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The Dow Jones Industrial Average jumped 700 points on Jun 2, its best day of the year so far. A hotter-than-expected jobs report and Washington’s 11th-hour deal to avert a government default drove the rally.

SPDR Dow Jones Industrial Average ETF (DIA - Free Report), tracking the Dow Jones Index, gained 2.1%. While most of the stocks in the ETF rose, five stocks – 3M Company (MMM - Free Report), Caterpillar (CAT - Free Report), Dow Inc. (DOW - Free Report), NIKE Inc. (NKE - Free Report) and American Express Company (AXP - Free Report) led the rally.

Hiring surged as the economy added better-than-expected 339,000 jobs in May. The job gains for March and April were also stronger than previously reported. The April jobs figure was revised up by 41,000, while the March number was revised up by 52,000. Though the unemployment rate rose by 0.3 percentage points to 3.7%, job gains were broad-based in professional and business services, government, health care, construction, transportation and warehousing, and social assistance.

Meanwhile, Congress approved a deal to lift the country's borrowing limit, days before the world's largest economy is due to default on its debt. Additionally, hopes that the Federal Reserve may pause interest rate hikes added to further enthusiasm. The latest data from the CME FedWatch tool shows around 75% odds of no rate hike at the June Federal Reserve meeting. The remaining Fed watchers expect a quarter-point rate hike.

Let’s take a closer look at the fundamentals of DIA and its performance.

DIA in Focus

This is one of the largest and most popular ETFs in the large-cap space, with AUM of $27.7 billion and an average daily volume of 2.8 million shares. Holding 30 blue chip stocks, the fund is widely spread across components, with each holding less than 10% share. Financials (20.2%), healthcare (19.3%), information technology (18.4%), industrials (14.5%), and consumer discretionary (13.5%) are the top five sectors.

DIA charges 16 bps in annual fees and has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.

Best Performing Stocks of DIA  

3M Company provides diversified technology services in the United States and internationally. The stock jumped about 8.7% on the day. Its earnings are expected to decline 14.3% this year.

3M Company makes up for 2% of the assets in DIA and has a Zacks Rank #3 (Hold). It has a VGM Score of B.

Caterpillar, known for its iconic yellow machines, is the largest global construction and mining equipment manufacturer. The stock rose 8.4% in the last trading session and accounts for 4.4% in the fund’s basket.

Caterpillar has an expected earnings growth rate of 27.5% for this year and has a Zacks Rank #1. It has a VGM Score of B.

Dow Inc. is a material science company, providing a world-class portfolio of advanced, sustainable and leading-edge products. The stock makes up 1% of the assets in the DIA portfolio.

Dow Inc. gained 5.3% on the day and has an expected earnings decline rate of 49% for this year. It has a Zacks Rank #3 and a VGM Score of A.

NIKE Inc. is engaged in the business of designing, developing and marketing of athletic footwear, apparel, equipment and accessories, and services for men, women and children worldwide. It gained 4% in the last trading session and accounts for 2.1% in the fund’s basket.

NIKE is expected to see an earnings growth of 22.9% for the fiscal year (ending May 2024) and has a Zacks Rank #3. It has a Momentum Score of B.

American Express is a diversified financial services company, offering charge and credit payment card products, and travel-related services worldwide. Shares of AXP were up 3.6%.

American Express earnings are expected to grow 13.2% this year. It accounts for 3.3% share in DIA and has a Zacks ETF Rank of 3. It has a Value Score of B.

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