Dow Jumps 180 Points, Led by Caterpillar Stock

After the year's first three-day decline in which the Dow Jones Industrial Average (DJINDICES: ^DJI  ) shed more than 250 points, blue chips bounced back Thursday, adding 180 points, or 1.2%, to close at 15,176. It wasn't just value investors swooping in to buy on a dip; today's gains were driven by improving retail sales and an improving labor market. With the recovery firmly under way, and proof continuing to pile, Caterpillar (NYSE: CAT  ) stock led the Dow higher today.

Caterpillar's stock surged 2.3% Thursday after union workers in Wisconsin agreed to freeze their wages for another six years, while instituting a lower pay rate for new employees. While the official deal hasn't yet been reached, it looks imminent, and should bring down labor costs for the industrial machinery company.

Tacking on 2.3% of its own, Pfizer (NYSE: PFE  ) was another of the day's top gainers, after news that the company and a partner will receive nearly $2.2 billion from two other pharmaceutical companies that illegally sold Pfizer's heartburn medication, Protonix. In 2008, Teva Pharmaceutical and Sun Pharmaceutical allegedly teamed up to sell generic versions of Protonix before it came off patent.

Wall Street was so bullish Thursday, that 28 of the 30 components in the Dow ended on a higher note. Diversified conglomerate 3M (NYSE: MMM  ) added 2% today. What's good for the broad economy -- less unemployment, higher consumer spending -- is good for 3M, which makes all types of products, from scotch tape to roofing granules to aerospace parts. As the third heaviest-weighted component in the price-weighted index, 3M's rise today played an important role in the Dow's rally.

Lastly, Microsoft (NASDAQ: MSFT  ) ended as one of only two decliners, falling 0.8%. As a whole, technology was the worst-performing sector in the markets Thursday, so that didn't help. Even a deal that dramatically improves Microsoft's distribution, an agreement with Best Buy to establish 600 Windows Stores inside locations across North America by the end of the summer, couldn't bring Microsoft into positive territory.

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 The Motley Fool's brand new report. Just click here to access it now.


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