Mulally's Rejection Sparks Microsoft's Fall as the Dow Dives

Microsoft shares tumble as the company's CEO hunt goes on, while Boeing rises behind yet another strong sale.

Jan 8, 2014 at 2:31PM

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 markets are slipping sharply today across the board, with a few gainers helping to keep the Dow Jones Industrial Average (DJINDICES:^DJI) from falling deeply into the red. As of 2:30 p.m. EST, the Dow's dropped more than 70 points, with all but a handful of blue-chip member stocks down for the day. Microsoft's (NASDAQ:MSFT) leading the pack lower, shedding about 2%, but Boeing (NYSE:BA) has continued its run from last year by gaining about 0.4% today. Let's catch up on what you need to know.

Microsoft's CEO hunt goes on
Microsoft's CEO dilemma goes on, but one thing seems clear: The long-projected front-runner to replace Steve Ballmer won't be taking the job. Ford (NYSE:F) CEO Alan Mulally announced yesterday that he would stay at his current job through 2014, sending Ford's stock higher while taking down Microsoft shares. It's an understandable disappointment for Microsoft investors: Mulally's done a great job at keeping sales soaring at Ford, with the company in particular posting a 49% sales jump in China in 2013. That's a lost opportunity for Microsoft, but the ongoing uncertainty around Microsoft's leadership is one big trouble hanging over the company's head this year.

Microsoft now doesn't expect to finalize its replacement for Ballmer until at least next month, although the company has said it is close to naming a successor. With Microsoft making new strides in the consumer tech market while looking to maintain its dominance in software, it's pivotal that the company find its next leader soon -- shares have fallen roughly 6% in the past month over the wait.

Boeing hasn't had any trouble with its stock price lately, as 2013's Dow leader continues its ascent today. Boeing's agreement with its largest union for a new eight-year contract has settled investors' nerves and secured labor peace for the near future, an anchor of stability that couldn't come at a better time. Boeing's pushing ahead into the civilian airliner market with such strength that it can't afford a hiccup with labor.

A report yesterday indicates that Boeing's not slowing down at gobbling up new orders, either, as the aerospace giant reportedly inked a $4 billion deal with India's SpiceJet for up to 42 737 MAX aircraft. The 737's long been Boeing's civil aircraft mainstay, and with the company expecting around 70% of new aircraft deliveries between 2012 and 2032 to be single-body craft, expect similar deals in this company's future.

That's music to the ears of Boeing investors. Operating margin has picked up lately at Boeing's commercial aerospace division, gaining more than 2 percentage points in the most recent quarter to rise to 11.6%. Sales are on a roll, with commercial revenue growth far outpacing the sluggishness seen in Boeing's defense division, and the aircraft backlog hasn't seen any remote sign of turbulence over the past year. It's clear skies ahead for Boeing despite last year's run-up: In the long run, this stock has plenty of room to soar.

The one stock you can't ignore this year
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Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Ford. The Motley Fool owns shares of Ford and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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