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The Dow Rides 3M, Disney's Jump Higher

By Dan Carroll – Feb 27, 2014 at 2:30PM

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Mylan roars outside of the Dow, gaining 10% after reporting fourth-quarter earnings success.

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.

This week's market boom has made investors feel a little bit better about stocks' slow start to 2014. The Dow Jones Industrial Average (^DJI) is rising again, up more than 46 points as of 2:30 p.m. EST, with all but a few of the Dow's blue-chippers moving higher. 3M (MMM -0.04%) is among the Dow's big winners today, gaining 1% after investors digested the latest rumors swirling about the conglomerate, while outside the Dow, generic drug-maker Mylan (MYL) has boomed nearly 10%. Let's catch up on what you need to know.

3M looks for a shake-up
3M stock has gained more than 28% in the past year, and shares are on the move again today after reports emerged that the company is considering offloading its electronics business. Bloomberg first reported that 3M is seeking buyers for the division, projecting that the business could garner up to roughly $1 billion.

The electronics segment posts around $1 billion in annual sales, according to Bloomberg's sources, but has underperformed lately -- as has 3M's entire energy and electronics division, which has seen sales slide in each of the past two years. The business group has also seen operating income nose down each of those two years; as 3M's third-largest operating segment, the decline has weighed down the results of a company that has done a good job keeping up modest revenue growth in its other major segments. By comparison, 3M's industrial division, its largest division and nearly twice the size of its next-largest business by sales, has managed to post revenue growth in each of the last two years. Selling off the electronics unit, even if 3M keeps the majority of its overall energy and electronics segment, would allow the company to focus more on growing businesses.

Around the Dow, shares of entertainment giant Disney (DIS -3.79%)has gained about 0.5% so far today. The gain comes after Disney announced a price hike at its Florida theme parks, boosting its single-day pass prices to the Magic Kingdom by $4 to $99. For investors pleased by the stock's great results lately, it's one more addition to Disney's arsenal: Theme parks have performed extremely well as of late, with operating profit growth of more than 16% year over year in its latest quarter on revenue growth of 6%. Disney's lucrative media networks division remains the biggest driver for this company's success, but theme parks -- its second-largest business by sales -- have been a huge boost to the company's soaring results over the past few years.

Finally, Mylan's crushing the markets outside of the Dow today with its big jump after the generics company released its fourth-quarter earnings. The company's net profit surged by more than 11%, with revenue gaining 5% despite a 2% negative currency impact. Investors have even more to cheer about: Mylan expects revenue growth in 2014 above analyst estimates, and with the company's leadership open to new acquisitions in order to expand growth routes, Mylan is on the cusp of what could be a huge year.

Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends 3M and Walt Disney. The Motley Fool owns shares of Walt Disney. We Fools may not 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.

Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$33,947.10 (%)
Walt Disney Stock Quote
Walt Disney
$92.29 (-3.79%) $-3.64
3m Stock Quote
$124.58 (-0.04%) $0.05
Mylan Stock Quote

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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