After three straight days of 100-point swings last week, the Dow Jones Industrial Average (DJINDICES:^DJI) finally settled down on Monday. Financials stood out as Europe's central bank reassured markets, vowing to cut interest rates to new lows if the economy needs further stimulation moving forward. But a major settlement right here in the U.S. also helped banks rally. The blue-chip index ended the day almost precisely sideways, shedding 5 points, or less than 0.1%, to close at 14,968.
Far and away the standout winner of the Dow, Bank of America (NYSE:BAC) shares surged 5.2% after the company agreed to settle all litigation with bond insurer MBIA for $1.6 billion. The settlement shows the continued resolve of the bank to fix the many legal problems left over after the financial crisis. But B of A didn't just shell out money today -- it also obtained the right to buy nearly 10 million shares of MBIA at about a 33% discount to today's prices in the next five years.
It's hard to match that kind of advance, but UnitedHealth Group (NYSE:UNH) saw impressive gains of its own after a positive analyst brought bulls out in force. Rallying 2.2% on a JPMorgan (NYSE:JPM) analyst's overweight rating, investors showed renewed confidence in the ability of the health insurer to attract customers to its Medicare Advantage programs in the coming years.
JPMorgan's stock was another standout performer today, benefiting from the rally in financials as shares added 1.3%. The interest rate announcement from the ECB gave Wall Street renewed confidence that European fiscal woes won't spread across the pond. And with the stock paying a 3.2% annual dividend and trading at just eight times forward earnings, today's gains are understandable.
But high dividends alone aren't always compelling enough to keep shareholders interested. Today's top Dow loser, Merck (NYSE:MRK), lost 1.5% on continued fallout from an underwhelming earnings report last week. With declining sales resulting from the dreaded "patent cliff," shareholders will be looking to new drugs in the pipeline for growth.