Wall Street’s bounce back from last week continues today, with the Dow Jones Industrial Average (Dow Jones Indices:.DJI) looking to continue its recent run of triple-digit moves. The blue-chip index is up 110 points as of 2:25 p.m. EDT after earlier soaring more than 150 points, pushing back above the 15,000 mark. Most Dow stocks are in the green today after positive consumer and housing data lifted investor optimism. How is this affecting your portfolio? Let’s check out the stories you need to know about today.
More signs of the economy’s rise
The National Association of Realtors kicked things off today by reporting that pending home sales jumped to a six-year high in May. Housing’s rebound has accelerated the economy’s rise, and signs are still pointing up. Separately, the Department of Commerce reported today that consumer spending rose 0.3% in May after contracting in April — a positive sign, considering that income rose by an even better 0.5% in May. While the U.S. economy has grown more slowly than expected — first-quarter GDP was revised down to 1.8% from an earlier estimate of 2.4% — consumers are returning to the markets, and that’s pivotal if the U.S. is to continue recovering from the recession.
Among individual stocks, American Express Company (NYSE:AXP) has risen 1.6% to rank among the Dow’s leaders. More than 50% of the firm’s revenue comes from the U.S., and an improving economy and growing consumer spending will mean big things for the company’s top line in the future.
Although American Express Company (NYSE:AXP) has historically appealed to more affluent consumers — a group that can weather downturns like the recession with less difficulty — the economy’s comeback and the market’s gains over the past few years have nonetheless helped this firm greatly.
Credit: American Express Company (NYSE:AXP)
Big pharma Pfizer Inc. (NYSE:PFE) is also on the upswing today, rising 1.4%. The company finally resolved asbestos-related claims against Quigley, a company it has owned since the 1960s, when a federal judge signed off on a plan that will have Pfizer paying $964 million to settle the claims. It’s a pricey sum for Pfizer Inc. (NYSE:PFE), but the resolution will allow the company to move on — and it’s not as if Pfizer doesn’t have a strong financial base. While the company has been hit by losses relating to patent expirations, like most Big Pharma firms, Pfizer Inc. (NYSE:PFE)’s strong and diverse pipeline will boost the company’s sales for years to come. A $964 million settlement won’t sting for long.