2 Unlikely Winners Behind the Dow's 111-Point Rise

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  ) had its second strong day in a row today, as further progress on negotiations to reopen the government and raise the debt ceiling eased fears of a prolonged budget crisis. Despite the prospect of having to revisit the contentious issues in the near future, investors were pleased to see more conciliatory proposals on the table, and that optimism helped push the Dow up 111 points and created substantial gains for the stock market as a whole.

The top performer in the Dow was Johnson & Johnson, which rose almost 2% in response to a favorable analyst report touting the company's prospects in advance of its upcoming earnings report next Tuesday. But contributing the most on a point basis to the Dow's gains was Visa (NYSE: V  ) , which climbed more than $3 per share today.

Visa has a deceptively simple business model, with its card network providing the backbone for billions of electronic-payment transactions every month. Yet that simple model has produced the fastest revenue and operating earnings growth of any Dow company over the past five years. More short-sighted investors point to above-average valuations that Visa's stock fetches right now, but with the company having successfully fended off threats and turned them into opportunities, Visa has room for more share-price gains in the future.

The other top gainer in the Dow was Goldman Sachs (NYSE: GS  ) , which rose almost $2 per share. As a Wall Street giant, Goldman might not seem like a surprising winner on a strong day for the stock market. But earnings reports from its banking peers this morning hinted at how difficult a time Goldman might have had in the third quarter with its bond-trading business. Low interest rates encouraged massive underwriting of bond issues, and that helped bolster Goldman's profits.

With rates rising, Goldman could see a pullback in its trading results this quarter. But the investment bank is still working hard to take advantage of all its opportunities. As a player in the Twitter IPO, Goldman should reap rewards if the social offering goes well. More broadly, IPO activity has been on the rise, which could produce more business for Goldman. Next week will tell us more about how well Goldman has done with what it traditionally does well: adapting to market conditions and finding ways to profit.

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