3M and Boeing Drag on the Dow Today

Markets are up nicely today, but the Dow Jones Industrial Average is being held back by the weight 3M and Boeing have on the index.

Jan 30, 2014 at 3:30PM

Most of the market is in a great mood today, but Boeing (NYSE:BA) and 3M (NYSE:MMM) are causing the Dow Jones Industrial Average (DJINDICES:^DJI) to underperform the other major indices. The S&P 500 is up 1.3% and the Nasdaq Composite 2%, while the price-weighted Dow is only up 0.8%.

News on the economic front is generally positive. Early estimates of GDP growth in the fourth quarter came in at 3.2%, following 4.1% growth in the third quarter. The figure will be revised, so don't take that as a final reading, but it shows continued economic growth despite lower government spending and a partial shutdown of the federal government in October.  

On the downside, the National Association of Realtors' index of pending home sales dropped 8.7% last month to 92.4, the lowest reading since October 2011. High home prices, rising interest rates, and bad weather contributed to the drop. Don't think that the housing recovery is over completely, but it may need a breather and let job growth catch up to value growth seen over the past few years.

Why Boeing and 3M are a big deal today
Just four of the Dow Jones Industrial Average's components are down for the day but the impact they're having on the index is huge. The Dow is a price-weighted index with only 30 components, so Boeing and 3M's weight on the index is 10.6%. They're down 2.3% and 1.7%, respectively, accounting for the underperformance of the Dow.  

Boeing's drop is really a hangover from yesterday when the stock fell 6.1% after the aerospace giant reported earnings. As fellow Fool Adam Levine-Weinberg pointed out this morning, investors should put more stock in strong fourth-quarter earnings than a weak 2014 guidance. Boeing outperformed its 2013 guidance by nearly $1 per share, and CEO Jim McNerney isn't one to overpromise and underdeliver if he can help it.

3M's stock is down after the company reported earnings that had sales up 2.4% to $7.57 billion and net income up 12.6% to $1.1 billion, or $1.62 per share. The disappointment comes from weaker than expected sales, but currency changes that took a 1.7% bite out of growth added some definite headwinds. Long term, for 2014 management sees organic growth between 3% and 6%, which is a great sign for a company that has one of the longest running dividends on the market.

How to invest in great dividend stocks
Great dividends like 3M will pay off for patient investors and our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

Travis Hoium manages an account that owns shares of 3M. The Motley Fool recommends 3M. 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers