Dow Slips as Boeing Cuts Gains, Covid-19 Cases Surge

This post was originally published on this site – The Dow turned negative Wednesday, as Boeing (NYSE:BA) cut gains following an early-day surge, while rising Covid-19 cases continued to threaten the economic outlook.

The Dow Jones Industrial Average fell 0.43%, or 129 points. The S&P 500 was down 0.35%, while the Nasdaq Composite fell 0.05%.

The Federal Aviation Authority ordered the ungrounding of Boeing’s 737 Max, which was involved in two deadly crashes. Boeing was marginally higher, after surging more than than 6% earlier, after Morgan Stanley warned that the stock was getting too hot as fundamentals headwinds remained.

The positive vaccine news and the 737 Max ungrounding “does not affect our financial estimates for Boeing,” Morgan Stanely said in a note, Bloomberg reported. Getting more positive on Boeing would require a ramp-up in orders of the aircraft.

“The path that led us to this point was long and grueling, but we said from the start that we would take the time necessary to get this right,” said Federal Aviation Administration chief Stephen Dickson. “I am 100 percent comfortable with my family flying on it.”

Following the news, several airlines that carry the 737 Max in their fleet confirmed that would begin to fly the jets within weeks.

United Airlines (NASDAQ:UAL) said it plans to fly its Boeing 737 Max jets in the first quarter next year, while American Airlines (NASDAQ:AAL) said it will fly at the end of the year, while Southwest Airlines (NYSE:LUV) will fly the jets in the second quarter.

The broader market was also propped up by a jump in value stocks as investors digested further positive news on from Pfizer (NYSE:PFE) on its Covid-19 vaccine.

Pfizer and BioNTech reported final data analysis showing their coronavirus vaccine was 95% effective in preventing Covid-19, and also said they had surpassed the safety levels needed to seek authorization for the vaccine within days.

The urgency of a vaccine has been exacerbated in recent weeks as the spread of the virus continues to gather pace in the U.S., with deaths nearing 250,000, raising worries over larger parts of the U.S. may impose lockdown measures.

New York City is set to shut temporarily shut schools on Thursday, and switch to fully remote learning to curb the spread of the virus.  

Energy stocks, meanwhile, were boosted by a smaller-than-expected build in weekly inventories and expectations a sooner rather than later rollout of the vaccine could boost global growth and shore up oil demand.

U.S. weekly crude inventories rose by 0.78 million barrels, according to the Energy Information Administration, well below forecasts of 1.65 million.

On the earnings front, investors digested earnings from Target and Lowe’s.

Target (NYSE:TGT) reported better-than-expected earnings of $2.79 a share and same comparable-store sales of 20.7% that topped estimates, sending its shares about 4% higher.

Lowe’s Companies (NYSE:LOW), meanwhile, reported third-quarter earnings of $1.98 per share just missed estimates, but same-store sales jumped 30.1%, above expectations for a 22.8% increase. Its share fell 7%.

Tech struggled to participate in the broader move higher. (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), Microsoft  (NASDAQ:MSFT) Facebook (NASDAQ:FB) slipped, while Apple (NASDAQ:AAPL) was roughly unchanged.  

In other news, General Motors (NYSE:GM) climbed on reports the automaker is set to unveil a plan to ramp-up spending on electric vehicle expansion.

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