1 Big Winner in the Dow Today
Oct 9th 2013 3:14PM
Updated Oct 9th 2013 3:16PM
The Dow Jones Industrial Average managed to climb back into positive territory, trading up 0.52% as of 2:45 p.m. EDT. Markets initially favored reports that Obama intends to nominate current Federal Reserve Vice Chairwoman Janet Yellen to succeed Chairman Ben Bernanke. Yellen is predicted to make few changes to the current Fed policy, especially after the International Monetary Fund warned that tapering the bond-purchasing program too quickly could have major consequences in the global bond markets. With all gloomy headlines out of the way, quarterly earnings have started, and there are some big movers in the market today.
AT&T is doing its part to keep the Dow in positive territory, trading 2.69% higher this afternoon. General Electric announced a partnership with AT&T and Cisco to expand its "industrial Internet," Reuters reports. The service will essentially analyze large amounts of data that would normally be difficult to process. It will allow GE's machinery to connect to each other wirelessly through the network and cloud from anywhere, and will help minimize downtime, lower fuel costs, and increase productivity.
Recently replaced Dow component Alcoa is trading 3.4% higher after the company surprised analysts by posting a third-quarter net income of $24 million compared to a loss of $143 million last year. There's no doubt the short-term outlook for Alcoa remains challenging, but this quarter may give investors reason to think the company can stay profitable with its engineered products and solutions segment, even if aluminum prices remain low. As aluminum prices gradually increase, it should bring stronger profits from Alcoa.
"You see the increased importance of the downstream business and the continued growth and profitability," CEO Klaus Kleinfeld told Bloomberg in a phone interview. "The share price is undervalued and has not built in the repositioning that we are undergoing but I believe it will get there."
Outside the Dow, Yum! Brands plunged nearly 8% after its third quarter disappointed, and net income plunged 68% from the previous year to $152 million -- drastically lower than expectations. "Despite the disappointing third-quarter performance, I remain as confident as ever in our ability to deliver strong, sustainable growth in the years to come," said Yum! Brands CEO David Novak, according to CNNMoney. Despite ongoing weakness in China, the company has opened more than 450 new restaurants in the country and still plans to open 1,850 new restaurants internationally. The company reiterated its goal to grow earnings per share by 20% next year, but it will need a stronger performance in China to meet this goal.
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The article 1 Big Winner in the Dow Today originally appeared on Fool.com.Fool contributor Daniel Miller 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.