Dow Watch: Don't Get Excited Yet

(At 4:36 p.m. EDT)

And there you have it, folks. The Dow Jones Industrial Average closed at the highest level of 2009. Since the last closing high, which came on the first trading day of the year, we've seen a new president inaugurated, we had another bad scare for equities followed by a sharp rebound, and approximately 4,824 celebrities have died. Maybe I'm exaggerating on that last item.

Don't get too excited about the finish, though. Shares of Microsoft ( MSFT) and American Express ( AXP) were under pressure in the after-hours session, falling 8.1% and 4.9%, respectively.

Both companies issued disappointing earnings results after Thursday's closing bell, and without any reports from Dow members scheduled for Friday, the Dow will likely get its direction from those two names.

There's not much else to add today that hasn't already been said, so instead I'll offer some statistics for the Dow after today's strong performance, courtesy of the Dow Jones Indexes.
  • The Dow has its highest close since Nov. 5.
  • The last time the Dow rose 12 days during the first 16 days of a month was in April 2007.
  • 3M (MMM) was the largest contributor to the advance, accounting for 35.97 points. McDonald's (MCD) was the biggest laggard, with a -20.63 point contribution.
  • While the Dow crossed the unchanged mark 52 times during Wednesday's trading session, the index crossed zero 10 times during today's trading session, spending 99% of the day in positive territory.
  • The Dow is now up 38.52% from its 12-year closing low of 6547.05, which it hit March 9.
  • Year to date, the Dow is now up 3.34%.

(At 3:43 p.m. EDT)

Perhaps Art Cashin, head of floor operations at UBS, should dust off his Dow 10000 hat.

The Dow Jones Industrial Average has continued to climb through Thursday's session and now sits at 9077, just off its highest point of the day. If the index can hold these levels, it will establish a new closing high for 2009, surpassing the Jan. 2 of 9034.69.

Not much has changed from this morning. Only three Dow components are in negative territory, including McDonald's ( MCD), which lately was down 5% to $55.90. Boeing ( BA) and Wal-Mart ( WMT) were the only other components in the red.

The difference from this morning is that financial stocks have pushed higher, all while the winners of the day keep building on early gains. Alcoa ( AA), Bank of America ( BAC), Caterpillar ( CAT), 3M ( MMM) and Verizon ( VZ) were all higher by 4% or more.

Speedway

Microsoft ( MSFT) and American Express ( AXP) are the next Dow components on tap to report quarterly results after the close of trading. We'll see if the momentum will carry until the close and into Friday's session.

(At 11 a.m. EDT)

The Dow just broke through the 9000 level, surging 152 points to 9033 as 27 of its 30 components were posting gains. The blue-chip average is now sitting right at its 2009 closing high of 9034.69, set on the first trading day of the year.

Again, AT&T ( T) was among the top performers thanks to its strong earnings report, with shares jumping 3.2% to $25.63. 3M ( MMM) was also a leading performing following its own earnings release, climbing 5.7% to $68.37.

Strength was coming from several other stocks, with Alcoa ( AA), DuPont ( DD), Caterpillar ( CAT), Merck ( MRK), and Disney ( DIS) shares rising 3% or more.

Earnings weren't the only catalyst for the Dow's surge. June existing home sales rose 3.6% to 4.89 million, above the consensus 4.84 million. Existing home sales are now at their highest level since October. Additionally, weekly initial jobless claims came in below expectations, although a jump of 30,000 from the previous week isn't anything to be terribly excited about.

Again, McDonald's ( MCD) was the biggest drag on the Dow, falling 4.3% after its earnings report. Boeing ( BA) and Wal-Mart ( WMT) were the only other components in the red.

(At 9:38 a.m. EDT)

First the Dow Jones Industrial Average's seven-session winning streak was snapped, and now the first of its 30 components failed to beat Wall Street's earnings targets for the second quarter.

Dow component earnings were once again in focus, with positive effects from AT&T ( T) and 3M ( MMM) earnings counterbalanced by disappointing results from McDonald's ( MCD).

AT&T reported second-quarter earnings of 54 cents a share, 3 cents better than the average analyst forecast. Revenue was nearly unchanged from a year ago at $30.7 billion, in line with estimates. AT&T said that total wireless subscribers increased by 1.4 million in the quarter, adding that it had more than 2.4 million activations of Apple's ( AAPL) popular iPhone.

AT&T shares were lately up 1.6% to $25.24. Its main rival Verizon ( VZ) was also trading higher, as analysts expect similarly strong earnings from the telecom giant.

3M, meanwhile, recorded a second-quarter profit of $1.20 a share, well ahead of the Thomson Reuters average estimate of 94 cents a share. Revenue did fall 15% from a year ago to $5.72, but that came in above Wall Street's forecast of $5.41 billion.

3M also raised the lower end of its guidance range from $3.90 a share to $4.10. The full range is $4.10 to $4.30 a share, above the consensus of $3.97 a share. 3M shares were climbing 3.4% to $66.84.

On the downside, McDonald's said it had second-quarter earnings of 98 cents a share, but excluding divestiture gains related primarily to the sale of Redbox Automated Retail, the per-share results would have been 97 cents. That makes McDonald's the only Dow component thus to fail to beat earnings expectations for the second quarter. Analysts were looking for a profit of 97 cents a share, according to Thomson Reuters.

Additionally, McDonald's said revenue in the quarter dropped 7% from a year ago to $5.65 billion, coming in below the $5.72 billion consensus. McDonald's shares dropped 3.7% at the open, making it the biggest laggard on the Dow.

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