IBM One of the Few Strong Dow 30 Stocks

International Business Machines Corp. (IBM) continues to be one of the strongest Dow 30 performers and in fact is the largest percentage gainer (at 6.1%) and one of only six components that are up over the past three months, the other stocks being Johnson & Johnson, Wal-Mart, Proctor & Gamble and McDonald’s according to Index Arb. The recent catalyst has been IBM’s second quarter report which blew out analyst estimates – earnings rose to $1.98 per share compared to expectations of $1.81 a share on $25.9 billion in revenue. The underlying momentum has also been driven by the fact that management seems to be pretty confident in achieving $10 to $11 in earnings per share by 2010. There’s no reason why IBM can’t continue being a Dow 30 leader, especially since it still trades at a relatively inexpensive 13x earnings, and thus it should have no trouble breaching $130 resistance on the next market rally.