Please ensure Javascript is enabled for purposes of website accessibility

Factory Orders Rise, but That Doesn't Help Caterpillar

By Matt Thalman - Apr 2, 2013 at 1:03PM

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

Most of the Dow's components rise after the Department of Commerce released February's factory orders -- but not all.

The Department of Commerce released data on U.S. factory orders in February this morning, and the results were better than expected. Economists were expecting a 2.9% rise for the month, but the actual reading was a 3% gain in bookings. Orders in the aircraft and automobile industries greatly improved in February, while demand for primary metals and electronic equipment like appliances also rose.

The positive report was enough to push the markets higher this morning, and as of 12:45 p.m. EDT the Dow Jones Industrial Average (^DJI -0.15%) is up 97 points, or 0.67%. The S&P 500 is also up 0.67%, while the NASDAQ outpaces the others, climbing 0.8%.

A few Dow losers
Although the Department of Commerce's data showed that durable-goods orders rose 5.6% in February, orders of core capital goods, which include machinery and equipment, fell by 3.2%. With that news, shareholders began selling Caterpillar (CAT 1.26%) this morning, and the company is down 0.8% at the time of writing. We already knew Caterpillar has been struggling to move equipment based on its monthly sales report, so the news today should not be a shocker.

Hewlett-Packard (HPQ 2.29%) is finally reverting to its 2012 trend, which made it the Dow's worst-performing stock on a daily basis. Shares of HP are currently down an astonishing 6.2% after an analyst at Goldman Sachs downgraded the stock. Bill Shope, the analyst, said shares could fall 31% from yesterday's closing price and "sentiment has moved ahead of reality." Shope also said he thinks any gains netted by restructuring will be wiped out by the continued weakness in PCs, enterprise hardware, services, and printing during 2013.

Although the Department of Commerce's factory order report indicated that demand for commercial aircraft rose 95.1% in February, shares of Boeing (BA 0.94%) are trading lower today. The large percentage jump owed mostly to one order for 179 planes, and shareholders had already known about this sale. So today's decline is likely due to the company's continued issues with its 787 Dreamliner, and although Boeing performed a test flight yesterday afternoon, a delayed test flight on Saturday doesn't help get the aircraft off the FAA's grounded list.

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

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$31,880.19 (-0.15%) $-48.43
The Boeing Company Stock Quote
The Boeing Company
BA
$120.52 (0.94%) $1.12
HP Inc. Stock Quote
HP Inc.
HPQ
$35.56 (2.29%) $0.80
Caterpillar Inc. Stock Quote
Caterpillar Inc.
CAT
$208.25 (1.26%) $2.60

*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 service.

Stock Advisor Returns
322%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/25/2022.

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.