Yesterday, the Dow Jones Industrial Average
Heading into its earnings release early this morning, Boeing
On the other hand, Boeing still could suffer from delays in delivering its new 787 Dreamliner model, as well as defense-budget cuts. Air India, which ordered 27 Dreamliners from Boeing, will receive its first model this May after a three-year delay. As a result of that delay, Air India asked Boeing for $1 billion in compensation, with a later figure reported at $500 million, which a Boeing executive denied. Other airlines have followed Air India in asking for compensation, including United Continental
Building the recovery
Also reporting pre-market, Caterpillar
However, if analysts have overestimated the potential growth in China, the recovery stalls, or a fall in commodity prices lowers the demand for mining, Caterpillar's stock could lose its gains.
The Fed speaks
With the market interpreting any recent throat-clearing by a member of the Federal Reserve as gospel to future policy, the Fed's rate decision, due around noon today, will no doubt be overanalyzed. It's almost certain the Fed will stick with the current interest rate, but it may also use this announcement to prepare the market for any deviation from its previous rate forecasts that saw the current low rates continuing into 2014.
An indicator to watch
Data on durable-goods orders for March are also released today. Often analyzed as a gauge of manufacturing activity, this report measures the dollar volume of goods with a three-year or greater lifespan that have been ordered, shipped, or unfilled. The market expects a 1.7% drop, down from February's 2.4% gain. An even larger drop could spook the market, or an upside surprise could inspire more bulls to buy. So far, durable goods have been steadily improving since the recession:
Are you ready for the rest of earnings season?
Other Dow components reporting later this week are ExxonMobil, which reports tomorrow, and CVS, Merck, and Procter & Gamble, which all report on Friday.
Stocks can jump or fall on any tidbit of news, but over the long term it's the underlying business in which you invest and that drives solid long-term returns. Earnings reports are a great peek into how a business is performing, as well as how it might deliver over several years. To make the most of this round of earnings, check out our free report, "5 Stocks Investors Need to Watch This Earnings Season."
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