Wall Street looked messier on Wednesday than the unfinished stadium construction sites for the World Cup in Brazil. After multiple record-setting days recently, the Dow Jones Industrial Average (DJINDICES: ^DJI ) dropped 102 points as investors take a break from the high-flying fun.
1. Boeing stock falls after Virginia House upset
When politics crosses paths with business, it's no fun. On Wednesday, Rep. Eric Cantor of Virginia lost his Republican primary to a professor from a college you've probably never heard of. Why's that a big deal? The Tea-Party drive to kill government spending just got stronger. And the guy who might replace Cantor for an important House chairmanship wants to shut down the Export-Import Bank of the USA.
"Ex-Im" Bank -- ever heard of it? It's an export financing bank supported by the U.S. government that helps measly little companies from equally measly countries buy expensive American toys -- like airplanes. When Boeing (NYSE: BA ) gets an order for 20 airplanes from Heavenly Honduras Airlines, it creates American jobs. This business- and jobs-friendly deal is at risk now with the emboldened Tea Party forces in the House of Representatives.
The stock fell 2.3% for Boeing, which estimates that Ex-Im Bank support helps make $10 billion of sales happen this year that otherwise might not.
2. Restoration Hardware earnings jump 200%
Move over, Pottery Barn. There's a much cooler home furnishings company making American homes look mature and wise. Shares of Restoration Hardware (NYSE: RH ) popped over 13% in after-hours trading Wednesday following its evening earnings report release. RH enjoyed $366.3 million in quarterly revenue, a 22% rise from the same period in 2013.
Crafting pewter sconces isn't the only focus at Restoration Hardware -- in fact, the company's 2014 strategy is all about real estate. RH currently has 69 stores in North America and plans to open 30 more, which will generate up to $5 billion in annual sales once complete.
The takeaway is that investors don't only love RH's weathered wall decor; they also love CEO Gary Friedman's financial projections. he expects RH's full-year 2014 revenue to reach around $1.8 billion, with $443 million to $453 million in revenue during the next quarter. It's all part of RH's attempt to one day control all the world's wedding registries.
3. World Bank downgrades world economic growth for 2014
It stinks getting downgraded, especially if you're the world. Economists at the World Bank reduced their expectations of economic growth in 2014 from 3.2% to 2.8%.
The Ukraine crisis and the polar vortex were two main drivers. The U.S. is the world's biggest economy, at over 20% of the world's GDP, and we shrank at an annualized 1% in the first quarter. The whole world's markets booed this buzzkilling news and reduced their portfolios of growth-dependent stocks.
As originally published on MarketSnacks.com
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