Please ensure Javascript is enabled for purposes of website accessibility

These 3 Blue Chip Stocks Set Record Highs to Help the Stock Market Recover Tuesday

By Dan Caplinger - Feb 23, 2021 at 5:34PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A big bounce kept investors calm.

The stock market ended Tuesday mixed, and that was a far cry from where it started the day. All three major market benchmarks started out deeply in the red, but rising optimism about the possibility of broader economic growth helped pull the Dow Jones Industrial Average (^DJI -0.75%) and S&P 500 (^GSPC -0.58%) into positive territory. Even though the Nasdaq Composite (^IXIC 0.00%) lagged, it was still far off its worst levels of the day.

Index

Percentage Change

Point Change

Dow

+0.05%

+16

S&P 500

+0.13%

+5

Nasdaq Composite

(0.50%)

(68)

Data source: Yahoo! Finance.

Blue chip stocks are often where people turn when there's turmoil in the stock market. Today, that proved to be the case, as Disney (DIS -1.11%), Caterpillar (CAT -0.57%), and JPMorgan Chase (JPM -1.48%) all managed to post gains and finish at all-time record levels. Let's look more closely at these companies to see what lifted their spirits on what started out as a gloomy day.

The mouse is in the house

Walt Disney climbed 3% on Tuesday, finishing within a hair's breadth of the $200 per-share level. The entertainment and media giant has been on fire for most of the past six months and is building momentum that could sustain it well into 2021.

It's hard to believe that just a year ago, Disney's prospects were highly in doubt. Even before the COVID-19 pandemic struck, many stock watchers were worried that the company would prove unable to transition from its dependence on the ESPN cable network. Early attempts at video streaming looked promising, but high levels of competition made success uncertain. The pandemic only added to the pressure, forcing closures of key theme parks and postponements of movie showings.

Magic Kingdom castle as seen from across a waterway near dawn.

Image source: Disney.

Fast forward to now, and Disney+ has been a saving grace for the company. Moreover, as optimism about coronavirus vaccines rises, investors look forward to Disney getting all of its growth drivers pulling the stock in the right direction. Disney has huge potential ahead, and today's all-time high could be just the beginning of a great story for the House of Mouse.

Building higher

Elsewhere, Caterpillar finished up about 1%, and that was enough to send the heavy construction-equipment giant to a new record. The stock has more than doubled since its lows a year ago, and Caterpillar investors hope that better times ahead will translate to greater commercial activity, as well.

Cyclical stocks like Caterpillar often turn before the actual economy does, and investors like to see them as a leading indicator. It therefore makes sense that the company's stock is gaining ground. As long as an economic recovery actually comes, that should work out fine for shareholders.

Unfortunately, nothing's certain in this environment. For now, though, Caterpillar has its investors excited about the future of an industry that's been struggling for quite a while.

Bank on growth

Finally, JPMorgan Chase finished higher by a bit less than 1%. The banking industry has done extremely well lately, and a lot has to do with expectations for future economic growth.

Long-term bond rates have been on the rise, as often happens when investors anticipate that people will start spending money again. That comes as a change from what we've seen for many years now, with steadily falling long-term bond rates that have helped to support the bull market in stocks.

Today, Fed Chairman Jerome Powell said that the central bank remains ready to keep interest rates low for the foreseeable future. Although its monetary policy largely focuses on short rates, the Fed can take what used to be considered extraordinary measures to buy long-term bonds to influence those rates. Nevertheless, there wasn't a big drop in longer-term yields today, and investors saw that as a positive for JPMorgan and its prospects for enjoying better net interest income results in 2021 and beyond.

Be on your toes

Markets have been volatile, and they're likely to stay that way. Embracing that volatility is important if you want to succeed in reaching your financial goals in the long run.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$103.14 (-1.11%) $-1.16
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$31,253.13 (-0.75%) $-236.94
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$3,900.79 (-0.58%) $-22.89
JPMorgan Chase & Co. Stock Quote
JPMorgan Chase & Co.
JPM
$118.31 (-1.48%) $-1.78
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
^IXIC
$11,418.15 (0.00%) $0.00
Caterpillar Inc. Stock Quote
Caterpillar Inc.
CAT
$206.76 (-0.57%) $-1.18

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
327%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.