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 (DJINDICES: ^DJI  ) was down 0.43% and the S&P 500 (SNPINDEX: ^GSPC  ) 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 (NYSE: BA  ) 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 (NASDAQ: MSFT  ) 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.

If violence spreads investors need to be prepared for the fallout, which may involve plays outside of oil. One of the alternatives in natural gas, which the U.S. is going to begin exporting and we've picked one incredible natural gas company that presents a rare "double-play" investment opportunity today. We're calling it "The One Energy Stock You Must Own Before 2014," and you can uncover it today, totally free, in our premium research report. Click here to read more.


Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2521211, ~/Articles/ArticleHandler.aspx, 8/21/2014 2:16:53 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement