The horrific bombing yesterday in Boston shocked people nationwide and sent investors from the market as they tried to figure out what happened and whether there was more in store for us. The Dow Jones Industrial Average (^DJI 0.03%) fell further through the end of trading after fighting all day with losses spurned on by poor economic data. The index ended the day down 265 points.
This morning, the Dow is making some progress to regain its momentum, with an 86-point gain as of 11 a.m. EDT. The morning has been filled with positive news on the economic front, as well as some big wins in company earnings -- all bolstering the index as it tried to climb back toward 15,000.
Housing starts jumped 7% in March as demand for multifamily projects dramatically increased. The forecast had been a rate of 930,000 new starts, but the number rose to 968,000 -- the highest level since June 2008. Fewer starts for single-family homes in March shows that that segment of the housing market is stalling, but the demand from renters for apartments has kept the housing market's rebound moving. Fewer permits were issued, signaling a slowdown of future construction, which matches the recent homebuilders survey that showed confidence in the current economic environment was down.
Consumer prices on many products considered staples were down last month. Food prices remained unchanged, but gas prices fell 4.4% after rising 9.1% in February. The drop in gas prices largely contributed to the 0.2% drop in overall prices in March. Economists believe that the trend of declining prices may continue into the summer.
Earnings season is in full swing
Coca-Cola (KO 1.63%) is up 5.1% after announcing earnings this morning. The beverage behemoth reported analyst-estimate-beating earnings after the company saw increased volumes in major markets like the U.S., Germany, and Japan. The company also announced that it will be selling some of its bottling operations to five smaller independent bottlers in order to streamline operations and "embrace expanded territories." Though Coke did not disclose the terms of the deal it would be making with the bottlers, it did mention an assortment of options including an outright territory sale, territory swaps, or an ongoing arrangement in which the bottler would make payment for the exclusive rights to the territory.
Johnson & Johnson (JNJ 1.75%) is also up in trading this morning after its earnings beat analyst estimates. The good news was a surprise to analysts and investors alike, who have driven the stock 1.84% higher so far in trading. J&J reported increased demand for its specialty and OTC drugs, as well as higher sales for consumer products. Revenues grew by 8.5% year over year, propped up by 2.2% growth in consumer products like Tylenol and Listerine, as well as baby products.
Bank of America (BAC -1.71%) hasn't even announced its earnings yet (it will tomorrow morning), but the bank is seeing positive signs this morning, with a 1.88% gain. Following the great earnings report yesterday from Citigroup (C -0.06%), bank investors are looking to B of A to continue the trend. Both banks had the most work to do following the financial crisis, and Citi proved in its earnings for the past quarter that it's made solid progress toward being at full strength. Though most people still associate Bank of America with its legal troubles and the results of the financial crisis, it too has made serious changes that have helped clean its books, strengthen its capital position, and improve its customer relationships. Keep an eye out tomorrow morning for its earnings report -- you might see the stock jump!