The Dow Jones Industrial Average is up as QE3 continues and we wait to see whether Cyprus’ parliament takes action to secure a bailout from the European Central Bank. As of 1:15 p.m. EDT the Dow is up 80 points, or 0.56%, to 14,507. The S&P 500 is up 0.65% to 1,556.
After the Fed announced earlier this week that it will continue asset purchases, it’s no surprise that the market is continuing its rise. It’s impossible to know what might stop this rally. No one would have guessed at the start of the month that the markets would be fearful of a banking crisis in Cyprus spreading to the rest of the EU. We will have to wait and see what happens in the small island nation. The European Central Bank has given the country until Monday to find a way to raise 6 billion euros and thus qualify for a 10 billion euro bailout from the ECB. In the next few hours, Cyprus’ parliament is expected to vote on a wide variety of measures to raisefunds after talks with Russia failed.
Today’s Dow leader
Today’s Dow leader is Hewlett-Packard Company (NYSE:HPQ), up 2.4%. Earlier this week Hewlett-Packard held its highly anticipated shareholder meeting, where three board members were on the hot seat after proxy firm Institutional Shareholder Services recommended that investors vote against them. The board members — chairman Ray Lane, audit committee head G. Kennedy Thompson, and finance and investments committee head John Hammergren — were all in charge during Hewlett-Packard’s acquisition of Autonomy for $10 billion in 2011. HP wrote down the acquisition by $8.8 billion last year and accused Autonomy’s former management of inflating sales. The board members squeaked by with narrow majority votes, with Ray Lane getting 58%, G. Kennedy Thompson getting 55%, and John Hammergren getting 54%. Typically, any votes with less than a 70% majority are looked upon unfavorably.
Hewlett-Packard Company (NYSE:HPQ) has been undergoing a turnaround under CEO Meg Whitman, and investors’ patience has been tested. The stock declined 47% last year, bringing its dividend yield high enough to make Hewlett-Packard a member of the 2013 Dogs of the Dow, the 10 highest-yielding Dow stocks. That patience was rewarded slightly yesterday when the company announced it would increase its dividend by 10% to $0.1452 per quarter for a forward yield of 2.5%.