Earnings season began this week with a whimper. Alcoa (NYSE:AA) reported results that were largely in line with expectations, and despite a slightly positive outlook for 2013, markets moved slightly only higher for the week. In the end, the Dow Jones Industrial Average (DJINDICES:^DJI) was up 0.40% this week, and the S&P 500 (SNPINDEX:^GSPC) gained 0.38%.
There were some big movers on the Dow this week. Hewlett-Packard (NYSE:HPQ) rose 6.7% as the stock continues to recover from major losses after it announced its Autonomy writedown. This week brought renewed talk of a possible breakup, with the notion this time coming from Bernstein Research analyst Toni Sacconaghi -- and for the time being, investors have bought into the idea. This is something of a dead-cat bounce for HP. It's tough to argue that the business is healthy, so I'd approach the stock with caution.
Intel (NASDAQ:INTC) was the second biggest winner on the Dow, gaining 4% this week. Holiday PC sales fell 6.4% in 2012, but Microsoft (NASDAQ:MSFT) announced that it had sold 60 million Windows 8 licenses as of Jan. 8. This was a strange holiday season for the PC, with consumers tepid about the new Windows operating system, which hurt Intel as a result. But the coming quarters may not be so bad: Helping Intel was an announcement that Lenovo will sell a smartphone based on Intel's latest chip. Smartphones are an untapped market for Intel, so any wins on that front would be big news.
Merck (NYSE:MRK) was up 3% this week, and investors were buying bad news on Friday. The company began recalling Tredaptive, a drug that was supposed to raise "good" cholesterol.The product is relatively small, generating less than $20 million of sales, so the news didn't dissuade investors from buying this week. With a 11.7 forward P/E ratio and a 4% dividend yield, the stock is still trading in a reasonable range in a steady health-care field.
Travis Hoium manages an account that owns shares of Microsoft and Intel. The Motley Fool recommends Intel and owns shares of Intel and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.