It was a strange week on Wall Street. Stocks declined all week until a sharp jump on Friday because of a better-than-expected unemployment report. By the end of the week, the Dow Jones Industrial Average (^DJI 1.73%) had fallen just 0.41%.
The market hasn't responded to positive economic data over the past few weeks, in large part because investors think the Federal Reserve will start pulling monetary stimulus. Short-term, this fear can drive stocks lower, but investors should remember that long-term we want to see the economy strong enough to grow without assistance, and a healthy economy will drive stocks higher.
Intel (INTC 2.20%) led the Dow this week, gaining 4.1%. Most of the pop came of Friday, when analysts at Citigroup upgraded the stock. The hope is that PC demand remains flat in 2014, which could lead to higher-than-expected growth. A slower-than-expected slowdown in PC sales would help 2014 revenue, but investors should be more concerned about the adoption of Intel's new chips for tablets and smartphones. Long-term, that's what will drive growth, not the slowing PC market.
ExxonMobil (XOM +3.36%) was up 2.3% for the week as oil rose to $97.82. Investors are still following Warren Buffett into this oil giant, but the big topic this week was a potential carbon tax. ExxonMobil is making future plans based on the assumption there will be a $60 per metric ton carbon tax, or other regulatory scheme. Long-term, oil and natural gas will likely be hit with some sort of carbon regulation and that's not good for profit potential.
Disney (DIS 2.40%) rounds out the top three Dow stocks, gaining 1.3% this week. Management raised the stock's annual dividend 15% to $0.86 per share, giving the stock a 1.2% dividend yield. Disney also regained distribution and marketing rights for future Indiana Jones movies, which is an asset it owns because of the Lucasfilm acquisition. Disney has to buy back the right to make movies based on characters Marvel and Lucasfilm sold when they were separate companies. Long-term, having all of these films under Disney will add value, but it'll cost a fortune in the process.
