It was a busy day on the market on the first full day of earnings season. Alcoa kicked off the reporting period on an up note after delivering earnings in line but better-than-expected revenues. The aluminum maker is often seen as a bellwether for the economy, and the Dow Jones Industrial Average (INDEX: ^DJI) rose 61 points, or 0.5%, in response. Despite trading up most of the day, however, Alcoa finished down 0.2%.
After falling for two straight days in the wake of numerous reports on problems with its new Dreamliner jet, Boeing (NYS: BA) rebounded strongly with gains of 3.6% today as it defended the 787. It issued a statement saying that it has "extreme confidence" in the new jet and its chief engineer said the plane was 100% safe. This announcement comes despite ongoing federal investigations into a battery fire in one of its planes on Monday. Just this week, a separate 787 experienced a fuel leak, and Nippon Airways canceled a 787 flight after problems with the plane's brakes. Expect continued volatility with the stock until this issue straightens out.
Bank of America (NYS: BAC) shares, meanwhile, tumbled 4.6% after Credit Suisse downgraded the stock from outperform to neutral with a largely valuation-based argument. Analyst Moshe Orenbuch also expressed concern about bad mortgages and future mortgage-related lawsuits. Shares of the financial giant had gained nearly 30% in just two months so perhaps the stock had become overbought.
Hewlett-Packard continued to make gains, climbing 3% on a research note that said the company could be worth $29 a share if broken up. As its core PC business shrivels up, the stock is now seen as a value play by many analysts. Its share price tumbled through most of 2012, but has now gained 35% since the Autonomy write-off.
Outside the Dow, Facebook (NAS: FB) topped $30 for the first time since July, climbing 5.3%, apparently in response to a mysterious press conference next week. The social network's invitations said simply, "Come and see what we're building," a message Wall Street seems to have interpreted as a new revenue-generating product.
The battle of Herbalife (NYS: HLF) heated up once again as fund manager Daniel Loeb took an 8% stake in the company. That stock had been battered just a few weeks ago after fellow fund manager Bill Ackman disclosed a short position in the stock and called the company a "pyramid scheme." Shares of the health supplement company have battled back since then and gained another 4.2%. Heavy trading is likely to continue tomorrow as Herbalife has scheduled an investor conference to respond to Ackman's charges. The SEC also announced an inquiry into the company today.
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The article Dow Kicks Off Earnings Season on the Right Foot originally appeared on Fool.com.
Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends Facebook. The Motley Fool owns shares of Bank of America and Facebook and has the following options: Long Jan 2014 $50 Calls on Herbalife. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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