Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
The Dow Jones Industrials (DJINDICES: ^DJI ) posted its third straight day of triple-digit gains today, picking up another 135 points to brings its three-day total gain to more than 400 points. On the 12th anniversary of the Sept. 11th attacks, the U.S. move to delay a final decision on potential military action against Syria pending a diplomatic resolution continued to support stocks. Without major economic data releases, investors seemed content to follow the market's past momentum higher, bringing September's gains to 3.5% and countering those who believed that seasonal trends could lead to continued losses for the Dow this month after a bad August.
A big part of the Dow's gain came from IBM (NYSE: IBM ) , whose 2.2% gain single-handedly accounted for about 30 points of the average's rise. Given that the rise equates to more than a $4 billion gain in market cap, it's hard to credit IBM's $505 million sale of its customer-care business as the true catalyst for the move. More likely is that given IBM's lackluster performance throughout the year, investors are simply getting a bit more optimistic about the company's overall growth prospects.
Disney (NYSE: DIS ) was a solid gainer for the second day in a row, rising 1.8%. Again, investors focused on news about the delayed fifth Pirates of the Caribbean movie, but another possible catalyst could have come from content-streamer Netflix (NASDAQ: NFLX ) . Netflix rallied yesterday, hitting a new record-high on news that Liberty Global's Virgin Media would offer the service in its cable-service set-top box. Investors considering second-order effects might realize that Disney stands to gain as much as Netflix from increased vehicles for content delivery, as every potential viewer raises the value Disney can charge for companies like Netflix to make their content available to their customers.
Finally, Alcoa (NYSE: AA ) powered ahead 1.7% despite facing imminent ejection from the Dow. The company complained to the London Metal Exchange that its proposed new rules for aluminum warehouses wouldn't address core problems among customers trying to manage their price exposure to the metal. Some aluminum-consuming businesses have argued that long delivery times have created added costs, but the last thing Alcoa wants to see is even greater supply of aluminum released onto the open market through greater withdrawals from warehouse storage.
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