Boeing Beats Lackluster Orders as the Dow Inches Higher

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Stocks are nosing slightly higher to start the week in a sluggish trading session for the Dow Jones Industrial Average (DJINDICES: ^DJI  ) . As of 2:15 p.m. EDT, the Dow's picked up just more than 10 points, as the blue-chip index's members are split between risers and losers. Boeing (NYSE: BA  ) is putting on a strong showing compared to the other Dow stocks, continuing its upward pace since the aerospace giant beat back its 787 grounding saga earlier in the year. Let's catch up on the markets action you need to know.

Durable-goods orders fall, but Boeing stays in stride
The day got off to a shaky start when U.S. durable-goods orders came in sharply lower for July. Total orders fell 7.3% for the first decline in four months. Economists had projected a drop of 4.7% based on lower airplane orders from Boeing, but auto demand weakened as well. Even with transportation orders removed, durable-goods orders still contracted slightly in July as computers and electrical equipment orders fell sharply.

Boeing signed only 90 new contracts in July versus 287 in June. However, that hasn't hurt the stock much today: Shares of the company have moved about 0.9% higher to rank among the Dow's leaders. While Boeing's orders may have fallen, the new 787 Dreamliner remains on a strong pace despite all the negativity surrounding it this year. China's Xiamen airlines called in an order for six of the aircraft last Friday after receiving approval from the Chinese government, and Boeing just recently unveiled the 787-9, a larger version of the craft.

Downbeat durable-goods orders aren't a great sign for a manufacturing industry that has struggled to move past the recession, but Boeing is one of the best bets in this hard-hit sector. The company's size and breadth have it squarely atop a growing global aerospace industry, and Boeing's total backlog after the first half of the year stood at nearly $390 billion. That was an advance of about 4.5% over the firm's backlog as of the end of 2012 and a sign that the company's future prospects remain strong.

All eyes across the markets are still on Microsoft (NASDAQ: MSFT  ) after the company's CEO, Steve Ballmer, announced last week that he will step down within 12 months -- and the firm's shares are down by about 1% today, ranking among the Dow's hardest-hit laggards. Microsoft's stock soared following Ballmer's resignation, but it's impossible to dismiss the challenges that his successor faces when he or she takes over this company in transition.

It's important to note that Microsoft is not in serious trouble, regardless of what some of the hype around picking a new successor has opined. The company's still among the largest in the world by market cap, and its sales of software -- its core business -- still make up about 75% of the company's total revenue. Microsoft has always had its finger on the pulse of business software, but hardware is what has analysts and investors concerned.

Microsoft hasn't appealed to the hardware- and device-friendly consumer-electronics market very well with its Surface tablet and other devices. What many see as a culture problem at the company -- leadership has missed out on innovative opportunities, such as tablet computing, in the past -- has led to scattered calls for a breakup by Ballmer's successor. Whether or not that's the right path for Microsoft, it's clear the company needs some sort of shake-up if it's going to keep up with hard-charging rivals in the consumer tech space.

The tech world has been thrown into chaos as the biggest titans invade one another's turf. At stake is the future of a trillion-dollar revolution: mobile. To find out which of these giants is set to dominate the next decade, we've created a free report called "Who Will Win the War Between the 5 Biggest Tech Stocks?" Inside, you'll find out which companies are set to dominate and give in-the-know investors an edge. To grab a copy of this report, simply click here -- it's free!

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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: ****
MSFT $52.32 Up +0.43 +0.83%
Microsoft CAPS Rating: ****