Dow Gains Back Yesterday's Loss

After losing 114 points yesterday in just the last few hours of trading, the Dow Jones Industrial Average (DJINDICES: ^DJI  )  at 1 p.m. EDT was up 128 points, or 0.77%, the S&P 500 rose 0.65%, and the Nasdaq climbed 0.47%. The moves higher are likely just investors realizing yesterday's fall was an overblown overreaction to what should be seen as good news for the economy.

The Federal Reserve's decision to continue tapering its asset purchases to $55 billion per month means it sees the economy as healthy enough to survive on less support. New Fed Chairwoman Janet Yellen also suggested short-term rates could begin to increase roughly half a year after the central bank's stimulus program is wrapped up.

While there may be some tough days ahead when interest rates do rise, and investors and businesses realize the days of free money are over, the taper is the best thing for the economy and a sign things are improving.

Only five Dow components were trading in the red in early afternoon, while 11 components are up more than 1%. The three biggest winners (all on little news) were AT&T (NYSE: T  ) , up 2%, JPMorgan Chase, up 3.4%, and Microsoft, up 3.1%. AT&T's dividend yield is now 5.6%. That is a very healthy amount for any company, but as such a stable and reliable blue-chip stock, the telecom looks like a diamond in the rough.

Ex-Dow component Hewlett-Packard (NYSE: HPQ  )  moved higher by 2.1% after announcing it would increase the quarterly dividend by 10.2%. The previous quarterly payout of $0.145 per share was increased to $0.16. The one catch is that the upcoming payout on April 2 will remain at the old amount. While investors should certainly cheer the payout hike, this move may say more about the health of the company. The ship seems to be turning around and this is a sign that management believes the situation will get even better ahead.  

Shares of Internet radio company Pandora (NYSE: P  ) are down almost 1% at this time. The move follows the announcement yesterday that the monthly subscription service fee was increasing by $1 per month. Shares opened higher on the announcement yesterday, but ended the day in the red after investors began to really consider the impact this move may have on customers. With a number of other different music products and services available, giving consumers a reason to switch doesn't seem to be the best idea. Additionally, a new report indicated that the Beats Music service signed up 1,000 customer a day for the first month at a price of $9.99. These are customers who have the chance to use Pandora for a much cheaper price, but decided Beats is a better service and worth paying more money for.   

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