What Could Move the Markets Today

Yesterday, the Dow Jones Industrial Average (INDEX: ^DJI) rebounded from Monday's loss with a 0.58% gain, and the S&P 500 (INDEX: ^GSPC) did the same with a 0.37% gain. Today, look for earnings from two Dow components, a rate decision from the Federal Reserve, and a report on an important economic indicator that could drive market gains or losses. Here's a quick look on how things could turn out.

Flying high?
Heading into its earnings release early this morning, Boeing (NYS: BA) has both headwinds and tailwinds. The airplane producer pumped out 32% more deliveries of commercial aircraft in the first quarter of this year, allowing it to erase a greater number of orders from its backlog. This is important because at the end of 2011, that backlog had almost $300 billion in orders. And Boeing doesn't get paid until it delivers.

On the other hand, Boeing still could suffer from delays in delivering its new 787 Dreamliner model, as well as defense-budget cuts. Air India, which ordered 27 Dreamliners from Boeing, will receive its first model this May after a three-year delay. As a result of that delay, Air India asked Boeing for $1 billion in compensation, with a later figure reported at $500 million, which a Boeing executive denied. Other airlines have followed Air India in asking for compensation, including United Continental (NYS: UAL) , which is expected to receive five Dreamliners this year instead of six. Because of defense-budget cuts, Boeing plans to close a plant in Wichita, Kan., by 2013.

Building the recovery
Also reporting pre-market, Caterpillar (NYS: CAT) looks to ride continued growth in Asia, despite the recent slowdown in China. While GDP growth in China has slowed from 8.9% in the fourth quarter to 8.1% in the first quarter, the Chinese engineering machinery industry expects to grow 100% by 2015. In addition to rebuilding Japan's infrastructure after the 2011 earthquake, and ending 2011 with the highest backlog in its history, Caterpillar could continue its market-beating performance. This year, its stock is up almost 20%.

However, if analysts have overestimated the potential growth in China, the recovery stalls, or a fall in commodity prices lowers the demand for mining, Caterpillar's stock could lose its gains.

The Fed speaks
With the market interpreting any recent throat-clearing by a member of the Federal Reserve as gospel to future policy, the Fed's rate decision, due around noon today, will no doubt be overanalyzed. It's almost certain the Fed will stick with the current interest rate, but it may also use this announcement to prepare the market for any deviation from its previous rate forecasts that saw the current low rates continuing into 2014.

An indicator to watch
Data on durable-goods orders for March are also released today. Often analyzed as a gauge of manufacturing activity, this report measures the dollar volume of goods with a three-year or greater lifespan that have been ordered, shipped, or unfilled. The market expects a 1.7% drop, down from February's 2.4% gain. An even larger drop could spook the market, or an upside surprise could inspire more bulls to buy. So far, durable goods have been steadily improving since the recession:

US Durable Goods Orders Chart
US Durable Goods Orders Chart

US Durable Goods Orders data by YCharts

Are you ready for the rest of earnings season?
Other Dow components reporting later this week are ExxonMobil, which reports tomorrow, and CVS, Merck, and Procter & Gamble, which all report on Friday.

Stocks can jump or fall on any tidbit of news, but over the long term it's the underlying business in which you invest and that drives solid long-term returns. Earnings reports are a great peek into how a business is performing, as well as how it might deliver over several years. To make the most of this round of earnings, check out our free report, "5 Stocks Investors Need to Watch This Earnings Season."

At the time thisarticle was published Fool contributorDan Newmanholds shares of ExxonMobil. He holds no other shares of the companies mentioned above. Follow him on Twitter, where he goes by @TMFHelloNewman.Motley Fool newsletter serviceshave recommended buying shares of Chevron, ExxonMobil, and Procter & Gamble. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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