American Express Stock Won't Succumb to a Sluggish Dow

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) has started the new week with a whimper, though it's getting plenty of help from American Express' (NYSE: AXP  ) gains. Despite the credit card giant's 1.4% share price gain, the Dow is down 20

points as of 2:25 p.m. EDT in what has been an up-and-down day so far. Stocks are mixed evenly between risers and gainers, but a few Dow members are making substantial moves today. Let's check out the biggest stories you need to know about.

American Express shakes off the Dow doldrums
American Express won't be held back by the Dow's gains today. The credit card stock has pulled in gains of 25% year to date for the fifth-best performance on the Dow in 2013. Shareholders got a boost last week when digital payment service Paymill began accepting American Express for its service, but this stock's steady rise has been about more than just singular events.

With consumers tentatively growing optimistic -- consumer confidence reached a nearly six-year high recently despite the tax hike earlier in the year and sequestration's budget cuts -- American Express and other credit card companies are poised to capitalize on the economy's recovery. On the other hand, credit cards and card debt are on a slow downswing, which is a dangerous trend for these companies in the very long term. But for now, at least, American Express investors have little reason to worry.

Joining American Express in the winners' circle today, Caterpillar (NYSE: CAT  ) stock has edged up 0.6%, even as the company's sales continue to fall. The industrial giant revealed today that total retail sales in the three months ending in April fell 9% -- an improvement on the prior-year quarter's 11% drop but still troubling for any turnaround investors. This stock is likely to struggle so long as economic conditions remain depressed in Europe and the recent Chinese slowdown continues. One beacon of hope for Caterpillar has been Latin America, where sales jumped 28% in the three-month period. However, a painful 18% drop in North American sales tempered that gain.

On the other side of the Dow, Cisco (NASDAQ: CSCO  ) shares continue to feel the fallout from last week's poor earnings result: The tech stock has lost another 1.9% today to lead the Dow lower. Despite the miss, Cisco's sales in emerging markets speak of a bright future for this company's geographical expansion. The company's India revenue climbed 29% in the last quarter, while China sales managed to gain 8% despite recent regional difficulties. If Cisco can continue to push into these technologically developing nations, it will be able to weather sales drops in other regions more easily in the future.

Finally, Merck (NYSE: MRK  ) shares are also on the downswing today, losing 1.6% to rank among the leading Dow laggards. The FDA confirmed the effectiveness of Merck's promising insomnia drug suvorexant today. This would ordinarily be a cause for celebration, but the agency also noted that the drug might only be safe at lower doses -- a judgment that disappointed investors. The FDA singled out the drug's potential to inflict daytime drowsiness, a condition that could impair driving. It's a tough blow for Merck, which has been looking to potential blockbuster drugs like suvorexant to help sales recover from the losses inflicted by patent expirations on top pharmaceuticals recently.

Can Merck beat the patent cliff?
This titan of the pharmaceutical industry stumbled into 2013 and continues to battle patent expirations and pipeline problems. Is Merck still a solid dividend play, or should investors be looking elsewhere? In a new premium research report on Merck, the Fool tackles all of the company's moving parts, its major market opportunities, and reasons to both buy and sell. To find out more, click here to claim your copy today.



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