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.
Earnings season for the Dow Jones Industrials (DJINDICES:^DJI) is in full swing, and volatility levels are picking up as investors try to figure out the impact of the latest reports from major Dow components -- not just in the short run but throughout 2014 and beyond. The Dow initially climbed at the open, but quickly turned downward, falling 41 points as of 11 a.m. EST. Yet despite all the attention given to the companies that reported this morning, other companies are making news, including General Electric (NYSE:GE).
GE fell 1.4% after announcing a deal yesterday to acquire a key energy business from oil-services peer Cameron International (UNKNOWN:CAM.DL). The move involves GE buying Cameron's reciprocating compression division, a unit assists the processing, transmission, and storage of natural gas. Given the efforts that General Electric has made to become more involved in the energy industry, the $550 million purchase makes a lot of sense and adds to GE's ability to serve oil and gas exploration and production customers in its newly created downstream segment.
Boeing (NYSE:BA), on the other hand, gained 1.5% after General Electric's capital aviation services division announced an order for 40 of the aircraft manufacturer's 737 model. With half of the $3.9 billion order slated for 737 MAX 8 airplanes and the other half representing orders for next-generation 737-800 models, GE cited demand among its customers for more fuel-efficient aircraft. Boeing is positioned to keep profiting from that trend going forward, especially if energy prices remain high.
Finally, Caterpillar (NYSE:CAT) fell more than 1%. News yesterday showed that economic growth in China fell slightly, leading to more concerns about the emerging market's ability to sustain its long expansion. With Caterpillar relying on China as a key component of its overall growth strategy, bad news there could further weigh on investor sentiment for the construction-equipment giant, just as an upturn in U.S. economic growth had started to pull the stock higher.