The rollercoaster ride continued on Wall Street today, but stocks swung back near breakeven in late trading to save what could have been a very bad day. In early trading the Dow Jones Industrial Average (DJINDICES: ^DJI ) dropped 127 points on the back of a big overnight drop in the Japanese stock market and a report showing contraction in China's manufacturing. HSBC said preliminary data for its Purchasing Managers' Index in China showed a reading of 49.6, which signals slight contraction and continues a streak of falling numbers. But by the last hour of the trading session, Wall Street had moved on from problems in Japan and China, and the Dow was down just 0.06%, while the S&P 500 (SNPINDEX: ^GSPC ) had fallen 0.25%.
The big headline of the day was Hewlett-Packard's (NYSE: HPQ ) surprise earnings beat and the stock's 16.4% jump today. After the market closed last night the company reported adjusted earnings per share of $0.87 and a 10% decline in fiscal second-quarter revenue to $27.6 billion. Both were enough to beat estimates, and the $0.06 earnings beat was the big driver of the stock's move today. Better-than-expected earnings from HP are great, but let's not forget that every operating segment is in decline, and profit only beat expectations by virtue of massive cost-cutting efforts.
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Boeing (NYSE: BA ) is another big winner today, climbing 1.7%. The stock was upgraded by Bank of America today and given a $120 price target, indicating a 20% upside. More importantly, Chinese regulators cleared the 787 Dreamliner for local flights, opening up another region for the troubled aircraft. This doesn't mean international flights are approved yet, but Chinese airlines are expecting that approval to come in the next few months.
Finally, General Electric (NYSE: GE ) was among the Dow's losers today, falling 0.7%. At a conference yesterday, CEO Jeffrey Immelt suggested that GE could spin off part of GE Capital in an effort to reduce the company's exposure to the financial markets. GE Capital recently announced that it would pay its parent a $6.5 billion dividend, freeing up more money and reducing the finance business, but that could just be the start. It was GE Capital that got GE into trouble during the financial crisis, so moves to return to GE's manufacturing roots should be seen as a good sign.