This Week's Top Stocks on the Dow

Earnings season was in full swing on Wall Street this week, but despite some major individual stock swings, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) moved only 21 points higher. For every positive earnings report there was a negative one, especially in banking, where investors couldn't decide whether conditions are getting better or worse. At the end of the week, there were a few big movers on the Dow.

Visa (NYSE: V  ) led the Dow with a 5% gain this week. Ironically, it was strong earnings from American Express (NYSE: AXP  ) that got investors excited about Visa. Despite the challenges brick-and-mortar retailers faced during the holidays, the Commerce Department said retail sales were up 0.7% last month and online sales drove spending growth. The good thing for Visa is that most online sales are done with a credit card, and more transactions means more profit. We'll learn more on Jan. 30, when Visa reports earnings, but the trends look to be moving in its direction.

Merck (NYSE: MRK  ) was up 4.2% for the week after saying it will seek early approval of a drug that treats cancer. MK-3475 is a high potential drug that's being tested for more than 10 kinds of cancer, but skin cancer is where Merck wants to get accelerated approval. The company has already started the application and is expected to complete it in the first half of the year. Pharmaceutical companies have had a hard time keeping their pipelines full of valuable drugs, so if this one works as Merck hopes, it can be a game-changer.  

Finally, American Express was up 2.7% this week after reporting that net income more than doubled to $1.31 billion, or $1.21 per share. Billed business, which is a measure of spending by cardholders, was up 7.9% to $254 billion as affluent consumers spent more. You can see why American Express and Visa's investors got so excited with an increase in spending like that. I think all of the credit card companies are set up perfectly for the future, because whether consumers are buying online or in-store, they're using cards. American Express rode that wave to profit growth last quarter and a nice gain this week.

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