Despite a strong bounce-back in crude oil prices today, U.S. markets continued to struggle to find their footing after the opening bell. However, as the afternoon wore on, prices for both oil and stocks began to lift higher.
Oil prices surged, even after the Energy Information Administration cited an increase in U.S. inventories of 7.8 million barrels in the week that ended on Friday. That news wasn’t so great, but a weaker U.S. dollar was the catalyst for energy prices today.
Another dour note was the January ISM nonmanufacturing index, which showed a reading of 53.5, down from 55.8 in December. Economists were looking for 55.1. While any reading above 50 indicates expansion in the service sector, the drop indicates a slowing of expansion and is still concerning.
The Dow Jones Industrial Average rose 1.1%, but the S&P 500 was only up 0.5% and the Nasdaq fell 0.3%. Sectors were mostly positive, with energy and basic materials bouncing back from recent weakness to lead all sectors.
Earnings were once again key drivers of stock prices, with ADT Corp (NYSE:ADT) and Comcast Corporation ( NASDAQ:CMCSA) riding that wave. Those two, along with Alcoa Inc (NYSE:AA), are three of today’s best stocks. Here’s why:
Alcoa Inc (AA)
AA stock was soaring almost 9% today without any apparent news behind it. However, on Monday, the company announced it is appointing three new members to the Board of Directors in order to add experience and knowledge of the automotive and aerospace industries.
Although the company put its best face forward with this announcement, these were actually the three dissident directors that Paul Singer of Elliott Management Corp wanted on the board prior to its September 2016 spinoff into separate aerospace and auto parts manufacturing companies.
A $16 stock a year ago, Alcoa has lately been treading in the $7 range, and pressures are mounting on the company to do something to increase the value of AA stock.
ADT Corp (ADT)
First-quarter 2016 earnings of 49 cents a share — three cents above analysts expectations — propelled security system company ADT almost 8% higher today. However, revenue of $900 million was below the analysts’ estimates for $906.2 million.
But the company also discussed their newest product, ADT Canopy — which it recently introduced at the Consumer Electronics Show — which is putting monitoring services on home devices and wearable devices. Consumers on the go will be able to monitor their home security from their phones or devices such as the Samsung Gear S2 watch.
In recent months, ADT stock has been pummeled from $42 a share, to a recent low near $25. Morgan Stanley also helped out today by upping their rating on ADT stock from “underweight” to “equal-weight”.
Comcast Corporation (CMCSA)
Shares of CMCSA blasted 6% higher today after announcing fourth-quarter adjusted earnings of 81 cents a share, on revenue of $19.25 billion. The company was a penny below estimates on EPS, but well ahead of the street’s revenue expectations for $18.76 billion. Comcast also increased its customer base the most in eight years, with 89,000 new subscribers.
Also boosting CMCSA stock was the announcement that it is raising the annual dividend 10% to $1.10 per share, and the company will be buying back some $5 billion in shares this year and $10 billion overall going forward.
As of this writing, Ethan Roberts did not hold a position in any of the aforementioned securities.