The Dow Jones Industrial was aiming for a strong finish to a choppy month, gaining 127 points, or about 1.1%, to above 11,687 on Wednesday. Traders liked the recently released minutes from the Aug. 9 meeting of the Federal Reserve Open Market Committee — interest rates will be kept low until mid-2013, and more Treasury bonds would be bought, if needed. The Dow is up more than 3% for the past five days and is in positive territory for 2011. Bullish sentiment is a very strong 60%.
Hopes for growth around the globe and reports of China stepping up purchases of raw materials had Alcoa (NYSE:AA) up about 50 cents, or 4%, to over $12.80. August has been volatile for Alcoa — the stock is down more than 16% for the month but up almost 6% for the week. As a result, Alcoa now has a beta of 2.09.
Caterpillar (NYSE:CAT) was plowing ahead by more than $3.50 per share, about a 4% spike to over $93.30. As China grows, Caterpillar prospers due to its strong commitment to projects in the country. Caterpillar is down more than 10% for August but up more than 8% for the week. Caterpillar now has a beta of 1.73.
Bouncing back was Bank of America (NYSE:BAC) with early gains of about 12 cents per share, or around 1.5%, to near $8.25. Bank of America continued its asset sales, announcing plans to sell its mortgage correspondent unit. For the week, Bank of America is up more than 30%. For the year, Bank of America is down almost 40%.
JPMorgan (NYSE:JPM) was higher by more than 70 cents, around a 2% rise, to about $37.80. The entire financial sector is strong in the morning session. JPMorgan is now up more than 6% for the week and 3% for the year.
Merck (NYSE:MRK) jumped more than 1.3% to over $33.10, a gaining of more than 40 cents per share. A judge narrowed the Fosamax lawsuit against Merck. There also have been a number of recent articles featuring the strength of Merck’s dividend, now at 4.65%.
The only Dow stock down in early action was IBM (NYSE:IBM), which yielded only 20 cents per share to around $172.30. Big Blue announced it was buying i2, an intelligence analytics firm, from Silver Lake. IBM is up almost 5% for the week and almost 20% for the year.
Jonathan Yates does not own stock in any of the companies mentioned in this article.
