Dow Wavers on GDP Report

With consumer confidence falling in April and gross domestic product in the first quarter coming in lower than expected, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) was lucky to eke out any gains at all today. It was the fourth gain in five days for blue chips, which had their worst week of the year last week but added back more than 1% as a flurry of earnings helped the comeback. The Dow ended up 11 points, or less than 0.1%, on Friday to close at 14,712. 

Wall Street thought Hewlett-Packard (NYSE: HPQ  ) shares looked undervalued today, and even after adding 1.9% Friday, shares traded at less than six times forward earnings. Rebounding from losses yesterday, HP posted the highest gains in the index today. In recent years the company has felt the brutal impact of the PC market decline, and its stock took the biggest hit in the index last year. So while the bullishness of 2013 -- the stock is up more than 40% year to date -- reflects some optimism about CEO Meg Whitman's turnaround efforts, the stock is still rallying from fairly depressed levels. 

Yes, oil prices fell 7.5% across the globe, and yes, Chevron's (NYSE: CVX  ) earnings dropped 4.5% in the first quarter, yet shares still added 1.3% today after the energy giant reported. While oil production slipped, increased traction in the natural gas business showed some promise, as natural gas sales rose 3.2%. 

BB&T upgraded its rating of Boeing's (NYSE: BA  ) stock from a hold to a buy, and the aerospace giant responded by adding 1.3%. BB&T's new price target of $110 was echoed the day before by Barclays and its overweight rating on Boeing shares. Yesterday, Boeing received approval from the FAA for its 787 Dreamliner planes to return to the air for United Airlines.

Aluminum giant Alcoa (NYSE: AA  ) ended as the worst performer in the index Friday, slipping 1.4% after slipping prices in the metal caused Standard & Poor's to downgrade the company's credit rating. Not good for Alcoa, which will have to pay a higher rate for money it wants to borrow going forward.

Materials industries are traditionally known for their high barriers to entry, and the aluminum industry is no exception. Controlling about 15% of global production in this highly consolidated industry, Alcoa is in prime position to take advantage of growth that some expect will lead to total industry revenue approaching $160 billion by 2017. Based on this prospect and several other company-specific factors, Alcoa is certainly worth a closer look. For a Foolish investment perspective on this global giant simply click here now to get started.


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  • Report this Comment On April 27, 2013, at 10:41 AM, zukerman wrote:

    Our analytical community has a record equal to that of the local weatherman, only one wont try to hurt you. Was I the only one that wasn't surprised that our 1st quarter GDP hadn't reached the 3% mark after recording .4 in the previous quarter? Time after time we see inflated expectations in the numbers from some analysts firms only to see them rush to the presses to shout that we might be headed for that dreaded double dip. These attempts to cause lower entry points for shares of stocks that are the most sensitive to fluctuations are age old and apparently meaningless to the smart investor. Congrats to Wall Street and all that held firm this week. Within a week we'll start hearing the sell in May and go away with scattered sector rotation banter again so be ready if you think it will repeat. Be smart and trust your instincts, you'll do fine when it comes to gaming the gamers.

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