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Boeing's Big Rebound Outshines the Dow's Modest Rise

Stocks have kept up the market's record rise today after the Dow Jones Industrial Average (DJINDICES: ^DJI  ) hit a new all-time high to close last week's run. Boeing (NYSE: BA  ) has come back in a big way from Friday's Dreamliner-fire-fueled plunge, although the rest of the Dow has risen only slightly, and blue-chip stocks are split evenly between risers and losers. Let's catch up on the stories you need to know.

Boeing lifts off
Boeing's shares have bounced back with a 3.7% gain today, leading the Dow after an early probe of the 787 Dreamliner fire at London's Heathrow airport last week didn't  indict the plane's battery as a cause of the incident. That's a relief for Boeing investors after the 787's battery-caused grounding dominated talk of the company for the majority of early 2013. Still, the company's PR headaches regarding its newest airliner haven't stopped its stock from shooting up by more than 32% year to date.

Given the company's impressive backlog of commercial aircraft and renewed orders for the 787, it's hard to imagine that the Heathrow fire will do much, if anything, to slow this stock down, outside the dent it inflicted on Friday. Even as sequestration's budget cuts impact Boeing's defense division, this company's commercial airline segment has stepped up to outpace any losses.

Microsoft (NASDAQ: MSFT  ) is also having a good day, with shares up 1.1%. But unlike Boeing, the tech giant has plenty of chinks in its armor. The company recently cut its prices on its Surface RT tablets in an effort to boost sales. Microsoft's entry into the tablet arena hasn't been pretty so far: IDC revealed in a report that the company shipped only about 900,000 RT and Pro tablets combined in the first quarter and heavily trails the industry's leaders in market share, controlling less than 2% of the total market. By comparison, tablet leader Apple controls almost 40% of the market, according to tech site The Verge.

While it's vital that Microsoft strikes into the tablet market, considering the power of mobile in today's consumer tech industry, the Surface has yet to reward the firm with strong sales. It hasn't slowed down Microsoft's stock -- shares have soared by more than 24% in the past three months alone -- but Apple and other tablet leaders have little to fear from the Surface right now. Perhaps more time will provide momentum as consumers get used to Microsoft's offering, but for now the company is only treading water with this tablet.

On the other side of the Dow today, Travelers (NYSE: TRV  ) ranks among the index's biggest losers, with shares down 1.3% so far. This stock has done well year to date, gaining more than 15%, but the run-up has come just as the Atlantic hurricane season is about to start. NOAA predicted back in May that seven to 11 hurricanes are likely to form in the Atlantic this year, with three to six developing into major storms of category three or higher intensities.

It's bad news for Travelers and its fellow insurers if a category-three or higher hurricane plows into the U.S. like Hurricane Sandy did. The Insurance Information Institute estimated that Sandy cost more than $18 billion in insurance claims after the storm slammed the Northeast last year, and while it's unlikely that such a freak will impact such a major area this year, a big hit could still wallop Travelers' and other firms' bottom lines. Keep a close eye on those weather reports.

Travelers and the Dow's blue-chip stocks offer plenty for every type of investor, but are any of these big names the best pick for your portfolio? The Motley Fool's chief investment officer has selected his No. 1 stock for this year. Find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

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  • Report this Comment On July 15, 2013, at 3:41 PM, plange01 wrote:

    its obviously going to come to to other countries less influenced by boeing to make sure this plane is safe or not allowed to fly in their airspace.

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Related Tickers

9/30/2016 10:09 AM
^DJI $18264.77 Up +121.32 +0.67%
BA $131.58 Up +0.55 +0.42%
Boeing CAPS Rating: ****
MSFT $57.41 Up +0.01 +0.02%
Microsoft CAPS Rating: ****
TRV $114.54 Up +0.67 +0.59%
The Travelers Comp… CAPS Rating: *****