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These 2 Comeback Stocks Fired Up the Stock Market Wednesday

By Dan Caplinger - Mar 10, 2021 at 4:56PM

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They're not the growth stocks you're used to seeing.

The stock market had another solid day on Wednesday, with the Dow Jones Industrial Average (DJINDICES: ^DJI) setting a new record high. The Nasdaq Composite (NASDAQINDEX: ^IXIC) was once again a laggard, actually inching lower, but the broad market as represented by the S&P 500 (^GSPC 1.05%) enjoyed gains. Market participants were pleased with relatively benign inflation data and the passage of the stimulus bill to put $1,400 checks in the hands of tens of millions of Americans.

Index

Percentage Change

Point Change

Dow

+1.46%

+464

S&P 500

+0.60%

+23

Nasdaq Composite

(0.04%)

(5)

Data source: Yahoo! Finance.

2020 might have been the year of the tech stock, but 2021 is shaping up to be the year of beaten-down industrial stalwarts bouncing back and proving their mettle. On Wednesday, both aerospace giant Boeing (BA 2.28%) and oil refining company Valero Energy (VLO 1.60%) were among the best performers as each aims to execute its own comeback.

Flying higher

Shares of Boeing were up more than 6% on Wednesday. The aircraft manufacturer moved higher on multiple signs that the aerospace industry is starting to recover.

From a fundamental standpoint, Boeing has been getting some long-awaited orders for some of its most important aircraft models. For the month of February, Boeing finally got more new orders for aircraft than it had cancellations of existing orders. Moreover, some of those orders were for the 737 MAX, which was grounded for the better part of two years before getting cleared to fly in late 2020.

Boeing 737 MAX in the air above some clouds.

Image source: Boeing.

Boeing also moved higher on news that General Electric (GE -0.20%) had inked a deal with AerCap Holdings (AER 0.71%) to merge their aircraft-leasing finance units. Some believe that the merger could signal the belief by AerCap that airline activity is poised to soar in the coming months, and that could in turn help support Boeing's manufacturing pipeline as well.

Boeing's stock has now almost tripled from its March 2020 lows, but it's still down by nearly half from its highest levels in early 2019. That leaves plenty of room for further gains if the aerospace industry really starts to take off.

Gathering energy

Elsewhere, shares of Valero Energy were also up more than 6%. The energy industry has done extremely well so far in 2021, and refiners are starting to participate in the rally that exploration and production (E&P) companies have enjoyed for several weeks now.

Oil prices have seen a big boost and have maintained their upward momentum. Prices for West Texas Intermediate were up more than 1%, flirting with $65 per barrel. That's a level at which many E&P players in the industry are able to produce oil and natural gas profitably.

For Valero, though, oil is an input material rather than an output product, so what's important is whether the prices of refined products like gasoline and diesel fuel are keeping up with crude. That's definitely been the case recently. Gasoline prices were up a nickel per gallon just last week, and they're up by nearly $0.40 per gallon compared to this time last year.

Valero is well positioned to take advantage of rising demand for refined products as the economy recovers. With no current plans to shutter or permanently close any of its major facilities, Valero could provide valuable capacity in the event that demand starts to outstrip current supply.

A healthier market

For a long time, tech stocks have been the big gainers in the stock market, while other stocks largely got left behind. To see some longtime laggards like Valero and Boeing finally start to pull their own weight is a sign that the bull market is getting stronger.

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Stocks Mentioned

The Boeing Company Stock Quote
The Boeing Company
BA
$139.84 (2.28%) $3.12
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$3,825.33 (1.05%) $39.95
General Electric Company Stock Quote
General Electric Company
GE
$63.54 (-0.20%) $0.13
Valero Energy Corporation Stock Quote
Valero Energy Corporation
VLO
$107.98 (1.60%) $1.70
AerCap Holdings N.V. Stock Quote
AerCap Holdings N.V.
AER
$41.23 (0.71%) $0.29

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

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