The Dow Rallies Behind the Fed for a Triple-Digit Gain

Disney rises among the Dow's gainers today as aluminum stock Alcoa jumps after earnings.

Apr 9, 2014 at 2:30PM
Daily Fool

Stocks pulled sharply higher in afternoon trading after the Federal Reserve released the minutes from its latest policy meeting, with the Dow Jones Industrial Average (DJINDICES:^DJI) up 155 points as of 2:30 p.m. EDT. Dow component Disney (NYSE:DIS) rose nearly 1% to maintain its recent run, while former index member Alcoa (NYSE:AA) has built a great showing following its optimistic earnings report after the closing bell yesterday. Let's catch up on what you need to know.

Disney's unstoppable climb
There's seemingly no stopping this entertainment giant's stock. Shares of the House of Mouse are up more than 4% year to date, outrunning the market's up-and-down 2014 and keeping up a 34% gain over the past year. Disney's had no shortage of success at the box office, and investors can expect another run this month after the company's latest film from its Marvel subsidiary, Captain America: The Winter Soldier, hauled in more than $96 million in its opening weekend, the largest April film launch ever. Perhaps most surprisingly, Winter Soldier dominated across the Pacific in China, drawing more than $39 million in the world's second-largest economy.

Images

Disney's success leans heavily on revenue from its largest businesses, particularly its media networks division where sales have soared thanks to rising advertising rates and affiliate fees at channels such as ESPN. But the success of the company's recent films, from Marvel superheroes to animated features, lends credence to the belief that Disney's stock isn't headed for a reversal of fortune anytime soon. Disney's forward price-to-earnings ratio of 17.4 doesn't look too pricey to capitalize on this entertainment stock's success despite its recent run-up.

Outside the Dow, Alcoa has gained more than 3% on long-awaited good news for investors who have weathered depressed prices and oversupply in the aluminum industry for years. Alcoa projected that demand finally will overtake supply in 2014, the ultimate result of production and facility cuts from Alcoa and other major producers as output from China has skyrocketed in the recent past and flooded the market. The problem hit earnings hard around the industry and contributed to the mere 40% gain in Alcoa's stock over the past five years.

A turnaround would further improve upon what's been a fantastic year so far for Alcoa, as shares of the company are up more than 18% year to date. The company's first-quarter numbers themselves didn't quite impress, as sales declined by 6% year over year despite beating analyst expectations with $5.5 billion in quarterly revenue. Alcoa's earnings also crumbled to a $0.16 per-share loss in the first quarter from a $0.13 per-share gain a year ago. Still, while the first quarter didn't offer much strength, if Alcoa's projections about aluminum supply finally come true, it's a bright spot of hope for investors who have shouldered years of struggle from this industry. Keep an eye on the long term with this stock.

Can Alcoa become your top stock in 2014?
Alcoa's shares have struggled for years now, but the future always holds hope for strong companies. However, as the best investors know, there's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Walt Disney. The Motley Fool owns shares of Walt Disney. 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 fool.com.

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 www.fool.com/beginners, 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 www.fool.com/podcasts.

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