After six days of losses, the Dow Jones Industrial Average rallied early as Washington prepared to vote on a debt ceiling deal, but it then fell by about 30 points to around 12,110, a drop of about 0.35%. Money that had been diverted to Treasuries and cash accounts now appears to be heading back to equities as traders are willing to take on more risk. Down about 3.2% for the last five trading days, the Dow Jones is up around 5.3% for the year.
Plowing ahead from the opening was Caterpillar (NYSE:CAT), up about $2.40, around a 2.4% gain, to over $102. Although Caterpillar reported disappointed earnings, analyst recommendations have the stock trading at $135 over the next year as global growth demands more goods and services from the largest heavy equipment maker in the world. Caterpillar is down more than 6% for the week and 4% for the month.
Also coming back from earnings that displeased Wall Street, Bank of America (NYSE:BAC) surged by more than 30 cents to over $10, more than a 2.5% spike into friendly territory. The worst-performing stock on the Dow this year, Bank of America is suffering from mortgage woes — stemming from its acquisition of Countrywide Credit in 2008 — that do not appear to be going away anytime soon. Bank of America is down for the week, month and year and is trading below its 20-, 50- and 200-day moving averages.
Chevron (NYSE:CVX) was gushing higher by about $2 and 2% to over $106 as it reported better profits that traders liked. Big Oil has been pumping away thanks to takeovers and spinoffs, but disappointing numbers from ExxonMobil last week hindered the sector. Open almost 50% for the year, Chevron is down more than 4.5% for the last week.
Despite better news from both ends of Pennsylvania Avenue, there is no good news of any meaning for the housing market, which had Home Depot (NYSE:HD) down more than 40 cents, a loss of over 1.17%, to beneath $34.53. Home Depot is down for the week, month and quarter and is trading beneath its 20-, 50- and 200-day moving averages.
After announcing layoffs of 13,000 workers, Merck (NYSE:MRK) shed more than 50 cents a share, about a 1.5% drop, to trade under $33.60. Merck is down for the week, month and quarter, along with selling below its 20-, 50- and 200-day moving averages. With a relative strength index rating of 29.55, Merck is beneath the 30 standard for when a stock is considered oversold.
Walt Disney (NYSE:DIS) was down about 60 cents to below $38, a drop of more than 1.5%. With a relative strength index rating of 36.85, Disney is trading below its 20-, 50- and 200-day moving averages. Disney is down almost 5% for the week.
Jonathan Yates does not own any of the stocks mentioned in this article.
