Today's 24-point drop for the Dow Jones Industrials (^DJI 0.69%) comes as no big surprise to those following the fiscal cliff debate in Washington. With a lack of progress toward coming together on a trillion-dollar accord to raise tax revenue and cut government spending, investors finally look like they may be getting impatient. Yet despite relatively light post-holiday trading activity, the market's movements have been quite muted.
One peculiarity of the Dow is that as a price-weighted average, stocks with low share prices don't have much impact on the Dow. So when the three lowest-priced stocks in the Dow were all winners today, it's important to remember that their collective gains were more than wiped out by UnitedHealth's (UNH -1.03%) 1% decline in the face of uncertainty about the fiscal cliff's potential impact on the health insurer.
For instance, Bank of America (BAC 1.70%) was the big winner in the Dow today, but its gain amounted to just $0.29 per share. As the top performer in the Dow in 2012, B of A has already doubled in price this year, and with positive news from the Case-Shiller index of home prices showing gains of 4.3% over the past year, the bank's mortgage portfolio could see its overall quality improve simply from better overall market conditions.
Alcoa's (AA) 1.3% gain was just an $0.11 move in share price. A positive report from Bloomberg pointed to the possibility that even though aluminum supplies remain extremely high, prices of the lightweight metal could nevertheless rise. Given how much Alcoa has suffered from low aluminum prices in recent years, any sign of perking up for the market tends to ignite investors' hopes.
Finally, Hewlett-Packard (HPQ -0.11%) also picked up $0.11 per share, or 0.8%. Value investors have tried to pick a bottom for the beleaguered tech stock for some time, but as the end of the year approaches, the stock has faced stronger resistance after its roughly 20% gains from recent lows. What investors really need to see is a viable plan from HP before they can fairly assess whether it could be the next big turnaround story.
