What a difference one quarter can make. Last year, these stocks were at or near the bottom of the heap of the Dow Jones Industrial Average. Fast-forward three months and the landscape has changed completely. Here is a look at the current alpha dogs of the Dow and how they have managed to reverse their fortunes.

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Bank Run
So far this year, Bank of America (NYSE:BAC) has been the lead dog of the Dow with its year-to-date return around 73%. Considering the 60.82% loss that the stock posted last year, it has been quite the turnaround story in the first quarter.

The company has continued to shore up its balance sheet with increased liquidity and lower debt levels. Bank of America has also seen a healthy increase in assets under management and associated asset management fees over the course of the past year. If the bank can maintain its revenue momentum, this stock may still have room to run.

Another Dow component that has torn the cover off the ball in 2012 has been JPMorgan Chase & Co. (NYSE:JPM). The stock has jumped roughly 38% since the beginning of the year. In 2011, shares of JPMorgan experienced a 23.70% haircut. The company is operating in a tough environment but is still enjoying some positive trends such as a decline in its net charge-off rate. For more information, see: Analyzing A Bank's Financial Statements.

Windows of Opportunity
Shareholders of Microsoft (Nasdaq:MSFT) had to be wondering when the stock was going to breakthrough after years of stagnation. Last year's drop of 7.22% did little to instill confidence that the tide was about to turn. Amazingly enough, the stock is up around 25% this year.

It has recently been speculated that Microsoft is working with Nokia (NYSE:NOK) to develop a 10-inch tablet which will feature Windows 8. "DigiTimes" has noted that its sources expect such a tablet to hit the market no sooner than the fourth quarter. In the meantime, the company will be looking to boost its position in the Chinese smartphone market as its efforts in the United States have yet to make their mark.

One other Dow stock that has taken the market by storm in the early months this year is Caterpillar (NYSE:CAT). The construction equipment maker has seen its stock surge over 19% since the beginning of the year. The company has been the beneficiary of a resilient demand for its products from overseas markets. For more information, see: Overseas Investing No Protection Against Downturn.

The Bottom Line
The stock market rally that has led most equities higher this year has had an especially profound impact on last year's cellar dwellers in the Dow. Several of them have checked in with outsized gains that have surprised even the staunchest supporters of these companies. The returns from the alpha dogs of the Dow will likely be harder to come by as the year rolls on, but they are off to an impressive start.

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At the time of writing, Billy Fisher did not own shares in any of the companies mentioned in this article.

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