready for a fight, and intends to go to battle on the visitor's turf. Shares of Caterpillar moved higher by 1.54% today, the second biggest move to the upside, behind UnitedHealth.
Caterpillar is the market share leader in an industry in which size matters, and 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.