Equities traded lower for most of Thursday’s session amid fears of the spreading of a new strain of the coronavirus in China. Over night, the Chinese government quarantined the city of Wuhan, a metropolitan area with the population of New York and Chicago combined. Travel authorities in Macau scrapped plans for the Chinese Lunar New Year celebration. However, stocks were able to muster some momentum late in the session and close well off the lows of the day.
- The S&P 500 eked out a gain of 0.11%
- The Dow Jones finished lower by 0.09%
- The Nasdaq Composite added 0.20%
- In the “you don’t see this everyday” category, Boeing (NYSE:BA) was among the Dow’s best-performing names today, jumping 2.8%
Over the course of this week, I’ve been highlighting various earnings reports from Dow components and pointing today as a particularly busy day on that front. Procter & Gamble (NYSE:PG) was among the Dow’s dogs, but not to be outdone, Travelers Companies (NYSE:TRV) tumbled 5% after its earnings report. That easily made the insurance company the worst-performing name in the Dow Jones today.
Not to diminish the importance of Procter & Gamble and Travelers, but they aren’t the biggest names in the Dow and the blue-chip index was able to mitigate losses due to contributions from Boeing and some of its other larger components, including some tech stocks.
In late trading, 13 of the 30 Dow members were in the green.
Boeing: Believe It
Boeing has been an easy mark for negative commentary in recent months and the company is to blame for that. However, for one day at least, the stock got going in the right direction. Boeing CEO David Calhoun still has plenty of work to do to restore airlines’ and employees’ confidence — it’s going to be a long road on both fronts — but it appears the new CEO is at least being forthright about where the company is at today.
In comments out Wednesday, Calhoun said there isn’t a chance that the 737 Max passenger will never fly again.
“Even the [Federal Aviation Administration] has a lot of confidence in this airplane,” he said.
He expects production of the controversial jet will restart over the next couple of months, but efforts to get the plane in the sky again revolve around the FAA making that call and pilots regaining faith in the safety of the plane.
Microsoft on the Prowl?
Microsoft (NASDAQ:MSFT) hasn’t been mentioned here in a bit, but there’s good reason to change that today and not just because the stock was among the Dow winners.
As is often noted in relation to Microsoft, through its Azure unit, the company is increasingly a dominant force in the cloud computing market. To Microsoft’s credit, much of Azure’s rapid growth has been organic, but sometimes bolt-on acquisitions help, too.
In a note to clients today, Piper Sandler analyst Brent Bracelin highlighted a slew of companies Microsoft could acquire to bolster its cloud unit. It’s speculative at this point, but all of the ideas with the exception of one would be easily digestable for Microsoft.
Intel (NASDAQ:INTC) reports earnings today after the close. Given how much the stock has run up in recent days coupled with the tepid reaction to Texas Instruments (NASDAQ:TXN) fourth-quarter results, some caution with Intel may be warranted over the near-term though the stock was one of the better Dow performers today.
American Express (NYSE:AXP) nudged higher today in advance of its fourth-quarter report Friday before the bell. Analysts expect the credit card company to earn $2.01 a share on revenue of $11.37 billion for the December quarter, compared with earnings of $2.32 on revenue of $10.47 billion last year.
Bottom Line on the Dow Jones Today
With earnings season moving along, here’s an interesting negative/positive (N/P) ratio that may not be getting enough attention.
“For 19Q4, there have been 77 negative EPS pre-announcements issued by S&P 500 corporations compared to 35 positive, which results in an N/P ratio of 2.2 for the S&P 500 Index,” according to Refinitiv.
That sounds bad, but that 2.2 is below the long-term average of 2.7.
As of this writing, Todd Shriber did not own any of the aforementioned securities.