The Dow Lets the Dogs Out
Feb 1st 2013 9:30PM
Updated Feb 2nd 2013 1:10PM
As you probably heard by now, the Dow Jones Industrial Average hit a milestone, crossing the 14,000 line for the first time since 2007. The blue chips charged up a full 149 points, or 1.1%, to finish at 14,010, propelled by a strong jobs report and other indications that the economy continues to recover.
The Labor Department reported that 157,000 jobs were added in January, 166,000 of which were in the private sector. The overall figure was below expectations of 180,000, but the agency also said the economy added 127,000 more jobs in November and December than previously thought. Those revisions largely drove today's gains. The unemployment rate, meanwhile, ticked up to 7.9% as long-term unemployment continues to be a problem. The Institute of Supply Management's manufacturing index also jumped to 53.1, topping estimates of 50.5, indicating a strong uptick in factory activity.
Bank of America led all Dow components, with a gain of 3.5%, no big surprise because the financial titan is highly sensitive to the macroeconomic environment, and will benefit from improvements in housing and employment.
Drugmaker Merck found itself at the opposite end of the spectrum, falling 3.3%, after reporting earnings this morning. Profits fell 7%, but adjusted earnings per share of $0.83 still beat the Street's view at $0.81. Revenues also fell 5%, hurt by the asthma drug Singulair coming off patent, but still beat expectations. Investors seemed to punish the drugmaker for announcing that it would delay seeking approval for its highly-anticipated osteoporosis drug odanacatib, which will not happen until 2014. As a result, its 2013 EPS forecast of $3.60 to $3.70 was slightly below the consensus.
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Chevron also reported its quarter this morning, gaining modestly at 1.1% on the day. Revenue was up 1%, to $60.6 billion, while adjusted profits, which excludes a $1.4 billion gain from an exchange of Australian natural gas fields, were up 14% from a year ago. Production was also up significantly from the third quarter.
Rival ExxonMobil was essentially flat after its earnings report came out today, gaining 0.1% on the day. Profits rose 6%, thanks to higher profit margins, as revenue fell 5%. Exxon's refining business was particularly strong, as profits from production narrowed. Earnings per share of $2.20 easily cleared estimates of $1.97, while revenue was essentially in line.
The article The Dow Lets the Dogs Out originally appeared on Fool.com.Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends Chevron. The Motley Fool owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. 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.
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