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Stock Market News: Boeing Loses More Altitude; Apple Gets a Boost

By Dan Caplinger - Oct 21, 2019 at 11:30AM

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Major benchmarks started the week on a positive note.

Wall Street got off to a good start on Monday morning, as investors had several reasons to be optimistic. Between some progress on major geopolitical issues like Brexit and the U.S.-China trade conflict and a solid beginning to earnings season, market participants hope that stocks can gain some momentum heading toward the end of the year. As of 11 a.m. EDT, the Dow Jones Industrial Average (^DJI -0.19%) was up 28 points to 26,798. The S&P 500 (^GSPC -0.10%) climbed 16 points to 3,002, and the Nasdaq Composite (^IXIC -0.11%) gained 62 points to 8,152.

One reason the Dow's uptick lagged other benchmarks was that Dow component Boeing (BA 0.18%) suffered another setback that weighed on its shares. Meanwhile, Apple (AAPL -0.28%) continued moving higher, benefiting from favorable comments from analysts that pushed the company further into trillion-dollar territory.

More controversy for Boeing

Shares of Boeing sank 4% as the aerospace giant faced even more difficulties related to its 737 MAX aircraft. As criticism of the process that Boeing and regulators used to bring the MAX to market has increased, the company responded to comments that one of its former employees made regarding the aircraft.

One red Boeing aircraft on a ramp near three blue Boeing aircraft.

Image source: Boeing.

On Sunday, Boeing released a statement that referred to instant messages from technical pilot Mark Forkner describing his views on the performance of the 737 MAX. Those messages raised concerns that Boeing knew about issues as early as 2016, and the statement aimed to provide a complete context of the long process that the aerospace giant went through with the U.S. Federal Aviation Administration in determining pilot training requirements and developing the plane's systems.

Yet Wall Street analysts weren't satisfied with the response. Credit Suisse cut its rating on the stock from outperform to neutral and reduced its price target by $93 to $323 per share. UBS made a similar move, reducing its rating from buy to neutral and slashing $95 off its price target to $375 per share.

Six months ago, many had hoped that Boeing's MAX aircraft would be flying again by now. Instead, uncertainty shows no signs of going away, and investors are getting impatient as Boeing fights on multiple fronts.

Apple sees more green

However, analysts weren't naysaying every stock in the market. Shares of Apple moved higher by 1.5%, cementing its position as the largest tech company by market capitalization.

Analysts at Raymond James were the latest to talk up shares of the iPhone maker, keeping an outperform rating on the stock but boosting price targets by $30 to $280. Raymond James believes that the release of the iPhone 11 series of smartphones has gone better than many had predicted, with users finally showing that they're willing to upgrade on a periodic basis when attractive features become available.

Apple should also benefit from the upgrade in wireless networks to 5G technology. With old phones not fully supporting the faster speeds that 5G will offer, customers will have another reason to buy new iPhone models next year. Moreover, as the tech titan expands services offerings, the value of staying within the company's ecosystem should deter current Apple users from defecting to rival smartphone manufacturers.

Shareholders have already enjoyed Apple's recent ascent to regain the top spot in the U.S. stock market, and the holiday season should play a key role in determining the company's immediate future direction. Apple still faces the long-term challenge of maintaining its history of innovation, but for now, investors seem content to take advantage of its stability and shareholder-friendly capital decisions.

Dan Caplinger owns shares of Apple and Boeing. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool recommends Apple. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
AAPL
$174.07 (-0.28%) $0.48
The Boeing Company Stock Quote
The Boeing Company
BA
$167.51 (0.18%) $0.31
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$33,914.51 (-0.19%) $-65.81
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$4,269.75 (-0.10%) $-4.29
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
^IXIC
$12,923.70 (-0.11%) $-14.42

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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