Stock markets appeared to catch a second wind last week -- or at least catch a break -- with the S&P 500 putting together a modest three-day rally in stock prices. But after yesterday's return to the red, and today's even deeper declines, it appears we're to have no such luck this week.
Industrial stocks are getting hit particularly hard, with shares of aerospace companies General Electric (NYSE:GE) and Boeing (NYSE:BA), and wood-alternative manufacturer Trex (NYSE:TREX) all losing more than 10% of their share price in early trading. As of 1:45 p.m. EDT, they seem to be recovering a bit of their losses, but GE shares are still down 9.3%, Trex is down 10.4%, and Boeing is still down 11.2%.
First, the good news: A review of our news feeds reveals no bad news directly affecting any of these three companies. GE, Boeing, and Trex didn't report poor earnings today -- nor did they warn of poor earnings to come. None of the three has been hit with an analyst downgrade, or even seen its price target cut.
To the contrary, there's actually some good news to report about two of these three companies. Yesterday marked the end of the Pentagon's fiscal quarter, and as we've come to expect at such times of year, the Department of Defense has been in a rush to shoo large-dollar contracts out the door before the close of its quarter. On Monday, for example, Boeing was awarded a huge $1.55 billion contract to produce 18 P-8A Poseidon maritime surveillance aircraft for the U.S. Navy and for the militaries of South Korea and New Zealand (and a smaller $114 million award for work on U.S. Army helicopters as well). Tuesday saw Boeing win yet another award, worth $39 million, for work on KC-135 refueling tankers.
On Monday, GE, too, won some Pentagon cash: $215 million to manufacture 48 F414-GE-400 engines to power Navy F/A-19 fighter jets.
Granted, Trex stock isn't one you'd ordinarily to expect to win a lot of Pentagon money -- and it didn't. Still, the fact that two of the three industrial stocks named above are sinking today despite seeing mostly good news this week suggests that today's sell-off has more to do with generalized investor nervousness about the effects of the coronavirus, than about any specific weakness in the stocks themselves.