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Dow Faces Headwinds That Even Wall Street Can't Deny

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Sixteen points. All the Dow Jones Industrial Average (DJINDICES: ^DJI  ) needed yesterday was 16 measly points to reach its all-time high. But just like its close calls before, investors backed off when it got too close for comfort. And today, the first day of $85 billion in spending cuts due to the government's inability to reach a resolution to the shudder-inducing sequestration, the Dow may have a steeper hill to climb in order to reach the record summit.

On top of the spending cuts, investors have been faced with some disappointing economic news as well. Personal income fell in January by 3.6%, the most in two decades. Savings was up 2.6% in December due to increased special dividends and other payouts, which helped offset the drop in income. Consumer spending inched up by 0.2% in January, but the money generally went toward fuel bills in the home and in the car. In Europe, new unemployment figures show an increase to 11.9% in January, an all-time record for the eurozone.

Despite the downer news from Washington today, the Dow has some winners that may help it at least stay flat in trading.

Boeing (NYSE: BA  ) , a huge government contractor, is remaining afloat this morning. Up 0.44% just before 11:30 a.m. ET, the aircraft manufacturer may be getting closer to a solution for its 787 Dreamliner fleet's battery issues. The company has been taking steps to convince its Japanese customers of the craft's safety, and it seems to be paying off -- the president of Boeing's largest 787 customer, ANA, has said he believes that the company has made great strides to resolve the issue and he has confidence that the aircraft will be operational once the battery is functional. In the meantime, Boeing is cutting back on contract workers at a second Dreamliner facility to save costs while the fleet is grounded. But there is good news for the company: It has just inked a deal with Air Lease for 10 777's.

Disney (NYSE: DIS  ) is also up this morning, despite news that the company may have a proxy fight on its hands. After CEO Robert Iger was announced as chairman of the company's board last year, some large institutional investors have made their displeasure known. The company had a long history of independent board leadership, and the investors are worried about transparency. Elsewhere, Disney's new venture with Nintendo, Disney Infinity for Wii U, has just debuted new figurines that will enhance the in-game play. Disney is apparently in talks with Toys R Us for exclusive distribution rights for the figurines. And next week should be a big one for the media side of Disney, as its Wizard of Oz prequel, The Great and Powerful Oz, is set to be released on March 8.

The biggest winner so far this morning is Bank of America (NYSE: BAC  ) , up by 2.58% earlier this morning. The bank has been up and down this week, as usual, but a few good pieces of news may have investors headed its way. The recent announcement by rival JPMorgan that it will be cutting jobs in its consumer banking division may have broadcast a signal for other banks to follow its lead. Other Fools believe that banks are bloated with excess positions to manage the huge mortgage delinquency problem they've faced in the past years, but with those delinquencies falling, those jobs may be adding unnecessary expenses. Second, the bank and its compatriot Citigroup have been extending commercial loans to the European market as that economy continues to struggle. With European banks holding the line, the commercial-lending market was on the verge of freezing -- not something a struggling economy needs. And finally, some good legal news for the bank. In its earnings release, MBIA, which is currently in a legal battle with B of A, seems to have changed its tune, saying a speedy settlement would be the best solution for both businesses.

Bank of America's stock doubled in 2012. Is there more yet to come? With significant challenges still ahead, it's critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool's premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, Financials bureau chief, lift the veil on the bank's operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy, and as an added bonus, you'll receive a full year of FREE updates and expert guidance as key news breaks.

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Today's Market

updated 2 days ago Sponsored by:
DOW 17,873.22 44.93 0.25%
S&P 500 2,099.06 8.96 0.43%
NASD 4,933.51 31.74 0.65%

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Related Tickers

5/27/2016 4:43 PM
^DJI $17873.22 Up +44.93 +0.25%
BA $129.22 Down -0.09 -0.07%
The Boeing Company CAPS Rating: ****
BAC $14.88 Up +0.18 +1.22%
Bank of America CAPS Rating: ****
DIS $100.29 Up +0.48 +0.48%
Walt Disney CAPS Rating: *****