After The Close - The stock market made considerable progress earlier today, but pared some of its gains later in the session, before firming again by the close. At the close of trading, the Dow Jones Industrial Average was ahead 148 points; the S&P 500 Index was up 19 points; and the NASDAQ was higher by 52 points. Advancing issues outpaced decliners by a comfortable margin on the NYSE. Furthermore, all of the major equity groups gained ground, with sizable moves in the healthcare and basic materials names.
Meanwhile, the economic news was largely favorable today. Specifically, the Producer Price Index (PPI) increased just 0.1% in February, suggesting that inflation is not yet a pressing concern. Elsewhere, durable goods orders improved 0.4% in January, which was a better-than-anticipated reading. Finally, construction spending advanced 1.3% in January, which stood in stark contrast to the soft showing registered in December.
In corporate news, shares of Boeing (BA – Free Boeing Stock Report) were under some pressure again today. Investors remain concerned that the company’s 737 MAX 8 aircraft may have some safety problems. In the wake of recent events, the United States, along with numerous other countries, will not allow these planes to fly, until more information is available. Officials are working to investigate the situation. Meanwhile, Boeing stock has slipped roughly 10% over the past few days.
Technically, the broader S&P 500 Index pulled back briefly in early March, touching its 200-day moving average, located at the 2,750 mark. This area seems to have provided some support, as stocks have firmed up, for now. Looking ahead, investors will clearly want to see a trade deal between United States and China materialize in the coming weeks. - Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
Before The Bell - The stock market, which broke its five-day losing streak on Monday, when a nice rally in the technology stocks led the way, opened the second trading day of the week on a mixed note. As earlier in the week, tech again shone, with shares of Apple (AAPL – Free Apple Stock Report), a big winner on Monday, climbing further. At the same time, shares of Boeing (BA – Free Boeing Stock Report) retreated anew. That issue has faltered badly this week, following a crash over the past weekend, of its 737 MAX 8 craft, that took the lives of all on board. This split result, which featured a solid gain in the NASDAQ, but a loss in the Dow Jones Industrial Average continued through the morning.
In all, Boeing shares fell more than 6%. That latest decline in that stock, on top of a similar drop in the shares on Monday, came about after several countries, including the United Kingdom and China, grounded all flights involving the 737 MAX model. The plane has now been involved in two deadly crashes in six months. Boeing stocks also received a brokerage house downgrade. In the meantime, data out yesterday affirmed that the Consumer Price Index had risen by 0.2% in February, matching expectations. The core estimate, which excludes food and energy, added just 0.1%--well below forecasts.
The market's split performance would continue into the early afternoon, with the tame inflation data along with a disappointingly low jobs figure (data were released this past Friday showing that just 20,000 positions had been added in February) combining to give the Federal Reserve plenty of leeway in moving along patiently on the interest-rate front. In all, as we moved inside the final two hours of the latest session, the Dow remained lower while the S&P 500 Index and the NASDAQ both were sporting solid gains on the day. The small- and mid-cap composites, lower earlier, had moved into the plus column as well.
The market then would go back and forth as the afternoon progressed with the Dow holding lower, but the S&P 500, the NASDAQ, and the smaller averages all gaining traction. Also, advancing stocks easily outdistanced declining issues on the session. All told, this was a constructive performance by the Street, with just another sizable drop in Boeing stock holding back another string wire-to-wire win for the bulls. Meantime, bond yields were down as confidence in the equity market rose anew, as we have put together back--back winning session after last week’s trials.
Looking ahead to the middle session of the week and as we look ahead to the next housing report, with sales of new homes due out at 10:00 AM (EDT) tomorrow morning and to data on industrial production, which is to be released on Friday, we see that stocks were lower in Asia in the overnight hours, while in Europe, the principal bourses are mixed at this hour on Brexit concerns. Also, oil prices are higher and Treasury note yields, as noted, off rather substantially in yesterday's trading, are flat. Finally, U.S. equity futures are up modestly in early action. – Harvey S. Katz, CFA