Why Corning, Federal-Mogul, and Canadian Pacific Soared Today

Even though the S&P 500 backed off from record highs, Corning picked up 14%, while Canadian Pacific climbed 9% and Federal-Mogul soared 24%. Here's why.

Dan Caplinger
Dan Caplinger
Oct 23, 2013 at 8:01PM

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.

The stock market gave back some of its recent gains today, with the S&P 500 (SNPINDEX:^GSPC) falling about half a percent as earnings results from Caterpillar raised new questions about the strength of the global economy. But despite those broad-market losses, Corning (NYSE:GLW), Federal-Mogul (NASDAQ:FDML), and Canadian Pacific (NYSE:CP) bucked the downward trend to post substantial gains today. Let's take a closer look to find out why those three stocks soared today.

Corning climbed 14% as investors reacted favorably to its announcement that it will broaden its relationship with Samsung subsidiary Samsung Display. The deal will involve Samsung giving up its 43% stake its LCD-glass joint venture with Corning, but in exchange, Samsung will take a 7.4% direct stake in Corning shares. Corning investors have to hope that the move could reinvigorate display sales and give Corning geographical diversification beyond its core U.S. market to bolster its presence in Asia.

Canadian Pacific moved ahead by 9% thanks to its own earnings beat. The railroad company reported record net income for the third quarter, thanks largely to energy-related strength in freight volume combined with the success of the company's cost-cutting efforts. Low commodity prices in many markets will still put pressure on Canadian Pacific and its railroad peers to find innovative ways to increase freight volume, but these results show that at least in Canadian Pacific's case, the challenge is not insurmountable.

For Federal-Mogul, positive earnings results lifted the maker of auto parts by 24%. Particularly exciting for investors were signs that activity in the long-struggling European market appear to be picking up, suggesting that a huge headwind for its business could finally be ending. Strength in China was also an encouraging sign of worldwide growth not just for Federal-Mogul but for auto-related stocks throughout the industry.