The Dow Dips as Visa Climbs, Boeing Falls

The Dow Jones Industrials looked poised to finish the quarter quietly on Monday, with few stocks making big moves.

Jun 30, 2014 at 11:00AM
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The Dow Jones Industrials (DJINDICES:^DJI) were down 22 points as of 11 a.m. EDT, once again reflecting the ambivalence that investors feel about a stock market that has climbed to record heights throughout the past quarter but which has raised fears of retreat if economic conditions don't keep cooperating. On that score, today's reading on pending home sales was a positive, with a gain of 6.1% marking the fastest pace of growth since early 2010. Yet investors are still trying to figure out how much of that enthusiasm is already priced into the Dow Jones Industrials. Battling in today's tug-of-war were Visa (NYSE:V) and Boeing (NYSE:BA), which moved in opposite direction in morning trading.

V

Visa climbed nearly 1% as shareholders essentially ignored a patent-infringement case that a small company called SmartMetric filed against the company and its primary credit card network rival. The suit alleges that the EMV-chip cards that are becoming more common in the U.S. credit card market include intellectual property owned by SmartMetric, which is seeking billions in damages from Visa. Prompting today's gains for Visa, though, is likely the idea that a healthier housing market can be expected to produce growth in consumer spending generally. Since Visa earns revenue based on the volume of transactions made, healthier economic conditions bolster the company's bottom line regardless of how cardholders spend their money.

Boeing, on the other hand, lost more than 1%. The aerospace giant continued its long rivalry with Europe's Airbus over the weekend, with reports that the South Korean government took bids from both Boeing and Airbus, as well as at least one other party, for roughly $1.4 billion in aircraft tankers to allow its military aircraft to refuel in midair. With the refueling tankers, South Korean planes should extend their flight times appreciably, making it easier for the country to defend itself against a North Korean threat as tensions build between the two neighbors. Even though Boeing has increasingly concentrated on its commercial fleet over military support aircraft, it has a lot of expertise in the tanker niche, and so investors clearly hope the company can win South Korea's business and add to its impressive existing list of international buyers.

On a holiday-shortened week, the Dow Jones Industrials could see less activity than usual. But if unexpected news hits, the volatility might be higher than normal while many market participants are away for the holiday.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Visa. The Motley Fool owns shares of Visa. 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.

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