The Dow Breaks Its Slump, Led by Bank of America

Stocks have taken a beating over the past two weeks, but Wall Street's getting a welcome moment of respite today. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) has shaken off the recent big drops to gain 106 points by 2:25 p.m. EDT. Strong economic news came in today: Durable-goods orders rose more than 3% in May, and new-home sales rose more than 2% for the month -- two signs that show the economy is still churning slowly higher, even if the market's recent downward swing hasn't shown it. Stocks are mostly in the green today, so let's take a look at the movers and shakers.

Big banks on the rise
Big banks are leading the charge higher today, with Bank of America (NYSE: BAC  ) out in front of the Dow, up 2.7%. B of A has risen sharply over the recent past, especially with last year's Dow-leading gains, but the company faces enough scrutiny and litigation to overshadow its stock's run-up.

The recent furor over the Home Affordable Modification Program, in which Bank of America employees allegedly were rewarded for denying or delaying mortgage modifications in order to push foreclosures, is just the latest PR blow. With the Countrywide Financial problems still fresh in everyone's minds, it will take time for Bank of America to salvage its reputation -- whether it's guilty of the HAMP allegations or not.

Another hard-hit company is among today's leaders, but at least Hewlett-Packard (NYSE: HPQ  ) is showing signs that it's moving in the right direction. The tech giant's shares are up 1.6% today, and while HP is still heavily reliant on the ailing PC market for sales, CEO Meg Whitman is turning to the right sources of growth for HP's future.

HP is looking to contend with tech leader IBM in data mining and analysis. It recently fired a shot at Big Blue, showing off its HAVEn data-analysis software. Big data is part of Meg Whitman's strategy to return HP to profitability soon and put the recent PC market's crash and the nearly $9 billion writedown of the company's Autonomy acquisition out of shareholders' minds. The company's turnaround won't likely be complete for a couple of years, but HP is showing signs of life.

Finally, Merck's (NYSE: MRK  ) among a few Dow stocks failing to generate any momentum today. The pharma giant's shares are treading water despite its big victory today: An Indian court granted Merck an injunction against a local firm looking to provide generic versions of Merck's two patented diabetes drugs, Januvia and Janumet. The diabetes therapies have emerged as Merck's dynamic duo of blockbusters, growing to nearly $6 billion in sales last year. Considering that India's population is a hotbed of diabetes, the country's a major area of interest for Merck, which has lost sales to the patent cliff.

Can overseas returns power up your portfolio?
Merck might be looking for sales abroad, but is international investing the right strategy for you? Fear not, because profiting from our increasingly global economy can be as easy as investing in your own backyard. The Motley Fool's free report "3 American Companies Set to Dominate the World" shows you how. Click here to get your free copy before it's gone.


Read/Post Comments (0) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2508888, ~/Articles/ArticleHandler.aspx, 10/30/2014 12:45:51 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement