These Dow Gainers Bucked a Flat Market
After yesterday's big jump for the stock market, it's only natural for investors to take a break from the bullishness. Sure enough, stocks were largely quiet on Wednesday, although the bond market saw yields run up to four-month highs following the Fed's stress tests. Without much news to drive stocks one way or the other, broad measures ended mixed and mostly flat, with the Dow Jones Industrials (INDEX: ^DJI) finishing up 17 points at 13,194 and the S&P 500 falling two points to 1,394.
I have already looked at how the banks in the Dow jumped out of the gate this morning. So let's turn to three other Dow stocks that gained ground today.
Boeing faces a dilemma. On one hand, it's gotten a lot of new business lately. But when it can't deliver the goods, the aerospace giant can cost itself a lot of money.
On one hand, orders keep pouring in. The U.K. ordered $300 million in equipment to support its fleet of C-17 cargo transports, and it also got a contract to provide four satellites for an Asian and a Mexican satellite company.
But concerns about delivery still abound. The company said that it still expects to fix a problem with its 787 Dreamliner and meet its delivery goals, but reports came out today that it would pay Air India $500 million for delays in delivery -- reports that Boeing denied. In the end, Boeing needs to get planes built and out to customers to meet its full potential.
GE is an industrial stock, but it still acts like a financial company sometimes. A Credit Suisse research note suggested that the company might pay a special dividend or boost its regular payout, pointing to favorable performance under conditions similar to what the Federal Reserve applied in its stress tests.
Although GE shrank its GE Capital division following the financial crisis, it still produces a lot of profit. If the division resumes paying dividends to GE, then it would leave the parent company with capital to return to shareholders , either through dividends or buybacks.
Travelers also enjoyed gains because of its membership in the financial sector today. But given how the stress tests treated its insurance peer, those gains aren't assured: MetLife (NYS: MET) was one of the few companies to fail the stress tests, although the company asserted that the Fed's methodology didn't apply well to its insurance business and suggested that its true capital situation was healthier than the test suggested.
What may be pushing Travelers higher today are higher bond yields. Low interest rates have been problematic for the insurance industry, which relies on interest from premium income to provide returns to help pay claims. If the bond bull run is over, then that could help Travelers and its peers in the years to come.
What will tomorrow bring?
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At the time this article was published Fool contributorDan Caplingerdoesn't own shares of the companies mentioned. You can follow him on Twitterhere. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Fool has adisclosure policy.
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