It's been a riveting week for investors. After starting the shortened week up by 54 points on Tuesday, the Dow Jones Industrial Average (DJINDICES:^DJI) proceeded to crater. It fell by 108 points on Wednesday and an additional 47 points yesterday. Yet, if today's gains hold on for the next hour, the index will end the week flat. With a little more than an hour remaining in the trading session, the blue-chip index is up by 94 points, or 0.68%.
Stocks got an expected lift this morning from Europe. As my colleague Dan Dzombak noted earlier, a report out of Germany showed that business confidence in the continent's largest economy increased more than forecast this month. The Ifo Instute's index, which is based on a monthly survey of German firms in a variety of industries, climbed to 107.4 compared with a consensus estimate of 104.7. As an equity analyst told The Wall Street Journal: "From the U.S. perspective, Germany is a very industrial and export-oriented economy. If they're seeing optimism on their order books, then there's reason to be optimistic globally."
Beyond this, two blue-chip companies announced earnings after yesterday's close that comfortably exceeded expectations. Personal-computer maker Hewlett-Packard (NYSE:HPQ) reported earnings per share of $0.82 yesterday evening. While this was 11% below its year-ago figure, analysts were expecting an even more dismal $0.71 per share. On the heels of this news, shares in the struggling company are up more than 15% at the time of writing.
Meanwhile, insurance giant AIG (NYSE:AIG) reported a fourth-quarter loss that wasn't as large as some had feared. As fellow Fool Jessica Alling covers here, AIG lost $4 billion in the three months ended Dec. 31. Importantly, however, all of the loss came from two sources. It took a $4.4 billion charge from the sale of its aircraft-leasing business, while claims related to Hurricane Sandy cost the insurer $1.3 billion. "Don't be scared off by AIG's reported fourth-quarter loss," Jessica says, "as it doesn't provide the correct picture for you. Investors should consider the steps AIG has taken to improve its position after the financial crisis."
Heading lower, alternatively, are shares of Pfizer (NYSE:PFE) and UnitedHealth (NYSE:UNH). Both companies have seen their stocks decline after the proposed Medicare rates for next year were released. The prescription portion of the federal assistance declined by 4% last year and is now expected to follow suit in 2014. This is a direct affront to both Pfizer and UnitedHealth's bottom lines.