Markets continue their week-long descent a day after the release of minutes from the Federal Reserve's latest meeting. Despite a more bearish stance, especially over unemployment, Ben Bernanke and Co. will not engage in any further stimulus for the time being.
That said, let's see how the three major indexes are faring and take a closer look at why the Dow is winning.
Source: Yahoo! Finance as of 2:20 p.m.
The Nasdaq continues to show more weakness than the Dow and S&P 500, but that isn't surprising given the tech sector's 6% plunge this week amid earnings warnings and poor PC sales. The Dow's outperformance comes from a full third of its components showing gains for the day, with two stocks both soaring over 4%.
Procter & Gamble (NYSE: PG ) jumped 4.2% on news that activist investor William Ackman has taken a significant position in the consumer goods titan. P&G has struggled with high costs and a lack of innovation in recent years, cutting guidance in May and again in June. While a turnaround plan is in place, it will be a year before investors see any tangible results. Given these circumstances, it's little wonder that investors are thrilled at the prospect of Ackman shaking up the board and speeding the turnaround along.
Merck (NYSE: MRK ) is up 4.5%, hitting four-year highs after stopping a trial early for its experimental weekly osteoarthritis drug ordanacatib, because the drug was clearly working. Generally a single successful trial won't move the needle much for any of the big pharma stocks, but osteoporosis is a big market, and Merck desperately needs new blockbusters to replace Singulair's recent patent loss. One Citigroup analyst thinks the stock is headed to $50 over the next year, but even if it doesn't climb 15% from today's price, investors will still enjoy Merck's 4.1% yield while waiting for the FDA to approve the drug next year.
Speaking of dividends, the Dow is loaded with companies with solid dividend payouts and highly sustainable business models built for the long haul. The companies highlighted in The Motley Fool's new special free report, "The 3 Dow Stocks Dividend Investors Need," all have an X factor that makes them stand out from their illustrious Dow peers. Download it now, for free.
Election Shocker: Guess who's got an 86% chance of winning this November...
It's not Romney. Or Obama. It's not Democrats, Republicans, or the Tea Party. In fact, it's not politicians at all. It's individual investors like you.
Since 1952, the S&P 500 has posted a gain in the last seven months of an election year 85.7% of the time. But if you want to set yourself up for maximum profits and minimum risk after the election, you need to have the proper investment strategy in place well before November.
That's why we've asked our top advisors and equity analysts to weigh in on which investments will win if Romney does... which will win if Obama does... and what you can do to help boost your wealth no matter who wins in November.
It's all part of our brand-new investor empowerment series, "Invest Like a Pro: Savvy Strategies for the Next 4 Years and Beyond" ? which we're making available to individual investors like you absolutely free for a limited time.
To get access to this exclusive bundle of informative videos, advisor roundtables, special reports, articles, and more, simply enter your email address below, click the "Sign me up!" button, and then check your inbox for further details.