Boeing Jumps While Merck Holds Down the Dow

The Dow Jones is flat as blue chips vascillate.

May 2, 2014 at 1:32PM

Boeing (NYSE:BA) is trying to push the Dow Jones Industrial Average (DJINDICES:^DJI) up, but a fall in pharmaceutical stocks is keeping the Dow Jones flat today. As of 1:25 p.m. EDT the Dow was down 31 points to 16,528. The S&P 500 (SNPINDEX:^GSPC) was flat at 1,883 points.

The Dow Jones started the day in the green following a far better April nonfarm payrolls than many had expected. The economy added 288,000 jobs in April, and unemployment dropped to 6.3%. But the Dow sank back to breakeven for the day after tensions flared in Ukraine and pharmaceutical stocks dropped.

BA Chart

BA data by YCharts.

Merck (NYSE:MRK) is down 2.3% after the company reported that the Data and Safety Monitoring Board recommended that Merck halt its trials for its ovarian cancer treatment, a joint venture with Endocyte. While this is a disaster for Endocyte, whose shares are currently down 62%, Merck will be fine, given its diversified drug portfolio.

This is certainly a setback, though, as Merck is in the process of focusing its efforts on cancer drugs, cholesterol drugs, diabetes drugs, and vaccines. As part of this effort, Merck is debating either selling off or strengthening its animal health and consumer health divisions. Merck has been asking for $10 billion for its consumer health business, and yesterday a rumor surfaced that Bayer was in talks to buy the business for $14 billion. While Merck's stock is dropping today, it's still near an all-time high. Despite the setback, Merck's plan to refocus itself and replenish its pipeline should allow Merck to continue to crush the Dow for years more.

Today's Dow leader is Boeing (NYSE:BA), up 1.5%. Boeing today announced that it delivered its 75th 747 to Lufthansa today. Lufthansa has been buying 747s from Boeing since 1970. The Boeing 747 is now on its fifth version, the 747-800. This shows the staying power jetliners have and the reason analysts are so excited about Boeing's new plane, the 787 Dreamliner.

The 787 Dreamliner was first delivered three years ago and promises significant operational savings to airlines, as it weighs less and uses less fuel than the 747. As the worldwide economy strengthens, you can expect that people will travel more and airlines will have more cash to invest in new planes, which should mean increased orders for Boeing. Some analysts see value in the shares, including Alliance Bernstein, which reaffirmed its "outperform" rating today, as well as its price target of $167.

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Dan Dzombak has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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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