Will These Unlikely Winners Keep Leading the Dow Higher?

After a strong performance during the first half of the year, the Dow Jones Industrials (DJINDICES: ^DJI  ) added to its 2013 gains with a 65-point gain. Yet in giving up much more dramatic gains from earlier in the session, the Dow broke its five-day streak of triple-digit moves and finished more than 100 points below its highs of the day. Although strong economic data to begin the second half of the year put investors in a bullish mood, investors will continue to worry about the impact of new information about the economy on the Federal Reserve's decision-making process, especially in light of the rapid rise in interest rates that shook the bond market over the past two months.

Topping the Dow's gainers today was United Technologies (NYSE: UTX  ) , which climbed almost 2% today. For those who identify United Tech primarily with its aerospace division, especially with its acquisition of components maker Goodrich, today's surprise might not seem all that warranted, even with trillions of dollars of aircraft orders expected in the next 20 years likely to help United Tech reap its share of revenue from the industry. But what many don't know is that the company also stands to gain from more general construction activity because of its elevator and heating and air-conditioning divisions.

Meanwhile, insurance company Travelers (NYSE: TRV  ) rose about 1.5%. With deadly wildfires raging in the western U.S., you'd think that insurance companies would be suffering. But rising bond yields will help Travelers earn more income from its investment portfolio, helping it defray claim losses and putting it in a healthier financial situation. Moreover, although claims can bring short-term pain to quarterly results, they also support rate increases in the future that can sometimes more than make up for losses.

Finally, beyond the Dow, Onyx Pharmaceuticals (NASDAQ: ONXX  ) jumped by more than 50% on speculation that the company could receive an even better bid than the one it rejected from Amgen (NASDAQ: AMGN  ) . Onyx argued that Amgen's $120 bid was inadequate in light of the company's value and investors agreed, bidding shares above the $130 level. Whether Onyx's aspirations actually bear fruit in the long run remains to be seen, but what the story tells in broader terms is that merger and acquisition activity is alive and well in this cash-rich environment, even as higher rates make that cash more valuable to hang onto.

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