Markets have been hampered by several concerns, ranging from macroeconomic weaknesses to a variety of international concerns. Things are looking up as of now, with the Dow (DIA) having posted three consecutive daily increases. However, all three benchmarks have taken losses over a one month period. The blue-chip index leads the pack with a loss of 3%.

Volatility continues to plague the markets, and one of the major reasons for the market’s troubles is weak second quarter results. Lower revenues have been the major disappointment this time around. Additionally, even if certain stocks have beaten revenue estimates, a year-over-year decline has been experienced. In such an environment, adding stocks from the blue-chip index with earnings and revenue beats as well as a year-over-year increase in revenues could be a good move.

Strong Dollar Hurts Q2

A stronger dollar has emerged as one of the main reasons behind the dismal second quarter earnings season so far. Most American multinationals are finding it difficult to beat revenue expectations in the second quarter as a strengthening dollar continues to drag down profits. Though the dollar did not increase significantly during the second quarter, it had a major impact on earnings on a year-over-year basis.

While a stronger dollar makes American goods more expensive in foreign countries, it also boosts demand of foreign goods as they are cheaper. Global growth worries and the inevitable Fed funds rate hike this year are speculated as the main reasons behind the dollar surge.

Q2 Revenue Weaknesses

At this point, a large chunk of Q2 earnings results have already been reported. As of Aug 12, 455 S&P 500 (SPY) companies had already reported their Q2 numbers. Total earnings for these companies are down 2.6% from the same period last year on 4.1% lower revenues, with 70.0% beating EPS estimates and 49.6% beating revenue estimates.

It is clear from these figures that revenues are the major cause for concern. For the Dow, 10 of the 29 components which have already posted results missed revenue estimates. Another 12 have exceeded revenue estimates, but suffered year-over-year declines. These include the likes of Johnson & Johnson (JNJ -Analyst Report), McDonald's Corp. (MCD - Analyst Report) and Microsoft Corp. (MSFT -Analyst Report).

Yesterday, Wal-Mart Stores Inc. (WMT - Analyst Report) posted revenues of $120.23 billion, marginally up year on year. This beat our consensus estimate of $119.97 billion. Only 4 components have beaten both earnings and revenue estimates while also experiencing a year-on-year increase in revenues.

Our Choices

In a season where revenue weakness has emerged as a major theme, examining growth in revenues is necessary to measure the investor-worthiness of a particular stock. Additionally, a year-on-year revenue contraction does not always bode well for the stock.

This is why it is best to choose stocks which qualify on all three counts. The stocks we have selected are all Dow components which have beaten earnings and revenue estimates with revenues posting year-on-year growth. Our selection is backed by growth and valuation metrics as well as good Zacks Rank.

Apple Inc. (AAPL - Analyst Report) posted an EPS of $1.85, which beat our Zacks Consensus Estimate of $1.80. The company also passed revenue predictions, reporting Q3 revenues of $49.6 billion against our consensus estimate of $49.1 billion. Additionally, revenues climbed 33% year over year to $49.6 billion.

Apple holds a Zacks Rank #2 (Buy) and the projected earnings growth is 41.7%, higher than the industry growth rate of 19.4%.The forward price-to-earnings ratio (P/E) for the current financial year (F1) is 12.82.

UnitedHealth Group Inc. (UNH - Analyst Report) reported second-quarter 2015 earnings of $1.64 per share, beating the Zacks Consensus Estimate of $1.57. Earnings soared 15.5% year over year.

UnitedHealth posted revenues of $36.3 billion, up 11.3% year over year and surpassed the Zacks Consensus Estimate of $35.7 billion.

Apart from a Zacks Rank #2 (Buy), UnitedHealth has expected earnings growth of 11%. It has a P/E (F1) of 19.57x.

Visa Inc. (V - Analyst Report) posted third-quarter fiscal 2015 (ended Jun 30) operating earnings per Class A common share of 74 cents, beating the Zacks Consensus Estimate of 59 cents.

Total operating revenue for the reported quarter was $3.5 billion, up 12% year over year and ahead of the Zacks Consensus Estimate of $3.4 billion.

Visa holds a Zacks Rank #2 (Buy) and has expected earnings growth of 15.2% for the current year, higher than the industry growth rate of 11.4%. It has a P/E (F1) of 28.48x lower than the industry average of 30.30.