Falling World Markets Don’t Affect the Dow Today

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Although the Japanese stock market tanked last night, U.S. markets rebounded nicely after the Dow Jones Industrial Average (DJINDICES: ^DJI  ) closed lower three days in a row. After falling 252 points over the past three sessions, the blue chip index was higher by 180 points, or 1.21%, when the closing bell rang on Wall Street today. The S&P 500 also increased today, by 1.48% while the Nasdaq gained 1.32%.

A number of economic indicators were released today. Retail sales were up 0.6% in May, business inventories rose 0.3% in April, and initial unemployment claims fell by 12,000, to 334,000 last week. As a whole, the information that came out today was positive, and that gave U.S. investors the confidence to push stocks higher. But, not all of the Dow's big winners today were simply riding the wave of good economic data.

Shares of Boeing (NYSE: BA  ) moved higher today by 1.27%. The company recently received an "overweight" rating from Morgan Stanley, which likely helped push the stock higher. Analyst John Godyn views the aerospace industry as being in a good position, as global traffic growth continues to climb, and easy financing has helped airlines purchase new planes. Boeing also announced earlier this week that the company sees future demand for 35,000 planes over the next 20 years, and potential revenue of $4.8 trillion. 

Both of the Dow's pharmaceutical stocks rose higher today. Pfizer (NYSE: PFE  ) gained 2.29%, while Merck (NYSE: MRK  ) increased by 2.31%. One reason the two companies may have moved higher was the announcement earlier in the week that Pfizer had settled a lawsuit with Teva Pharmaceuticals and Takeda for $2.15 billion. The lawsuit was a patent infringement case, and marks a big win for the name-brand drug manufacturers. This settlement should send a stern warning that it's not worth the risk of infringing on a patent, because the penalty in this case was likely more than what the generic versions of the drug even made in revenue. Once you take into account the cost of research and manufacturing the drug, and now this settlement check, Teva and Takeda are surly in the red when it comes to this drug. 

Caterpillar (NYSE: CAT  ) also performed well today after the company announced a 15% dividend increase. The company's previous quarterly dividend of $0.52 per share was increased to $0.60 per share, for an annual payment of $2.40, and a current yield of 2.9%. Shareholders on record as of July 22 will receive the higher payment. Shares rose by 2.32% today on the news. While I don't believe an investor should buy or sell a stock only because of a dividend increase or decrease, these moves do tell investors a little about what management thinks about the company's current financial position. When we see an increase, we assume that things are going well, while a decrease usually indicates that the company needs to keep cash because business is hurting.

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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Related Tickers

9/29/2016 4:35 PM
^DJI $18143.45 Down -195.79 -1.07%
BA $131.03 Down -1.20 -0.91%
Boeing CAPS Rating: ****
CAT $87.47 Up +0.88 +1.02%
Caterpillar CAPS Rating: ***
MRK $61.91 Down -1.39 -2.20%
Merck and Co. CAPS Rating: ****
PFE $33.32 Down -0.67 -1.97%
Pfizer CAPS Rating: ****