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.
The Federal Reserve's decision to start cutting its bond-buying led to a nearly 300-point rally Wednesday for the Dow Jones Industrials (DJINDICES: ^DJI ) . This morning, though, the Dow gave back some ground, falling 15 points as of 11 a.m. EST as investors considered the long-term implications of the end of quantitative easing. General Electric (NYSE: GE ) and Boeing (NYSE: BA ) were among the stocks contributing to the Dow's decline, while Chevron (NYSE: CVX ) was among the best performers to the upside.
General Electric fell 1.4%, as investors weren't satisfied with the conglomerate's plan to boost revenue and earnings from its manufacturing businesses. CEO Jeff Immelt detailed plans to seek earnings growth of 10% or more from its core divisions, with major contributions expected from the aerospace engine-manufacturing segment and its oil-field services and equipment business. Yet even combined with cost-cutting initiatives, investors worry that the stock's already impressive gains could put a lid on how much any growth from the company will translate into higher share prices.
Boeing dropped 0.6% in the face of continued labor issues with its machinists' union. Dozens of union members held a rally yesterday at Boeing's primary Everett, Wash., facility, demanding the right to vote on a proposed deal that the union's leaders turned down. With Boeing threatening to move production of the next-generation 777X outside the state, management and its Washington-based workers are playing a high-stakes game of chicken in the fight over whether the company should still provide a traditional pension plan and other benefits. With a huge number of states looking to host 777X production, Boeing appears to be in a strong position, but potential negative publicity from its labor strife could cause problems in future negotiations with its workers.
Chevron climbed nearly 1% as oil prices rose once again, leaving the price of West Texas Intermediate crude just $1.50 shy of the key $100 per barrel mark. Investors hope the Fed's pronouncement about economic growth could lead to greater demand for energy in the near future, which could drive further oil-price gains. Moreover, Chevron is positioning itself well worldwide, with well-situated natural gas finds that could power a new industrial revolution in Asia. Overall, if the economy keeps firing on all cylinders, Chevron could be a big winner going forward.
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