Morning Dow Report: Visa, Boeing Support Stocks As Inflation Falls

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.

This morning, the Dow Jones Industrials (DJINDICES:^DJI) did their best to end a three-day streak of declines, rising 16 points as of 11 a.m. EST. On the economic data front, a drop of 0.1% in the Producer Price Index for November should give the Federal Reserve ample latitude to take whatever stimulus policy measures it chooses next week, and investors so far seem content to wait before taking decisive action in either direction today. Visa (NYSE:V) and Boeing (NYSE:BA) provided the biggest boost to the Dow this morning in point terms and helping to offset weakness elsewhere.

The PPI report from the Bureau of Labor Statistics showed falling prices at every stage of production, with finished goods down 0.1%, intermediate goods dropping 0.5%, and crude goods sliding 2.6%. Energy was once again the main driver of falling prices, with crude energy prices falling 6.6% and leading to 1.5% drops in intermediate-stage energy prices and a 0.4% decline at the finished-goods level. Interestingly, those factors didn't seem to affect Dow energy giants ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX), which traded in opposite directions in modest moves today. Yet that likely reflects the fact that for Exxon and Chevron, keeping production levels stable and growing is at least as important as a healthy price environment, as the Big Oil companies face the huge challenge of offsetting dropping production from aging wells in existing oil fields.

Falling prices appear to be helping consumers, though, and that bodes well for Visa, given its reliance on consumer spending to drive its revenue. Visa hit all-time highs on Wednesday as rival MasterCard took positive action for its shareholders, boosting dividends, announcing a buyback, and splitting its stock 10-for-1. With so much of the world just now moving toward electronic-based payment systems, the potential for both companies to carve up the emerging world could sustain growth for years to come.

The increase in Boeing's stock price is surprising given the labor disputes that the aircraft manufacturer is facing. Boeing's machinists union in Washington state this week rejected another contract offer from the company, leading Boeing to reiterate its ongoing process to seek alternative sites for its key 777X aircrat production. Yet investors remain focused on Boeing's huge potential, with possibly trillions of dollars in orders over the next 20 years setting the stage for long-term success from the aerospace giant if it can handle its ongoing execution challenges.