Stocks Drop and Oil Jumps in Afternoon Trading
U.S. stock markets rallied in early trading but around noon EDT stocks dropped like a rock with little warning. By 3:15 p.m. EDT the Dow Jones Industrial Average was down 0.43% and the S&P 500 had lost 0.19%.
The rally this morning was because of a 13% jump in Ford's light vehicle sales in June and a 6.5% increase in sales at General Motors. Factory orders also rose by 2.1% in May, showing reasonably good manufacturing activity after yesterday's improved managers' sentiment. But the data couldn't keep the market moving higher and the rally has stalled.
Boeing has fallen 2.1% today to lead the Dow lower. Bloomberg is reporting that United Airlines' 787 Dreamliner fleet is canceling flights at four times the rate of the rest of its fleet, another sign that the new aircraft isn't quite ready for prime time. The company's widely publicized battery issues battered the stock earlier this year but Boeing has rebounded and the company says it has solved the battery issues, easing investors' fears. New aircraft can come with bugs but the number being found on the new 787 Dreamliner is concerning. Airlines in Japan have also cancelled flights for a number of reasons and investors should keep a close eye on how airlines feel about their massive investment in this new aircraft.
Shares of tech giant Microsoft have fallen 1.9% today after losing Xbox head Don Mattrick to Zynga. Mattrick was reportedly unhappy with his new role in a reorganization at Microsoft, looking for a bigger role than he would have had heading the hardware division. This is a big deal because the Xbox is supposed to be Microsoft's path into consumers' homes and now the division will need to find new leadership. I don't think this is earth-shattering news for Microsoft, but the company will have to adjust to the loss.
While the stock markets fell today, oil advanced by 1.5% after the Egyptian military issued an ultimatum to President Mohammed Morsi to stop protests taking place across the country. Traders are worried about escalating violence and disruptions to oil supply in both Egypt and Syria and that's why oil is up today.
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Fool contributor Travis Hoium manages an account that owns shares of Microsoft. The Motley Fool owns shares of Microsoft. 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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