Dow Watch: Another Happy Ending

(At 4:20 p.m. EDT)

Not a bad finish at all.

The Dow managed to the end the day right near the highs of the session. As I mentioned yesterday, the blue-chip average is still stuck in a range and is still lower for the month. But the fact that the Dow finished at its session highs is a very good sign for bulls.

It's also impressive to see the Dow gain ground, even if it was only 27 points, considering how weak economic data was Tuesday and the dismal performance of financial stocks. Bank stocks contributed mightily to Monday's 185-point rally, and naturally many retraced some of those gains today.

Instead, strength came Tuesday from a variety of names, from General Electric (GE Quote) to Merck (MRK Quote), from Home Depot (HD Quote) to Intel (INTC Quote). Each stock finished higher by 1% or more.

Speaking of Intel, the chipmaker posted second-quarter earnings after Tuesday's close, and that will probably help tech stocks during Wednesday's session. Intel reported quarterly earnings of 18 cents a share, more than doubling the average analyst forecast for earnings of 8 cents a share, according to Thomson Reuters. Revenue of $8 billion and gross margin of 51% were also better than many expected.

Like Alcoa (AA Quote) last week and Johnson & Johnson (JNJ Quote) today, Intel's revenue numbers were down year-over-year, but still exceeded estimates for the current quarter. Perhaps a trend is developing.

(At 11:50 a.m. EDT)

The Dow Jones Industrial Average is up, albeit not much, after Goldman Sachs (GS Quote) simply blew away Wall Street's forecast with its second-quarter results. But while Goldman shares were trading higher, the financial stocks on the Dow were tempering gains.

On Monday, Meredith Whitney's buy call on Goldman boosted the financial sector and helped pushed the Dow higher by 185 points. And even though Goldman was up another 0.6% Tuesday, The Traveler's Companies (TRV Quote) slipped 1.9%, Bank of America (BAC Quote) was losing 0.3%, and American Express (AXP Quote) fell 0.1%.

I still can't wrap my head around the price moves, but that's been the M.O. of the market over the last year. Common sense would say that Goldman's stellar report is a good sign for the financial sector as a whole, but that simply isn't the case anymore. What Goldman achieved was great, but it can't be transposed to the performance of BofA or JPMorgan Chase (JPM Quote) or Citigroup (C Quote) in the quarter. Instead, we'll have to wait until later this week to see if these other big banks can outperform as well.

On the positive side, Johnson & Johnson (JNJ Quote) was helping to counterbalance financial losses as shares rose following the company's own earnings report. Profit may have slipped from a year ago because of slower sales, but J&J still earned $3.21 billion, or $1.15 a share, in the quarter on sales of $15.24 billion.

Revenue was down 7.4% from a year ago, but J&J still beat the Thomson Reuters average estimate for earnings of $1.11 a share on revenue of $15.02 billion. J&J shares were lately up 0.7% to $58.13.