Hewlett-Packard Company (HPQ), Travelers Companies Inc (TRV), Caterpillar Inc. (CAT), Alcoa Inc (AA): 5 Keys to the Dow’s Record Quarter

The Dow Jones Industrials finished off the first quarter in record fashion on Thursday, closing at another all-time high. With greedy investors coming off the sidelines and cautious investors wondering if the good times are about to end, no one’s sure what’s coming next.

To get some insight on that question, here are five keys to understanding the Dow’s record-setting quarter.

1. The Dow’s gains were historically strong.
The stock market’s rise on Thursday capped a run that has pushed the average up by 1,475 points so far this year. That translates to an 11% gain, which gave the Dow its biggest increase for a first quarter in 15 years. In raw point terms, it was the biggest quarterly gain ever for the average, although there have been other quarters in which the percentage change was greater.

Hewlett-Packard Company (HPQ)

2. The Dow’s best performers were turnaround-driven.
Topping the list of Dow winners for the quarter was Hewlett-Packard Company (NYSE:HPQ), which soared 68%. After a horrendous 2012 in which the stock lost 43% of its value, Hewlett-Packard Company (NYSE:HPQ) has finally come up with a turnaround strategy that investors seem to believe in. Weakness in the PC industry will continue to weigh on Hewlett-Packard Company (NYSE:HPQ) for a long time even if the company does manage to make a successful transition to other more lucrative lines of business, such as cloud-computing solutions and broader-based IT consulting. Nevertheless, HP achieved an essential milestone by getting rid of investors’ pessimism.

Meanwhile, Travelers Companies Inc (NYSE:TRV) gained a less impressive but still substantial 18%. Even in the wake of huge losses from Hurricane Sandy, Travelers Companies Inc (NYSE:TRV) has been able to increase premiums, putting itself in a position to boost long-term profits.

3. The Dow’s worst performers point to a global slowdown.
Even in a record-breaking quarter, a couple of laggards didn’t manage to post gains. Caterpillar Inc. (NYSE:CAT) and Alcoa Inc (NYSE:AA) were the Dow’s only losers this quarter, and although their declines were relatively minor at just 2% and 3% respectively, their experience points to a general concern affecting the entire global economy.

For years, rising stock markets in emerging markets have hinged on the growth in overall economic activity, and with their pure-industrial roots, both Caterpillar and Alcoa have relied on good global economic health to support their businesses. As well as things are looking in the U.S. right now, the poor performance of these two stocks remind us that around the world, things are looking a lot different, and future crises could be right around the corner from unexpected locations across the globe.