Caterpillar's Surge Sparks Dow 15,000
May 3rd 2013 2:34PM
Updated May 3rd 2013 3:35PM
It took a lot longer than many pundits predicted, but we finally hit that ballyhooed mark: Dow 15,000. The blue-chip index briefly tipped over the 15,000-point mark during today's triple-digit surge. As of 2:15 p.m. EDT, the Dow Jones Industrial Average has pulled in gains of 150 points, or 1%, to sit just below its earlier highs. Stocks are on a roll today, and investors are patting themselves on the back -- particularly investors in Caterpillar , which has soared today. Here are the top stories you need to know on this record-setting day.
Good news across the board
The jobless rate fell to a four-year low last month, and optimism surrounding the U.S.'s slow but steady recovery sent the Dow rolling higher to start the day. The good news has extended beyond the 7.5% unemployment rate: The jobless decline came after the European Central Bank sparked investor confidence across the Atlantic by cutting its interest rate to a new low.
Caterpillar's stock has taken off as a result of investors in the economically reliant stock feeling better about the direction of the economy. Shares of the firm have jumped 3.8% today, and even though Caterpillar still ranks among the worst-performing members of the Dow this year, the company still sits atop its industry. In a cyclical sector like manufacturing, Caterpillar will be one of the best-positioned companies to capitalize on a future economic turnaround -- and investors buying in on the stock's dip will reap the rewards.
Caterpillar is hardly the only manufacturing stock having a good day, however. Alcoa ranks among the top Dow leaders with gains of 2.2%. The company announced today that it's considering cutting smelting capacity by as much as 11% in response to aluminum prices, which have been stuck in a rut for some time now. The move could allow Alcoa to cut costs and help drive up prices in the market by reducing production and supply, which would help in the near term -- although increased Chinese production, which some analysts expect to pick up by more than 10% this year, could hurt Alcoa's goals. The company's shift toward producing aluminum products for industries such as aerospace has also brightened the firm's future, even as its stock continues to struggle in 2013.
Another big player in the industrial sector, General Electric , has picked up gains of 1.6% after it received American antitrust approval for its purchase of Lufkin Industries, an oil field pump-producing company that GE announced it would acquire for nearly $3 billion in April. GE is looking to expand its presence in the American energy resurgence in places such as the Midwest, and Lufkin's purchase will give it a major inroad into the shale field boom.
Finally, Pfizer hasn't had such a good day, with shares falling 1.8% today to lead the few Dow laggards lower. The stock is still smarting from a disappointing earnings report that prompted management to lower earnings guidance. Despite that whiff, Pfizer is still well-positioned among the leading big pharma players. The company's robust pipeline should counteract the hit of patent-expiration-related sales declines in the future, and its spinoffs and sales of non-pharmaceutical businesses -- such as its multibillion-dollar sale of its infant-nutrition segment to Nestle last year -- have Pfizer focused on the high-margin drug industry. In the long term, this is still a strong health-care stock to follow, lowered expectations or not.
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The article Caterpillar's Surge Sparks Dow 15,000 originally appeared on Fool.com.Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool owns shares of General Electric Company. 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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