The stock market didn't know what to make of the massive $2 trillion stimulus bill expected to be voted on in the U.S. Senate on Wednesday. The bill weighs in at $2 trillion, providing direct cash payments to Americans, aid to large and small businesses, and other provisions meant to get the country through the novel coronavirus pandemic.
By 10:50 a.m. EDT, the Dow Jones Industrial Average (^DJI 0.69%) was up about 1.5%. Volatility hasn't gone away: The Dow surged at market open, then dropped into negative territory before staging a recovery.
While the Dow struggled to find direction, shares of Nike (NKE -0.18%) and Boeing (BA -0.76%) were soaring. Nike stock was up after a solid quarterly report and optimistic talk from management, and Boeing stock jumped due to the Senate bill and a report that production of the 737 Max could restart in May.
Image source: Nike.
Nike reports strong results
Footwear and apparel giant Nike put up some impressive numbers for its fiscal third quarter, despite major headwinds from the novel coronavirus outbreak in China. Nike's quarter ended on Feb. 29, when there were fewer than 100 confirmed cases in the United States. Since then, U.S. cities and states have taken drastic steps that have likely reduced demand for Nike's products.
Nike reported third-quarter revenue of $10.1 billion, up 5% year over year and $530 million higher than the average analyst estimate. Adjusted earnings per share, which exclude a one-time charge related to a business model change in South Korea, came in at $0.78, beating analyst expectations by $0.22.
Sales were up in all regions except China in the third quarter. North America sales rose 4%; Europe, Middle East, and Africa sales jumped 11%; and Asia Pacific and Latin America sales were up 8%. In China, total sales slumped 5%.
The online channel was a bright spot, with total digital sales soaring 36% year over year. In China, digital sales soared more than 30% while many of the company's stores were closed because of the outbreak.
Nike didn't provide any guidance due to the uncertainty surrounding the pandemic. However, the company is confident in a quick recovery. "But our confidence in the return to growth is founded on the relatively rapid recovery and early signs of normalization we are already seeing in China, Korea, and Japan," said CFO Andy Campion during the earnings call.
Nike stock was up about 10% Wednesday morning. Shares are now down roughly 25% from their 52-week high.
Boeing rockets higher after Senate reaches deal
Shares of troubled airplane manufacturer Boeing moved higher on Wednesday after the U.S. Senate reached a deal on a massive $2 trillion stimulus bill. Along with direct payments to many Americans, the bill sets aside billions of dollars in aid to various industries, including the airline industry.
Keeping Boeing's customers in business as demand for air travel essentially disappears should help quicken the recovery once the crisis passes. The Senate is expected to vote on the spending bill sometime Wednesday.
There was another piece of positive Boeing news: Reuters reported the company is planning on restarting production of its grounded 737 Max plane by May. That timeline depends on a lot of things going right. The novel coronavirus pandemic will need to be largely under control by then, and U.S. regulators will need to clear the plane for service. One of Reuters' sources said the original plan was to restart production in April, but that the pandemic had pushed expectations back to May.
Boeing stock had gained 20% Wednesday morning, continuing its recent rally from a multiyear low. Shares remain down 62% from the 52-week high.
