Boeing Drags as the Dow Endures a Bouncy Day

Merck rises after the EMA accepts the company's PD-1 inhibitor MK-3475 for review.

Jun 30, 2014 at 2:30PM
Daily Fool

The market is off to a bumpy start for the short holiday week, with the Dow Jones Industrial Average (DJINDICES:^DJI)bouncing around the chart all day and sitting just under breakeven as of 2:35 p.m. EDT. Most of the index's 30 member stocks are falling on the day. Merck (NYSE:MRK) is among the Dow's top winners with a 0.8% gain. Meanwhile, Boeing (NYSE:BA) bottomed out on the index with a nearly 1% drop. Let's catch up on what you need to know.

Boeing vies for South Korea's contract

Boeing Kc

Boeing's KC-46 tanker. Source: Boeing Media.

Boeing's is bidding for a South Korean contract worth $1.4 billion to deliver tankers capable of refueling military aircraft in flight. South Korea opened for bidding back in March, reportedly pitting Boeing's KC-46 tanker against the A330 from longtime rival Airbus and the B767-300ER from Israeli Aerospace Industries.The South Korean government expects to decide on a winner later this year, and the deal could be another big win for Boeing's KC-46, 179 of which are being delivered to the U.S. Air Force under a 2011 contract.

It's also a chance for Boeing to jump back into the South Korean military market after abruptly missing out on a nearly $8 billion fighter aircraft deal last year. Seoul spurned Boeing's F-15 Silent Eagle after judging the warplane lacking in necessary stealth capabilities, dealing a big blow to Boeing's hopes for a big contract to revitalize its sluggish military aerospace division. The segment saw its contract backlog slide by more than 1% last quarter, with its operating margin decreasing by 1.1% year over year.

Commercial aerospace still drives Boeing's results -- and that segment has been flying high for the company -- but finding new avenues for growth in the military aerospace arena in the current climate of budget cuts would boost the company's investors, who have watched this stock slide by more than 5% to date in 2014.

Meanwhile, European regulators accepted the Merck's submission for approval of its experimental melanoma drug MK-3475. The PD-1 antibody was accepted for review by the FDA in May, and Merck investors need to keep both eyes locked on this drug's outcome.

MK-3475 is one of the biggest blockbuster candidates in the company's pipeline. Merck has already established agreements to investigate the drug in testing with other leading pharmaceuticals, pushing analysts to peg peak sales at up to $3 billion if it is approved. All odds are on that approval, as MK-3475 has performed well in clinical trials and earned a breakthrough therapy status from the FDA during its clinical run. If all goes as planned, this drug could be a huge breath of life into Merck's lagging sales, which have taken patent cliff-related hits lately in falling by more than 3% year over year in its last quarter.

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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.

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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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