2 Stocks Pushing the Dow Higher Today
The Dow Jones Industrial Average was up 170 points, or 1.05%, by midafternoon despite two regional Federal Reserve banks reporting declines in their business activity indexes. The Chicago Fed reported a national activity index of -0.39 for January, down from -0.03 in December; any reading above zero indicates growth. The Dallas Fed's business activity index declined to 0.3 this month from January's 3.8 reading. These regional readings, in combination with housing starts in January declining 16%, point to a slowing economy. With those trends in mind, here are some companies making headlines as we kick off the last week in February.
Boeing was1.4% higher today after the company and members of the International Association of Machinists and Aerospace Workers District 837 came to an agreement on a long-term contract extension. The previous contract was set to expire in 2015; instead, more than 2,300 Boeing workers in St. Louis are on contract to 2022.
"We welcome today's ratification," Boeing St. Louis site executive Bill Schnettgoecke said in a press release. "Not only does it better position us to compete, but it also ensures that our highly skilled IAM-represented employees, those with us today and in the future, are appropriately compensated for their important work. Our collective commitment to providing customers with affordable, innovative solutions should be clear to everyone."
This is the second contract extension that switches union workers in certain districts from a pension-style retirement plan to a 401(k)-style contribution plan. That will help the aircraft maker resolve the challenge created by a largely underfunded pension plan. The switch to the new plan will begin on Jan. 1, 2016, and allows the union members to keep previously accrued pension funds from the previous plan. Expect Boeing to continue leveraging its production jobs to convince more union districts to switch to 401(k)-style plans.
General Electric was higher by 2% after announcing plans to accelerate research on complex energy projects. Those projects include research on waterless fracking and gas turbine efficiency. General Electric is putting an additional $10 billion into its "ecomagination" budget through 2020, according to Reuters.
Energy segment is GE's fastest growth segment. "We have a very broad, long-standing commitment to energy," said Mark Little, GE's chief technology officer and head of global research, according to Reuters. Investors should expect General Electric to continue injecting funds into its energy and industrial portfolio as the company continues its transition away from its financial business. Ultimately, I believe this is a good move for the company, and GE could be an undervalued business due to the black eye left from GE Capital during the recent recession. Consider that GE trades at lower price-to-earnings, price-to-book, and price-to-sales ratios than the industry averages, according to Morningstar TTM figures.
The article 2 Stocks Pushing the Dow Higher Today originally appeared on Fool.com.Daniel Miller has no position in any stocks mentioned. The Motley Fool owns shares of General Electric Company. 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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