Please ensure Javascript is enabled for purposes of website accessibility

Dow Jones Gains 187 Points on Walmart Healthcare Deal, Boeing Mega-Order

By Jason Hall - Jun 30, 2021 at 3:33PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Walmart's latest pharmaceutical deal and Boeing's biggest new 737 MAX customer have the Dow moving higher on the last day of June.

The Dow Jones Industrial Average (^DJI 0.45%) is up 187.6 points as of 2:33 p.m. EDT on June 30, to close out the first half of 2021 ahead of other indices. Today's gains are being led by Walmart (WMT 0.29%), up 2.7% on news of its insulin deal with Novo Nordisk (NVO -1.05%), and Boeing Co (BA 0.28%), up 2.1% after yesterday's mega-deal with United Airlines Holdings (NYSE:UAL ). Twenty-three of the 30 stocks in the index are on track to end the day higher. However, Intel (INTC 0.64%) is heading toward a loss of 2% on news that it is delaying production of its newest server processors. 

Walmart enters $10 billion insulin market

Woman holding insulin pen faces healthcare provider.

Image source: Getty Images.

Leading the Dow higher today are shares of mega-retailer Walmart, which announced on June 29 it had partnered with Novo Nordisk to offer a Walmart-branded insulin and injection device under the ReliOn brand name. The company is flexing its scale to offer this product at a significant discount. It will price insulin at $72.88 per vial and its FlexPen injector at $85.88, a discount it claims is between 58% and 75% lower than the cash price of competing insulin products currently available. 

Diabetes is an expensive health condition to manage. According to the CEO of the American Diabetes Association, quoted in Walmart's press release, medical care related to diabetes costs an estimated $7,000 per year on average. Despite the cost, managing diabetes is a growing business. With its massive retail footprint and changing demographics leading to an increase in the number of Americans with diabetes, Walmart's scale could play a crucial role in helping it win significant market share.

Investors certainly seem to think that's the case, sending shares higher today. 

WMT Chart

WMT data by YCharts

Boeing's big United deal driving stock higher

After steadily shrinking over the past year, orders of Boeing's 737 MAX aircraft have finally started to grow again. And you can now add United Airlines to the list of air lines signing big orders for the aircraft. According to the deal, United accelerated delivery for dozens of orders already in place and ordered another 200 737 MAX for future delivery

While the announcement came out on June 29, it's been expected for quite some time, and Boeing stock actually fell yesterday. News about the Delta variant of the novel coronavirus and the potential return to lockdowns in response to a surge in cases may have overshadowed confirmation of United's big order. Investors likely sold in fear that a return to lockdowns could undo the recovery in air travel. 

What's still unclear is how much economic value this deal will deliver for Boeing. Adding hundreds of new orders to its backlog is great news for the company, but it is likely that United is receiving a significant discount with this large order. 

Intel's turnaround hits a snag

Intel's stock is on track to fall close to 2% today after a company blog post disclosed that it was delaying production of its Sapphire Rapids server chips to 2022. Sapphire Rapids had been expected to start rolling out of Intel's manufacturing facilities later this year. 

This is the first big setback for the semiconductor giant since Pat Gelsinger took the reins as CEO in February. Gelsinger has announced an aggressive plan to turn the company around by expanding its global manufacturing footprint, shifting away from its proprietary focus, and becoming more closely aligned with companies looking to design their own chips. 

Intel's delay in producing its 7-nanometer microprocessors has put the company at a serious performance disadvantage in relation to some of its peers. Though not as publicized, this latest delay impacts the company's hugely important -- and hugely profitable -- server business. While Gelsinger may have some great plans to turn Intel around, the hard part -- actually executing on those plans -- has only just begun. 

 

Jason Hall has no position in any of the stocks mentioned. The Motley Fool recommends Intel and Novo Nordisk and recommends the following options: long January 2023 $57.50 calls on Intel and short January 2023 $57.50 puts on Intel. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Intel Corporation Stock Quote
Intel Corporation
INTC
$36.34 (0.64%) $0.23
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$33,912.44 (0.45%) $151.39
The Boeing Company Stock Quote
The Boeing Company
BA
$170.47 (0.28%) $0.48
Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
WMT
$132.60 (0.29%) $0.38
Novo Nordisk A/S Stock Quote
Novo Nordisk A/S
NVO
$106.37 (-1.05%) $-1.13

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

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/15/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.