Dow Rises Despite Europe's Woes


Dow Rises Despite Europe's WoesLast Friday, it looked like this week would be an ugly one. Standard & Poor's had just downgraded the credit ratings of France and a number of other European countries, an act that many saw as simply the latest domino to fall in Europe's slow-motion economic train wreck.

But at least in the U.S., the stock market shrugged off that news. After rising as much as 150 points earlier in the session, the Dow Jones Industrials (^DJI) was still up 59 points to 12,481. The Nasdaq Composite (^IXIC) jumped about 17 points to 2,728, while the S&P 500 (^GSPC) rose a more modest 4 points to 1,293.

About three stocks in the Dow rose for every loser, with United Technologies (UTX) and Merck (MRK) among the biggest gainers in the average. Positive economic news from China suggested that the emerging nation might be able to sustain its growth longer than many had expected, helping prospects for United Technologies and other industrial manufacturing stocks within the Dow. Meanwhile, Merck continued its strong run over the past several months, with the shares jumping almost 30% since the beginning of August as investors apparently got more comfortable with the looming patent cliffs that most big drug companies face.

On the other hand, bank stocks got hurt badly. JPMorgan Chase (JPM) fell sharply on the heels of Citigroup's (C) earnings report this morning, in which Citi reported a big drop in profits from levels a year ago.

Despite the fact that the eurozone is still holding itself together for now, continuing stresses weigh not only on the European financial system but on banks around the world as well. Any resolution to sovereign debt problems on the Continent could create a big rally for bank stocks both in the U.S. and elsewhere.

Motley Fool contributor Dan Caplinger doesn't own shares of the companies mentioned in this article. You can follow him on Twitter here. The Motley Fool owns shares of Citigroup and JPMorgan Chase.

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Fed res dollar printing has increased to keep up with US treasury's need for them as debt buyer of last resort. Euro is doing same for their debt but doesn't hold the luxury as world's res currency. Fed exports inflation to the world, Euro can't & WILL hyper inflate to ZERO. Europe WILL run to the dollar as others trade for gld/slvr. Even with a small demand increase gld/slvr price WILL rise outside the fed's ability to keep suppressed & dollar WILL start its final fall, world WILL panic & gld/slvr will BE the only reserve currency, again. World fiat system is collapsing & we face deep depression. Got Gold? China & India does, why's that you figure? Got gold?

January 19 2012 at 8:28 PM Report abuse rate up rate down Reply

my classmate's aunt makes $82 every hour on the computer. She has been fired for 7 months but last month her pay was $7730 just working on the computer for a few hours. Here's the site to read more...

January 18 2012 at 4:16 PM Report abuse rate up rate down Reply
1 reply to Jennifer's comment

you told us it was $75/hr earlier ... will it be $90/hr next?

typical BOT!

January 18 2012 at 6:28 PM Report abuse rate up rate down Reply

all indexes rise on low vol due to high frequency levitation of the large institutions. they have to put the free money somewhere.

January 18 2012 at 6:19 AM Report abuse rate up rate down Reply

S&P and Credit Rating Companies are a scam to increase interest rates so banks can 'legaly' exploit their customers. They need to be shut down and the CEOs and managers arrested for fraud.

January 17 2012 at 11:35 PM Report abuse rate up rate down Reply
Michael Sanders

Sweden still looks very good! I won't pick it for you, but let's just say that worldwide auto safety parts suppliers are heading for a huge upswing. Don't get involved with the automakers, just key suppliers. No matter who's building, the suppliers are going to do very well. Safety components are becoming a larger part of what buyers look for, thus a higher percentage of vehicle content. Whether you burn gas, natural gas, electric or hydrogen, you'll still want to be safe.

January 17 2012 at 9:50 PM Report abuse rate up rate down Reply