How 3 Dow Stocks Avoided the Market Blues

When the U.S. has a slow news day, it often turns to international markets for inspiration. Today, stocks got conflicting news from two important Asian economies. On one hand, Japan's stock market spiked up about 5% on an even greater expansion in the nation's gross domestic product than initially projected. But China weighed in with less optimistic news, with a sluggish 1% growth rate in exports and two important measures of credit activity in the emerging-market nation falling precipitously during May compared with the previous month. In the U.S., stock investors essentially split the difference, with the Dow Jones Industrials (DJINDICES: ^DJI  ) finishing down just 10 points and with broader markets posting mixed results.

But the Dow had several pockets of strength today. UnitedHealth Group (NYSE: UNH  ) picked up 1.8% after the company got an upgrade from a Wall Street analyst. But UnitedHealth presents a couple of interesting opportunities for investors. First, although some aren't certain whether Obamacare will help or hurt insurance companies, it doesn't seem to have hurt UnitedHealth substantially at this point. Perhaps more importantly, the company's drive to look abroad for growth opportunities in Brazil could make UnitedHealth less vulnerable to Obamacare and other political action concerning health insurance.

Intel (NASDAQ: INTC  ) also climbed, rising 1.7% in response to an analyst upgrade of its own. With its recent victory in winning a place in the Samsung Galaxy Tab 3, Intel finally made a highly publicized entry into the mobile space. But where Intel's best prospects may lie is from lower-end mobile chips, as Intel's rivals haven't focused on the low-end segment as much, leaving a vacuum that Intel can fill. Once it builds a strong foothold there, then moving upward to higher-end chips will be much easier than simply jumping in head-first into the top-of-the-line business.

Finally, AT&T (NYSE: T  ) gained 1.5% as the company decided to force customers to wait 24 months before they can upgrade to newer models of subsidized phones. The move mimics what rival Verizon (NYSE: VZ  ) did with its Verizon Wireless customers, but by making the upgrade cycle match with the usual 24-month contract for subsidized phones, it eliminates nearly all of the incentives for upgrading in the first place. Still, with customers thus far largely willing to pay both AT&T and Verizon for high-cost monthly plans in exchange for subsidies, the move isn't likely to change customer behavior and could lead to further profits.

When it comes to dominating markets, it doesn't get much better than Intel's position in the PC microprocessor arena. However, that market is maturing, and Intel finds itself in a precarious situation longer term if it doesn't find new avenues for growth. In this premium research report on Intel, a Motley Fool analyst runs through all of the key topics investors should understand about the chip giant. Click here now to learn more.


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  • Report this Comment On June 11, 2013, at 4:19 AM, chris293 wrote:

    Upward movement is what good stable companies do with or ahead of the rest of the market. This article points this out by the companies being able to adjust and change as needed.

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