Leaders Of The Dow

Investors riding the wave of the Dow Jones Industrial Average may have a severe case of whiplash from the index's trip below 7,000 in mid-March to its more recent flirtations with 8,000. By taking a look at a range of sectors represented by a handful of the Dow's best performers since the beginning of the year, investors can gain insight into the characteristics of a well-diversified basket of core holdings.
Technology
IBM (NYSE:IBM) finished 2008 with record revenues over $103.6 billion. IBM managed this even though revenues were slightly off for the fourth quarter, down 6% to $27 billion in 2008 versus the same time period for the previous year. Despite the global economic turmoil, IBM's revenues in the Americas fell only 2% in the fourth quarter making up for a 12% decline in Europe, the Middle East and Africa. Strong revenues from IBM's software segment actually increased during the fourth quarter, led by sales of middleware products.

Drilling down further into IBM's software revenues shows investors an 18% increase in information management software. IBM stock is up approximately 20% from the beginning of the year through April 16, 2009, and the company will be reporting first-quarter earnings on April 20. (For more, see Core Earnings Measure Up.)

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Financials
American Express (NYSE:AXP) managed to increase revenues to $28.3 billion at the end of 2008, from 2007's $27.6 billion. Additional expenses for the year decreased earnings per share from $3.36 on a diluted basis to $2.33. The pressure from the economic environment compelled the credit card company to implement a $449 million restructuring plan in its most recent fourth quarter. The company's goal is to lower the overall cost structure of the firm. American Express stock has increased nearly 12% since the beginning of the year through April 16, and the company will be reporting its first-quarter earnings on April 23. (For more on the recent activity in the financial sector, see Different Shades Of Banking Profits.)

Basic Materials
El DuPont de Nemours & Co. (NYSE:DD) also managed to increase revenues by 4% in 2008, driven by growth in emerging markets and strong sales numbers from its agriculture and nutrition, and pharmaceuticals segments. DuPont put its own restructuring plan in place with a $535 million pre-tax charge taken in the fourth quarter. DuPont stock is also up approximately 12% through April 16, and the company will be reporting first-quarter earnings on April 21.

Final Thoughts
For the handful of stocks mentioned, the combination of diverse geographic and segment revenues along with the implementation of restructuring plans at the end of last year has translated into positive returns since the beginning of the year. Whether it's through the use of mutual funds, ETFs like the Diamond Trust ETF (NYSE:DIA) or individual stocks, a diversified basket of holdings built with a dollar cost averaging approach can make for a solid portfolio.