The Chicago Purchasing Managers Index jumped much higher than analysts expected, from 55.7 last month to 65.9 in October. A figure of 50 or more is considered a positive reading, so the improvement is a good sign, as it's a snapshot of how manufacturing and corresponding businesses are performing. Despite the good news, the Dow Jones Industrial Average (^DJI 1.05%) is trading flat as of 2:45 p.m. EDT. With that in mind, here are some of the market's movers and shakers today.
Boeing (BA 0.96%) is the Dow's second biggest winner today, up 1.4%. Boeing is now the Dow's fourth-largest-weighted component, and it continues to help the Dow higher while soaring more than 80% in the last 12 months.
Boeing announced today that it will increase production of its 737 program, which accounts for the majority of its commercial aircraft deliveries. The aerospace behemoth presently builds 38 737s per month; it will bump that up to 42 in the first half of 2014 before reaching its goal of 47 per month by 2017.
That's the highest rate ever for the best-selling airliner in history and would enable Boeing to roll out more than 560 aircraft per year -- an almost 50% increase since 2010. This should enable Boeing to improve its profitability on the 737 family and cash in faster on its 3,400 unfilled orders.
Caterpillar machinery. Photo Credit: Caterpillar.
While Boeing has been soaring, the world's largest mining-equipment manufacturer, Caterpillar (CAT 1.29%), has only been digging itself a deeper hole.
Brian Langenberg, the principal at the Langenberg research firm, didn't pull any punches when summarizing earnings. "The third quarter was hideous, the fourth quarter will stink and the guidance for 2014 is very, very subdued," he said in a Reuters report.
Langenberg is right. In the spirit of Halloween, Caterpillar's third quarter was downright scary, and it's tough to find a silver lining in the company's report. However, I was able to dig up a little something positive for Caterpillar investors.
While the company's business sales look dismal, down $11 billion from last year, and earnings plunged 44%, it was able to return some value to shareholders through dividend increases and share buybacks. Caterpillar increased its dividend by 15% in the second quarter and repurchased $2 billion of common stock through the first three quarters of 2013.
Outside the Dow, eyes are turning to Toyota (TM 0.40%) in the automotive industry. Ford (NYSE: F) and General Motors (NYSE: GM) have recently posted strong third-quarter results, and Toyota is looking to follow the same trend.
Toyota managed to outsell General Motors globally -- along with everyone else, for that matter -- for the second time in three quarters this year. Toyota and its subsidiaries sold 2.5 million vehicles in the third quarter -- a decent 2.8% increase from last year, according to the automaker. Through the first nine months of the year, that puts Toyota a hair ahead of General Motors with 7.41 million vehicles sold versus GM's 7.25 million. Volkswagen checked in at 7.03 million, according to Automotive News.
While full-size pickups drive the majority of profits for Ford and General Motors through their bigger margins and higher transaction prices, Toyota doesn't have a strong presence in that segment. Instead, Toyota will rely on a weak yen to bring in stronger profits. Toyota reports earnings on Monday, and investors will have a better idea how the yen falling 11% against the dollar in 2013 will impact results -- it could be a big development moving forward.
