Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
After falling for three consecutive days, the Dow Jones Industrial Average (DJINDICES:^DJI) finally managed to close higher today. The Dow rose 27 points, or 0.18%, to 15,498 this afternoon while the S&P 500 increased by 0.39% and the Nasdaq rose 0.41%. One reason the markets as a whole moved higher today was the positive data on unemployment claims. The Department of Labor reported that only 333,000 were filed and that the four-week running average has now fallen to 335,000. This is great news for the economy as a whole as it indicates that we are close to what economists consider normal churn for the job market.
Caterpillar (NYSE:CAT) and Alcoa (NYSE:AA) moved higher after positive economic data from China was released. Data from the Customs Administration indicated that exports from China rose 5.1% in July when compared to a year ago while imports rose 10.9% during the month when compared to last year. Economists had only expected a 3% rise in exports and little more than a 2% rise in imports, so the report was a very strong surprise. The report indicates that China's economy may finally be turning the corner to what has been a long and painful period where the country's growth has weakened.
Both Caterpillar and Alcoa heavily rely on China, and have experienced a very rough few years as the world's second-largest economy struggled. Today's report may be the turning point for the two companies, which are currently down 6.3% and 8.87%, respectively, year to date. If today's report is not a onetime occurrence, investors could expect both Caterpillar and Alcoa to continue to have days when their stock prices rise 1.86% and 1.4%, respectively.
Lastly, shares of Microsoft (NASDAQ:MSFT) outperformed the majority of the other Dow components after the stock received an upgrade. Evercore Partners changed its rating on Microsoft from equal weight to overweight and raised its price target on the stock to $38. The analyst cited a strong enterprise business and that, due to the lower-than-usual sentiment around Windows, the company could experience a big win in the coming months if things turn around for that software division. Shares of Microsoft rose 2.58% today, making it the best-performing Dow component.
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