Compared to last year around this time, the Dow Jones Industrial, DJI, is sitting pretty for all those brokers on Wall Street, up at $15,399.65 from 2012′s high of $13,368.55 — according to Yahoo Finance – and still rising. So what are the major factors behind what continues to look like spectacular tricks from the Industrial Average? According to CNN Money, this 17.52 percent rise from last year can be credited to the following top five contributors.
1. Visa Inc. (NYSE:V)
Last year, around this time, Visa was sitting $59.95 lower than it sits today. Since then, Visa has had an exciting year though, expanding into new regions of Africa in a licensed agreement with Kenya Commercial Bank, and looking to the future of mobile.
According to Reuters, Visa is now available in the South Sudan, and taking advantage of a market where, historically, there has been little in the way of bank accounts and financial infrastructure. With so few options in place for the public there, Visa’s move seized a sizable market.
Visa also discussed new mobile plans earlier this month at the fifth Visa Global Security Summit. “We are standing at a crossroads, a place where plastic is turning into mobile,” said Chief Enterprise Risk Officer Ellen Richey, adding that, “The payments industry has to embrace innovation and renew its commitment to the principles and standards that have made us so successful to date.”
Yet the year hasn’t been all butterflies and banks for Visa, with a $7.2 billion settlement fight in a suit made by merchants over credit card fees and a U.S. Federal Judge recently appealing a decision on transaction fees that could put banks in a worse position on the revenue they accumulate –according to Reuters and the New York Times respectively.
2. International Business Machines Co. (NYSE:IBM)
IBM’s position here is rather a shock, consider the low revenue reported on its third quarter earnings — a result of low sales in its large services and software unit. “We fell short on revenue,” said IBM’s CEO Ginni Rometty, according to Forbes. Even so, the company has managed to beat out Apple (NASDAQ:AAPL), and its new cloud service pulled in a nice number, even if it did not reach hoped for numbers.
3. Goldman Sachs Group Inc. (NYSE:GS)
Another surprise, Goldman, like IBM, has found itself falling short on revenue — according to CNN Money. “The third quarter’s results reflected a period of slow client activity,” said Goldman’s CEO Lloyd Blankfein, but said the bank had higher hopes for the fourth quarter.
He points to Congress in part for the bank’s failings, saying, “As longer term U.S. budget issues are resolved, we could see an improvement in corporate and investor sentiment that would help lay the basis for a more sustained recovery.”
4. 3M Co. (NYSE:MMM)
Judging by its press releases, 3M has been doing quite well for itself in the innovation department, with new software for law enforcement, lightweight plastics, and its commercial rooftop system’s market success. Considering 3M’s placement on Fast Company’s list of “The World’s 50 Most Innovative Companies in Healthcare,” in 2012, the present standing is no great shock.
5. Boeing Co. (NYSE:BA)
Airbus’ – owned by The European Aeronautic Defense and Space Company (EADS) — snatching of the $9.5 billion deal with Japan Airlines from Boeing earlier this month had to hurt, judging from the New York Times’ assessment, and the PR mess in September regarding Boeing’s 787 Dreamliner problems didn’t help. The company did get a surprising boost in aircraft sales in China, but that seems to be the only silver lining on an otherwise stormy set of clouds.
It’s fairly clear that a cheerful report from DJI doesn’t overrule the largely — though not entirely — slippery and rocky footing the top five are finding themselves standing on this year. Perhaps once Congress makes its moves three month from now, solidifying the debt ceiling and spending authority, revenue for some companies will improve. Unfortunately for many though, this hardly solves all of their problems — unless Senators Harry Reid (D-Nev.) or John Boehner (R-Ohio) know how to fix an airplane.