Please ensure Javascript is enabled for purposes of website accessibility

The Reason Stocks Are Surging Today

By John Maxfield - Apr 25, 2013 at 3:30PM

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

Here's why the Dow is up today.

Blue-chip stocks are broadly higher today after government statistics showed that the unemployment situation is improving faster than expected. With roughly an hour left in the trading session, the Dow Jones Industrial Average (^DJI -0.92%) is up by 86 points, or 0.58%.

This morning, the Labor Department released its weekly estimate of jobless claims -- click here to see the official press release. According to the report, the number of Americans applying for unemployment benefits last week fell to a near five-year low. The figure declined by 16,000, to a seasonally adjusted 339,000. Meanwhile, economists surveyed by MarketWatch.com had expected the figure to come in at 351,000.

According to an economist quoted by The Wall Street Journal, "The drop in claims reinforces our view that the sudden weakening in the data in March was more technical than fundamental, likely due in part at least to the swing in the weather to colder-than-usual from milder-than-usual earlier."

Earnings season is also exerting its influence on the market today, as a number of bellwether companies reported their financial results from the first three months of the year. The industrial conglomerate 3M (MMM -1.54%) came in below expectations, with earnings per share of $1.61, versus the consensus estimate of $1.65. On top of this, the company lowered its forward guidance blaming a "stronger U.S. dollar and softer demand in some end markets." Share of 3M are down by 2.7% at the time of writing.

The oil giant ExxonMobil (XOM -0.83%) is also seeing its shares fall despite beating bottom-line estimates. For the quarter, Exxon earned $2.12 per share. Analysts polled by Thomson Reuters had forecast earnings of $2.05 per share. Investors' discontent, in turn, is stemming from the company's falling revenue. In the same period last year, the company reported $124 billion in total revenue and other income. This year, it reported only $108 billion.

And finally, shares of UPS (UPS -2.72%) are headed higher on the heels of its better-than-expected first-quarter performance. The shipping giant notched a 9% improvement in its operating profit on a year-over-year basis, attributing the gain to increased volume from e-commerce sales -- click here for the earnings release (link opens PDF). Unlike 3M, moreover, UPS reaffirmed its guidance for the remainder of the year. According to its chief financial officer, "Although macro uncertainty remains, we are reaffirming our 2013 guidance for full year adjusted diluted earnings per share to be within a range of $4.80 to $5.06."

Speaking of e-commerce, Amazon.com is scheduled to report its own results after the closing bell today. The consensus estimate on its earnings is for $0.28 per share, roughly in line with last year.

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

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$31,199.35 (-0.92%) $-286.46
Exxon Mobil Corporation Stock Quote
Exxon Mobil Corporation
XOM
$89.90 (-0.83%) $0.75
3M Company Stock Quote
3M Company
MMM
$146.63 (-1.54%) $-2.30
United Parcel Service, Inc. Stock Quote
United Parcel Service, Inc.
UPS
$167.55 (-2.72%) $-4.68

*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
328%
 
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.