It was another solid week on Wall Street, as stock indices bumped up against record highs once again. If you were looking for a big improvement in economic data, the week may have been a disappointment, but there was further data showing a slow and steady recovery. The Dow Jones Industrial Average (^DJI +0.75%) didn't hit a record high this week, but it did move up 0.93% as 20 of 30 components moved higher this week.
On the economic front, Friday's jobs report from the Department of Labor showed that 288,000 jobs were added to the economy last month and the unemployment rate fell to 6.3%. There can be arguments made that any given monthly unemployment rate is skewed, but the general trend of more jobs and fewer unemployed workers continued. The Federal Reserve was even positive enough about the economy to cut its bond-buying program by $10 billion to $45 billion per month.
The week's leading stocks
There were a few big movers on the Dow this week, and AT&T (T 0.36%) led the way, climbing 3.3%. Rumors swirled that the wireless giant is interested in buying DirecTV, which would add another 20 million customers to its subscriber list. AT&T has explored a number of deals this year, but this one would bring a complimentary business and technology to the company. I like the idea for AT&T and think it would be good strategically to expand content delivery systems further. It'll take time to see if a deal is worked out and if it could pass regulatory muster, so look for this to be a news item for some time.
Travelers (TRV +1.11%) was the second best stock on the Dow this week, rising 3%. The stock's strong run after earnings continues, as the company's strategy execution continues to be strong. Net income was up 17% last quarter to 17%, and premiums written rose 5% despite higher pricing. A higher-interest-rate environment should also help investment returns, which are the bread and butter for insurance companies. This is a well run company, and in a market of high-priced, stocks that's what investors are looking for now.
Rounding out the top three is Visa (V +0.69%), which was up 2.8% for the week. This was a reversal of last week, when Visa was one of the Dow's laggards after weaker-than-expected earnings. Expectations are high for Visa, and even an estimated growth rate of 10%-11% wasn't enough to impress investors last week. But keep in mind that this is a steady business with extremely high margins and a large competitive moat. Those kind of businesses are rare, and long-term that gives Visa a lot of earnings power and growth potential. The stock may be volatile, but in the long term, this is one that I think is a cornerstone of any portfolio.
