|By Marketwired .||
|January 24, 2013 08:20 AM EST||
NEW YORK, NY -- (Marketwire) -- 01/24/13 -- A string of positive economic data helped propel the Dow Jones industrial average and the S&P 500 Index to five-year highs last week. The Dow's and S&P 500's weekly gain of 1.2 percent and 1 percent, respectively, were the third consecutive week of gains. Research Driven Investing examines investing opportunities in the S&P 500 Index and provides equity research on McDonald's Corporation (NYSE: MCD) and Yum! Brands, Inc. (NYSE: YUM).
A steadily improving U.S. housing market combined with a 5-year low in jobless claims has helped boost investor optimism heading into 2013. Last week, the Labor Department reported initial claims for unemployment benefits declined 37,000 to a seasonally adjusted total of 335,000, which was the largest weekly drop in nearly 2 years. Strong earnings from major companies such as Alcoa and General Electric have also contributed to the markets recent surge. Collectively, companies in the S&P 500 Index are projected to report a 3.8% earnings growth in the fourth quarter, according to S&P's Capital IQ.
"The economy is entering the year maybe not with a running start, but certainly a head start," Jack Ablin, BMO Private Bank's chief investment officer, said in a recent telephone interview, according to Bloomberg. "It helps build a nice story for 2013."
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McDonald's is the world's leading global foodservice retailer with more than 34,000 locations serving approximately 69 million customers in 119 countries each day. For the fourth quarter of 2012 the company reported revenues of $6.95 billion and earnings of $1.38 per share, both of which came in above Wall Street estimates. A new pipeline of new products such as the new Fish McBites and further promotion of their dollar menu are expected to be a key driver for sales in 2013.
Yum! Brands is the world's largest restaurant company in terms of system restaurants with over 38,000 restaurants in more than 120 countries and territories. KFC, Pizza Hut and Taco Bell are among the company's restaurant brands. For the full year 2012, the company forecasts EPS growth of at least 13 percent, or $3.24 per share. Yum! Brands is scheduled to release its fourth quarter and full year results on Tuesday, February 5th.
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