Following its worst week since October 2008, the Dow Jones Industrial Average opened lower by about 0.35% to under 11,830. Safety stocks were doing well as gloomy reports on consumer spending and manufacturing had traders shunning riskier equities. It has been a strong week for gold and Treasuries, as traditional safe-haven assets have gained.
Boeing (NYSE:BA) was down about 50 cents to under $67.30, about a 0.7% drop. The debt ceiling agreement in Washington includes substantial cuts in defense spending. Boeing is down almost 10% for the month, as investors also have concerns about Boeing maintaining its U.S. market share for civilian airlines. Candlestick patterns for Boeing are lengthening, indicating more intense selling.
Doubts about economic growth had Caterpillar (NYSE:CAT) down about a dollar to below $96.20, around 1% off. For the month, Caterpillar is down more than 15% because of a poor second-quarter earnings report. Caterpillar is trading almost 20% beneath its 20-day moving average.
Johnson & Johnson (NYSE:JNJ) lost about 80 cents per share in early morning action, falling more than 1.25% to under $62.50 a share. Poor results from major drug companies have cast a cloud over the sector. Johnson & Johnson is down almost 5% for the week and 6% for the month. It has a relative strength index rating of 22.49, with 30 being considered the floor for when a stock is oversold.
As a consumer safety stock, McDonald’s (NYSE:MCD) rose more than 40 cents and 0.5% to over $85.50 in early buying and selling. After posting strong earnings for the second quarter, McDonalds has received four positive analyst recommendations in the past week.
Wal-Mart (NYSE:WMT) also was up about 0.5%, picking up more than 30 cents a share to go over $52. Down for the week, month and quarter, Wal-Mart is trading beneath its 20-, 50- and 200-day moving averages and has an RSI rating of 34.16.
Microsoft (NASDAQ:MSFT) was trading higher by about 0.4%, picking up about a dime per share to sell for more than $26.90 in the morning session. The tech sector has performed well this earnings season. Microsoft is up more than 3% for the month.
Jonathan Yates does not own any of the stocks mentioned in this article.
