Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
Yesterday the stock market saw good news from China's economy and hopes that the Syrian crisis would resolve itself quickly as reason for a nearly 1% gain. This morning, the news is much the same, as a potential diplomatic resolution to the Syrian chemical-weapons situation gained broad-based support in the international community. Moreover, China reported double-digit percentage gains in industrial production and retail sales, adding on to yesterday's favorable export-related news that has investors looking much more closely at emerging markets than they have in months. As of 10:45 a.m. EDT, the Dow Jones Industrials (DJINDICES:^DJI) are up 112 points, or 0.75%, with broader markets posting similar percentage gains.
Also getting a huge amount of attention is news that the Dow will replace three of its constituents with new members. That news could be part of the reason Hewlett-Packard (NYSE:HPQ) is lagging the market today: Bullish investors may have taken the company's ouster as a vote of no confidence in the company's turnaround plans. Shareholders should take some solace, however, in the fact that several past Dow rejects have gone on to even greater success outside the average.
But the weakest performers in the Dow are energy stocks ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX), both of which are down about half a percent. In response to the prospect of military action in Syria, oil prices had risen past $110 per barrel in anticipation of possible production-curtailment from the Middle East. As alternatives to a Syrian strike have emerged, oil has given up some of its gains, with crude down almost $2.50 today alone. In the long run, though, a Chinese economic recovery could spur enough extra demand to make up for the loss of the geopolitical-tension premium, making today's pullback a possible buying opportunity for energy investors.
Finally, General Electric (NYSE:GE) has posted the biggest gain in the Dow this morning, climbing 2.1%. In addition to benefiting from better global growth prospects, GE will anxiously await key tests of the LEAP engine to see how its use of additive-manufacturing techniques will perform. With the company having used 3-D printing to produce fuel nozzles for the engine, the tests involving aircraft such as the Airbus A320neo and Boeing's 737 MAX could signal a huge transformation in GE's manufacturing process going forward.
Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Chevron. The Motley Fool owns shares of General Electric. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.