The stock market has bounced back sharply during February, overcoming January's uncertainties to lead the Dow Jones Industrials (DJINDICES:^DJI) to huge monthly gains. Even with the Dow down 22 points as of 11:10 a.m. EST, the index still on pace to finish more than 1,000 points higher than its Jan. 30 close of 17,165. Although all but two of the Dow's 30 stocks contributed to the month's gains, the top performances of Disney (NYSE:DIS), Cisco Systems (NASDAQ:CSCO), and JPMorgan Chase (NYSE:JPM) helped to lead the market higher in February.
Disney's 15% gains came largely from its fiscal first-quarter financial report early in the month, which featured blockbuster growth in revenue and earnings. The company benefited from its latest return to its animated roots: Frozen continued to drive Disney's results more than a year after its initial release. Even as the studio-entertainment division struggled to end a tough 2014 for Hollywood box-office results industrywide, Disney's other segments picked up the slack: Licensed product sales, media networks, and parks and resorts all posted substantial gains in sales. With a solid stable of franchise offerings that will last for decades to come, Disney stayed on course to keep giving shareholders the growth they've come to expect from the entertainment behemoth.
Meanwhile, Cisco climbed 13% as investors grew more optimistic about the networking giant's future prospects beyond its traditional core business. The tech company posted impressive results in its fiscal second quarter, finally generating considerable revenue growth that it was able to translate into higher-margin earnings. Cisco is expending much of its effort toward its Internet of Everything initiative, with the goal of building connectivity into a much wider range of products and equipment than currently exists. With successes in its smart-city business and rising demand for servers and related cloud-based hardware and services, Cisco looks like it's beginning to realize its full potential throughout the rapidly expanding technology industry.
Finally, JPMorgan Chase picked up 13% during February as the bank responded to new regulatory challenges and sought to take advantage of improving economic conditions. One primary concern investors had about JPMorgan was the potential need to raise capital in order to comply with new regulations on big banks. In response, however, JPMorgan has taken dramatic steps, including the new imposition of charges on its large institutional investors to keep deposits at the bank. Along with other moves, JPMorgan hopes to avoid having to boost its capital reserves, as keeping more capital free for profitable investment should benefit the bank. In addition, the prospect of rising interest rates could help to widen JPMorgan's net interest margins, and that would mark a welcome change from the narrow-rate-spread environment that banks have had to deal with for a while.
Investors shouldn't get used to 1,000-point gains for the Dow every month. But for those who took a big January hit, February provided welcome respite and reawakened optimism about the prospects of the 6-year-old bull market.