The Dow Approach
The Dow Approach
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FOOL GLOBAL WIRE LEXINGTON, KY. (January 30) -- As of today's close, we have a virtual tie between DUPONT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DD)") else Response.Write("(NYSE: DD)") end if %> and CATERPILLAR <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CAT)") else Response.Write("(NYSE: CAT)") end if %> for the tenth spot on our high-yield list. DuPont's yield is 2.073% and Caterpillar's is 2.071%. Depending on how you decide to round off the yield, that will determine which stock makes it into the list. Taking the yield out as far as one can go, DuPont's yield is slightly higher. But if you round off the yields each to 2.07%, one would include Caterpillar by virtue of its lower share price. So be aware that the argument exists to include Caterpillar over DuPont among the top ten, which would also push Caterpillar into the top group of Beating the Dow stocks as well. So choose your method and take your pick. Tomorrow all bets are off since a small move in either stock can change their relative positions again. On to more general news... The market reacted favorably to another of those economic indicators I referred to in last night's report. Today it was the weekly jobless claims. Analysts were expecting a drop in first-time claims, which can suggest that the economy is perking up and raises the fears that interest rates might need to be raised to rein in the galloping steed. But in fact, this morning, jobless claims increased, relieving some speculations that the Fed will feel compelled to tighten monetary policy at its meeting next week. The other event du jour was Fed Chairman Alan Greenspan's testimony before members of Congress. While Greenspan reiterated the claim that the Consumer Price Index over-states the actual inflation rate, he didn't give any hints about his inclination about interest rate movements. So, overall, the short-term players liked what they saw and heard today. It was pretty much a non-event for our Dow holdings. AT&T <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: T)") else Response.Write("(NYSE: T)") end if %>, which has been in the hole right from the start this year, recovered one percent, and 3M <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MMM)") else Response.Write("(NYSE: MMM)") end if %> bounced late in the day, but neither CHEVRON <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CHV)") else Response.Write("(NYSE: CHV)") end if %> nor GENERAL MOTORS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GM)") else Response.Write("(NYSE: GM)") end if %> was able to keep pace with the Dow. Still, the overall index was up roughly one percent on the day, a pace we know it could never sustain. A daily 1% gain over the course of a full year (some 250 trading sessions) would be an annualized rate of more than 1,100%. A figure we can fantasize about, of course, right up there with blasting the winning home run in the last game of the World Series or holing out from the 18th fairway to win the U.S. Open by a shot. But I don't imagine anyone reading these words really expects to accomplish those things. (Tiger? You out there?) So, like all other days, chalk it up as one day. Big deal. Smile or frown as your returns dictate, then go live life. That's really what all this Foolishness is about anyway, isn't it? I hope so, or I read the wrong job description. |
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