Stocks Posting a Modest Rebound, as Jitters Ease. Dow Leaders: INTC, CAT, HPQ, MRK, and GE

Published on Monday, 25 January 2010 11:51 Written by Christopher Lynn

New York, January 25^th (TradersHuddle.com) – Stocks moved higher, posting a modest rebound after posting the biggest weekly decline since March. Ben Bernanke will likely be confirmed as Fed Chairman, easing investors’ concerns, as Bernanke gained more support in the Senate.

At 11:21 AM the Dow Jones Industrial Average was climbing 0.32%. The S&P 500 index was adding 0.53%, while the NASDAQ was gaining 0.26%.

Investors gave a muted response to a report that showed existing-home sales fell 16.7% in December, much worse than the 10% drop expected, as homebuyers pulled back on a believe that the homebuyers tax credit will expire in November. However Congress extended the credit until April, providing more incentives to the struggling housing market.

Financial stocks charged out of the gate as investors scooped up bargains in the beaten-down sector, but mid-morning the sector paired back gains. Techs were among the morning's best performers ahead of results from Apple (NASDAQ:AAPL) and Texas Instruments (NYSE:TXN) after the market closes.

17 of the 30 Dow components were posting gains. Posting the biggest percentage gain in the Dow Jones Industrial Average was Intel Corporation (NASDAQ:INTC), as shares of the largest chipmaker in the world jumped 2.16% to $20.34. Intel rebounded and broke its 50 day moving average at $20.23. Semiconductor shares were higher, rebounding from sharp losses last week on earnings disappointment and global economic growth concerns. Intel shares in particular are also receiving a boost from a Barron’s article that stated that shares of the chipmaker could climb at least 25% in the coming years as businesses and consumers start a new replacement cycle for their computer equipment.

The second best Dow component was Caterpillar (NYSE:CAT), as shares of world’s largest maker of earth moving equipment added 1.82% to $55.24. Caterpillar rebounded from sharp losses last week on concerns that China will need to tighten monetary policy, slowing down the fastest economy in the World. Caterpillar biggest customers the basic material companies were hammered last week.

Hewlett Packard (NYSE:HPQ) was posting the third biggest advance in the Dow Jones Industrial Average as shares of the maker of computers and printers rose 1.70% to $50.13.  The tech was higher as investors bid the sector up, ahead of earnings from Apple (NASDAQ:AAPL) and Texas Instruments (NYSE:TXN). Shares of Hewlett Packard could also be benefiting from mounting speculation that demand worldwide will continue to grow as a new replacement, which was delayed by the economic crisis, gets underway.

The fourth best advance in the blue chip index is Merck (NYSE:MRK), as shares of the maker of Singulair and Zoccor added 1.67% to $39.52. Shares of the drug maker were rebounding after posting a weekly decline of more than 4%, as a broad based sell-off affected, even the defensive sectors.

The fifth best Dow stock was General Electric (NYSE:GE), as shares of the aircraft engine maker added 1.41% to $16.34. Goldman Sachs boosted its target price to $21. Estimates were also raised to reflect lower taxes and higher industrial profit, maintaining its “Buy” rating.