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Boeing and 3M Celebrate Dividends While Dow Waits for Fed Announcement

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What's the matter? Upset you didn't receive JPMorgan Chase CEO Jamie Dimon's awesome 2013 panoramic holiday card? The MarketSnacks team already has it up on our fridge. Too bad the festive gesture couldn't stop the Dow Jones Industrial Average (DJINDICES: ^DJI  )  from dipping 9 points Tuesday as investors await the big Federal Reserve announcement.

1. Boeing and 3M jump on dividend Increases
It paid dividends to be Boeing  (NYSE: BA  )  and 3M (NYSE: MMM  )  shareholders Tuesday. The mighty Pacific Northwest-based 747 jet manufacturer and the crafty Minnesota based Post-it notes maker are similar in one way: Both announced higher dividends for shareholders Tuesday
It's the time of the year for gift-giving, and management decided it's time to increase the quarterly "thank you" cash payment to shareholders (aka dividends). With high corporate profits but fewer obvious investment opportunities, companies have been spoiling shareholders with these gifts like drunk-happy elves for most of 2012 and 2013.
Boeing's dividend was raised 50% and 3M's jumped 35%. These promises of higher quarterly cash returns increased the stocks' value, so Boeing's stock rose 1% and 3M climbed 3%. Boeing also said it will purchase $10 billion of its own shares back, but 3M's stock jump was biggest because its new sticky note is stickier than ever.

2. Fed policymaking meeting kicks off
Day numero unois in the books. The Federal Reserve began its eight-times-a-year, two-day policy-setting meeting on Tuesday, which ends Wednesday with a major press conference from Chairman Ben Bernanke (and an unreal shrimp cocktail hour).
The takeaway is that investors are eager to hear about the future of the Fed's stimulus. The central bank has been driving interest rates lower to boost the economic recovery -- but with increasingly solid econ data (like Monday's impressive Industrial Production numbers), Wall Street expects the Fed might slow down the stimulus soon. Stimulus has helped boost the Dow more than 100% since 2009, so Wall Street's jittery about the end of the Fed party. 

3. Senate ends budget debate
It's (almost) official. After the House voted last week overwhelmingly to send a bipartisan budget bill to the Senate, the Senate voted 67-33 Tuesday to have a final vote on the proposal Wednesday -- that prevents a filibuster from slowing down the deal's mojo.
So is it done? Sorry, but the fat lady didn't sing. The Senate first has its final vote, which will require a 51-vote majority. Then the legislation meanders over to President Obama's desk, where he can sign it into law. D.C. takes things slow and steady.
The takeaway is that Wall Street expects a more stable government will mean a more stable economic recovery. The deal will end three years of budget catfights, will prevent the government from shutting down (again) in January, and is a relatively impressive compromise: For example, the plan adds $63 billion combined to domestic programs (making Dems happy) and the military (making Republicans happy). 

  • The two-day Fed meeting ends
  • Fed Chairman Ben Bernanke delivers big policy speech
  • Housing data for October and November (delayed from the government shutdown)

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Related Tickers

9/29/2016 4:35 PM
^DJI $18143.45 Down -195.79 -1.07%
BA $131.03 Down -1.20 -0.91%
Boeing CAPS Rating: ****
MMM $175.37 Down -2.22 -1.25%
3M CAPS Rating: ****