Facing its worst week in a year, the Dow Jones Industrial Average rose in the morning session, bolstered by strong earnings from Google (NASDAQ: GOOG) and Citi (NYSE: C), to rise about 15.40 points to over 12542, a gain of more than 15%.
Cisco was leading the Dow, up almost 0.80%, raising its share prices to around $15.55, about 12 cents higher. Earlier in the week, Cisco announced plans to save $1 billion annually by laying off up to 10,000 employees. This and the big Google (NASDAQ: GOOG) earning surprise has Cisco (NASDAQ:CSCO) up 2.73% for the month and trading above its 20 day moving average.
Big oil was also fueling the early ascent of the Dow, with Chevron (NYSE: CVX) closing in on $105.40, up more than 70 cents early on, almost a 0.70% rise. Energy stocks are doing well as Conoco Phillips (NYSE:COP) is splitting into “upstream” and “downstream” operations which will enhance shareholder value. Bullish reports on oil demand and higher prices from the International Energy Agency and Barron’s also have prices trending upward. The relative strength index for Chevron is now over 60, with 70 the benchmark for a stock to be viewed as oversold.
Exxon Mobil Coporation (NYSE: XOM) also pumped the Dow higher early on with a 40 cent jump, almost 0.50%, trading over $82.65. The realtive strength index of Exxon Mobil is near 60. It is trading above its 20, 50 and 200 day moving averages.
Down by more than 1.06% was Merck (NYSE: MRK), losing almost 40 cents to fall to near $35.90 in early action. An article on Forbes.com painted a bleak landscape for Merck and other Big Pharma stocks (Pfizer (NYSE: PFE) was also down). Merck is trading above its 20, 50 and 200 day moving averages.
After rising strongly yesterday on better earnings than expected and even with Citi (NYSE: C) reporting good numbers today, JP Morgan (NYSE: JPM)was down almost 1.0%, about 40 cents, to under $40 a share. The University of Michigan Consumer Sentiment Index was reported at its lowest level since March 2009. JP Morgan is trading below its 20, 50 and 200 day moving averages. The financial sector is the worst performing segment in the Dow for this year.
General Electric (NYSE: GE) was also down more than 0.90%, off by about 17 cents to under $18.40 a share. With a beta of 1.67, GE is almost twice as volatile as the market as a whole. It has a relative strength index of 43, close to the 30 floor for a stock being oversold. General Electric is trading below its 20, 50 and 200 day moving averages.
Jonathan Yates does not own any of the stocks mentioned in the article.
