In a shortened pre-holiday session, few professional traders expect anything too exciting to happen. Even though geopolitical tensions are back in the news as Iran threatens to close the Strait of Hormuz, better-than-expected data on U.S. factory orders for May reversed an unexpected decline in orders during the previous month. That good news helped send the stock market modestly higher. By 10:45 a.m. EDT, the Dow Jones Industrials (INDEX: ^DJI) were up about 36 points.
Among Dow stocks, Alcoa (NYSE: AA) was the best performer, rising 3% and more than making up for yesterday's loss. The aluminum maker is highly sensitive to manufacturing and factory-related data, so it's not surprising to see the stock react positively to today's news. Moreover, earnings season is just about to begin, and if Alcoa can provide as big a positive surprise this time around as it did last quarter, it could get the season off to a strong start.
On the other side of the coin was Home Depot (NYSE: HD), which fell more than 2%. News sources cited a cut in the International Council of Shopping Centers' forecast for retail chain store sales, but what's more likely is simply that investors saw valuations get ahead of the home-improvement retail companies' prospects and consequently bid them lower.
Finally, both Chevron (NYSE: CVX) and ExxonMobil (NYSE: XOM) rose on higher oil prices following Iran's threats. After a big drop in crude oil, the recent bounce has only gained back a portion of those losses, but energy companies are poised to rise sharply if tensions in the Persian Gulf persist.
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