The Dow enjoyed a week of strong gains on rising expectations about the likely industry friendly policies of the Trump administration. Economic data released this week continued to be largely positive in nature. Meanwhile, the Fed raised rates for the first time this year. Though the move was initially met with apprehension by investors, markets slowly warmed to the move. Oil prices continued to be volatile in nature.

Last Week’s Performance

The Dow increased 0.7% after recently beaten down sectors staged an impressive rebound. Gains in sectors like consumer staples and healthcare helped the blue-chip index finish at a record high. Expectations that Donald Trump will adopt new policies including expansionary infrastructure spending, financial deregulation and tax cuts continued to have a positive impact on broader markets.

Moreover, shares of Coca-Cola Company (KO Quick QuoteKO - Free Report) increased 2.5% after announcing that its CEO Muhtar Kent, will be stepping down after 8 years. He’ll be replaced by Coca-Cola’s current President, 51-year-old James Quincey.

The index posted its fifth straight weeks of gains, increasing by 3.1%. Most of last week’s gains came on the back of Trump induced rally and encouraging domestic economic data. Expectations over Trump’s economic policies continued to boost markets, while strong service data helped investors offset Italian referendum concerns. Also, investor sentiment bolstered after ECB’s announcement about trimming bond-buying volume.

The Dow This Week

The index increased 0.2% ahead of the Fed’s two-day policy meeting’s commencement. The Dow extended its winning streak into the sixth straight session even as other benchmarks declined. Investors refrained from making big bets ahead of the Fed’s two-day policy meeting. Both the financial and technology sector, which had registered strong gains over the last few weeks, plunged.

During the weekend, some of the key non-OPEC members including Russia decided to reduce their crude production by 558,000 barrels per day. This boosted oil prices to their highest levels since July 2015.

The index increased 0.6% on Tuesday, hitting an all-time record for the seventh straight session. Trump induced rally continued to have a broad-based positive impact on key indexes with the blue-chip index closing less than 100 points short of the desired psychological level of 20,000. At that point, the index had increased 13.6% year-to-date and more than 8% since the results of the presidential election were announced.

The index lost 0.6% on Wednesday after the Fed signaled that rates will be increased at a quicker pace next year when the economy is strong enough to sustain it. The Fed now expects three rate increases next year, one higher than the number of rate hikes projected in its September meeting.

Separately, oil prices fell on crude oversupply concerns and stronger dollar. The EIA reported that crude stocks at the Cushing terminal in Oklahoma increased to its highest level in last six months last week. An increase in interest rates strengthened the dollar which also weighed on oil prices.

The index increased 0.3% on Wednesday as the Trump induced rally continued to have a broad-based positive impact on key indexes. Also, investors reassessed Fed’s decision to raise key interest rates at a faster pace next year and welcomed a slew of encouraging economic data.

CPI rose 0.2% in November. Moreover, CPI rose 1.7% over the past twelve months, its best gain since Oct 2014. Separately, the NY Empire State Index came in at 9 in December, significantly higher than last month’s reading of 1.5.

Components Moving the Index

The Boeing Co. (BA Quick QuoteBA - Free Report) has boosted its quarterly dividend by 30% and authorized a new stock repurchase plan of $14 billion, which replaces the existing share buyback program. Zacks Rank #3 (Hold) rated Boeing will now pay a quarterly dividend of $1.42 per share, up from $1.09 paid earlier, bringing the annual dividend yield to 3.6% from the prior level of 2.8%.

This means that each Boeing shareholder will now gain an extra 13.6–18.3% on each common share of the company. The company will pay the revised dividend on Mar 3 to stockholders on record as of Feb 10. (Read: Boeing Announces 30% Dividend Hike: Time to Buy the Stock?)

Chevron Corporation (CVX Quick QuoteCVX - Free Report) announced its 2017 capital spending plans on Dec 7, 2016. The second-largest U.S. oil company by market value has pegged its 2017 capital budget at $19.8 billion – the fourth consecutive reduction in the budget. The stock has a Zacks Rank #3.

This $19.8 billion worth of capital and exploratory investment budget for 2017 is 42% lower than the 2015 outlay. Also, the budget is expected to be at least 15% below the projected 2016 capital investments.

Of the total budget, roughly 87% has been allocated for oil and gas exploration projects worldwide, while 11% has been set aside for downstream businesses. (Read: Chevron Provides 2017 Capex Budget Worth $19.8 Billion)

ExxonMobil Corporation (XOM Quick QuoteXOM - Free Report) recently announced its decision to appoint Darren Woods as the chairman and CEO. Woods would succeed Rex Tillerson, who is stepping down from the position after President-elect Donald Trump put forth his name as secretary of state.

While ExxonMobil has gained 5.6%, the broader market has increased by 10.3%. The impact of the aforesaid development on the stock price remains to be seen.

Cisco Systems Inc. (CSCO Quick QuoteCSCO - Free Report) won another patent ruling against Arista Networks (ANET) regarding the use of Cisco’s network device technology in Arista’s Ethernet switches without the former’s permission.

As per Mary Joan McNamara, the judge who presided over the case at the U.S. International Trade Commission (ITC), two of Zacks Rank #4 (Sell) rated Cisco’s patents were infringed by Arista. Although the ruling is scheduled for a review over the next few months by the commission, if found guilty, Arista products being imported into the U.S could face a ban.

Cisco had filed the case in Dec 2014 alleging that Arista used Cisco’s patented technologies in its switches to enhance performance and speed of networked devices and computers. The stock has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

General Electric Company (GE Quick QuoteGE - Free Report) recently announced a 4% hike in its dividend payout to a quarterly payment of 24 cents per share or 96 cents on an annualized basis. The increased dividend is payable on Jan 25, 2017 to shareholders of record as on Dec 27, 2016. Based on the closing price of $31.78 on Dec 9, 2016, the proposed dividend affirms a yield of 3.0%. The stock has a Zacks Rank #3. (Read: GE Hikes Quarterly Dividend by 4%, Maintains Core Focus)

Pfizer, Inc. (PFE Quick QuotePFE - Free Report) announced that it received FDA approval for crisaborole topical ointment to treat mild-to-moderate eczema, or atopic dermatitis, in patients two years and older. The ointment will be sold under the brand name Eucrisa.

Zacks Rank #3 rated Pfizer added crisaborole to its pipeline with the Anacor acquisition in June. The approval of Eucrisa, a PDE-4 inhibitor, is based on data from two pivotal phase III studies. (Read: Pfizer: FDA Approves Eczema Ointment; Xtandi Fails Study)

Performance of the Top 10 Dow Companies

The table given below shows the price movements of the 10 largest components of the Dow, which is a price weighted index, over the last five days and during the last six months. Over the last five trading days, the Dow has gained 1.1%.

Next Week’s Outlook

Despite the initial hiccup after the rate hike announcement, markets have continued to rally higher. Optimism about the policies of the new administration has boosted stocks. Meanwhile, there are signals that the economy continues to improve. Investors have also come to terms with the fact that the Fed will increase its pace of rate hikes next year. At this point, it is difficult to predict how long such a rally will continue.

But the nature of economic reports could provide a fundamental basis to market movement in the days ahead. Next week’s releases included data on housing and the all-important GDP report. If these are also largely favorable, stocks could have a firmer basis for surging in the days ahead.

Now See Our Private Investment Ideas

While the above ideas are being shared with the public, other trades are hidden from everyone but selected members. Would you like to peek behind the curtain and view them? Starting today, for the next month, you can follow all Zacks' private buys and sells in real time from value to momentum . . . from stocks under $10 to ETF and option moves . . . from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trades >>