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4 Dow Winners That Defied IBM's Drop

By Dan Caplinger - Apr 19, 2013 at 8:00PM

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The Dow's gain looks tiny, but overcoming IBM's plunge was a feat for these stocks.

After a week of huge moves for the stock market, today's 10-point gain for the Dow Jones Industrials (^DJI 1.28%) might have the appearance of a sluggish, dull day of trading. But the slight gain is actually a huge feat, given the 130 points of downward pressure that IBM put on the Dow after its horrible earnings report.

The Dow got a lot of help from substantial gains among a wide swath of its component stocks. Microsoft (MSFT 1.71%) climbed 3.4% on a stronger-than-expected earnings report last night. With an 18% gain in earnings per share and a similar growth rate for revenue, Microsoft managed to see strength from its business division, and even its Windows unit posted good results. Yet as Fool contributor Dan Dzombak noted earlier today, deferred revenue related to upgrade offers skewed the results somewhat, calling into question whether the report accurately reflects Microsoft's prospects going forward.

American Express (AXP 2.75%) followed through on its positive earnings report from earlier in the week, matching Microsoft's 3.4% rise. The key driver for the charge card giant is economic activity, especially at the consumer level, as greater consumer confidence means more purchases on AmEx's cards, creating more revenue for the company. With efforts like its Bluebird card designed to expand its exposure to customer spending patterns, AmEx has tied itself even more to the general prospects of the economy.

Elsewhere in the Dow, Verizon (VZ 0.73%) climbed another 2.6%, building on nice gains yesterday after releasing its quarterly figures. Investors may have focused on comments that the company made about its potentially acquiring the remainder of its Verizon Wireless joint venture from Vodafone, which currently owns a 45% stake. Even though the company has ruled out certain potential structures for a big deal with Vodafone, investors remain convinced that somehow, Verizon will find a way to take full control of its wireless business.

Finally, Disney (DIS 0.05%) rose 2.6% as rival theme park SeaWorld went public today. The hugely positive performance for the IPO shows the value of theme park entertainment, and with Disney having the quintessential theme parks in the world, SeaWorld's success reflects well on the multimedia entertainment giant as well.

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Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$31,661.71 (1.28%) $399.86
Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$256.88 (1.71%) $4.33
The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$102.47 (0.05%) $0.05
American Express Company Stock Quote
American Express Company
AXP
$157.46 (2.75%) $4.22
Verizon Communications Inc. Stock Quote
Verizon Communications Inc.
VZ
$49.89 (0.73%) $0.36

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

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