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The Dow Jones Industrials (DJINDICES:^DJI) rose for the third straight month in November, as investors got increasingly comfortable with the improving economy and strengthening fundamentals among many of the most important companies in the average. In general, the market's rally has been broad-based, with an unusually high number of stocks participating in the upward move. But some stocks have pulled more of their weight than others, and JPMorgan Chase (NYSE:JPM), Merck (NYSE:MRK), UnitedHealth Group (NYSE:UNH), and Microsoft (NASDAQ:MSFT) have the most momentum going into the final month of 2013. Let's take a closer look at those four stocks to find out why they're leading the pack.
JPMorgan Chase soared 11% in November, after spending much of the past few months in a slump. Much of the enthusiasm about the company came after its landmark $13 billion settlement with the government to resolve claims related to the subprime mortgage scandal. But as much as investors have looked favorably on JPMorgan resolving some of its legal woes, the bank has also benefited from signs that the Fed's tapering down its bond-buying activity under quantitative easing could go more slowly than initially feared. That could help JPMorgan's bond portfolio hold more of its value by keeping long-term interest rates from rising as fast as they did during the late spring, helping the stock climb further.
Merck climbed 10.5% last month, breaking out of a downward move of its own recently. Investors got positive indications about the pharma giant's pipeline during November, as favorable results from its hepatitis-C drugs MK-5172 and MK-8742, along with a potential improvement on its Gardasil HPV vaccine in its experimental V503 vaccine, showed the power of Merck's stable of prospects in development. Getting past its patent cliff has been a tough road for Merck, but these results suggest a light at the end of the tunnel.
UnitedHealth Group posted a 9.1% gain in November, getting back toward all-time record highs as investors haven't been dissuaded by the rocky start to Obamacare's open enrollment period. UnitedHealth took a somewhat conservative approach to the health-insurance exchanges, participating in some states' offerings but holding back from committing to the concept entirely. Given the difficulties that Obamacare has had in gaining traction, that strategy looks like it was a good move. Even with membership growth that slowed in the third quarter, investors appear optimistic that the slowdown will prove short-lived.
Microsoft finished last month with an 8.5% rise, adding to its upward momentum from October and its better than 6% rise that month. Perhaps the most encouraging news recently from the tech giant is that Microsoft's initiative to bolster its presence in the smartphone market seems to be bearing fruit. Thanks to its partnership with Nokia, the Microsoft Phone platform grew at nearly quadruple the rate of the overall smartphone market. Now with Microsoft having taken over Nokia's mobile-device business, the company has an even greater opportunity to tap into the worldwide demand for smartphones and tablets, which shows no signs of slowing.
Just because these four stocks have done well lately doesn't mean they'll continue to rise. But many of the factors that have helped these companies are still present, and so they could help the Dow climb to even bigger gains in December and throughout 2014.
Fool contributor Dan Caplinger owns warrants on JPMorgan Chase. The Motley Fool recommends UnitedHealth Group and owns shares of JPMorgan Chase and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.