Morning Dow Report: Why Today's Rally Is About More Than Banks

Many investors are focusing on favorable bank earnings, but there's a lot more to the Dow's gains today. Watch why Verizon, AT&T, and Caterpillar are climbing.

Jan 15, 2014 at 11:00AM

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 stock market this morning built on the upward momentum it created yesterday, with the Dow Jones Industrials (DJINDICES:^DJI) picking almost 100 points as of 11 a.m. EST. Although much of investors' attention focused on the financial industry, where earnings have provided an upbeat view of the economy and the market, other big pockets of strength helped the Dow today. In particular, telecoms Verizon (NYSE:VZ) and AT&T (NYSE:T) posted sizable gains, while even lagging industrial giant Caterpillar (NYSE:CAT) weighed in with a good performance.

Verizon and AT&T were both up between 1% and 2% after a key federal appeals court ruling that the FCC had overstepped its authority in imposing net neutrality rules on Verizon. As a result of the decision, Verizon, AT&T, and other Internet-service providers will be able to charge different rates to various content providers, allowing them to use price discrimination against high-volume users like streaming video services. The big question is whether the decision will allow the ISPs to compete more effectively with their own content-delivery services, potentially creating exactly the anticompetitive environment that the FCC had hoped to avoid. For now, though, telecom investors see potential profit gains as a result of the decision -- absent an appeal to the Supreme Court or other steps the FCC could take to limit the impact of the ruling.

Meanwhile, Caterpillar soared nearly 2% as hopes emerge that the long-dormant construction and infrastructure industries could finally start to pull their weight in the economic recovery. Appearing before the House Transportation and Infrastructure Committee yesterday, a Caterpillar executive urged lawmakers to make necessary upgrades to the nation's infrastructure system in order to help U.S. industry compete globally. With the perception that other countries are gaining a lead in infrastructure, and with cheap energy supplies bringing the potential for a return of manufacturing facilities domestically, Caterpillar hopes that a turnaround in activity will help bolster its own flagging revenue. Favorable news from the Federal Reserve Bank of New York about manufacturing activity in the New York region also raised hopes for the company.

Finally, outside the Dow, expect dividends to continue being an important part of any stock market advance. General Motors (NYSE:GM) gave investors welcome news late yesterday, reinstating a dividend for the first time since emerging from bankruptcy and paying a 3% yield. The stock fell 2% this morning on other news that GM expects only modest growth this year, but nevertheless, the marketwide trend toward higher dividends should give investors enthusiasm going forward.

Why dividends are so important
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers