The Dow Jones Industrial Average (DJINDICES:^DJI) shrugged off negative economic data from the Commerce Department and was trading 30 points higher, or 0.18%, by midafternoon. The department today issued its final estimate for first-quarter gross domestic product, which showed a 2.9% annualized contraction, compared to the previous 1% pullback reported last month.
Behind the downward revision was weaker spending on health care and figures that show trade was a bigger drag on the economy than initially thought. One reason the market is seemingly ignoring this ugly picture is that investors don't have a much better option. Buying equities still represents a better investment than cash or bonds, as long as the economy is expected to continue growing -- and all indications are that the economy will indeed grow in the second quarter.
With that in mind, here are some companies making major headlines in the markets today.
Inside the Dow, heavy-machinery manufacturer Caterpillar (NYSE:CAT) faces another potential financial blow with the potential demise of the Export-Import Bank. The story has been stirring up dust since House Majority Leader Eric Cantor's surprising defeat in his Republican primary. Without his support, the death of the Export-Import Bank inches nearer.
The Ex-Im Bank provides credit insurance, direct loans, and guarantees to assist foreign companies in purchasing American-made goods. Without that assistance and subsidies, Caterpillar stands to lose some export business to foreign manufacturers. Boeing and General Electric are also among the handful of industrial juggernauts that could feel the most impact if the Ex-Im Bank isn't reauthorized.
The Ex-Im Bank says it provided $27 billion to support an estimated $37.4 billion in U.S. export business last year alone. It also claims supporting that amount of export business helped sustain more than 200,000 U.S. jobs. While opponents are all but claiming victory for the Ex-Im Bank's future demise, investors in Caterpillar, Boeing, and General Electric would be wise to watch the Sept. 30 deadline for the bank's reauthorization.
Outside the Dow, Ford (NYSE:F) today unveiled its all-new Edge. The Edge will be sold in more than 100 markets across the globe and will again be built on the company's global midsize vehicle platform, hence its "crossover" designation.
That's more important than most Ford investors realize as the company continues to execute its "One Ford" plan to streamline operations and consolidate vehicle platforms. Keeping the Edge on the midsize vehicle platform, the same platform the Fusion is built on, should enable the crossover to be produced in additional factories around the globe -- despite Ford officials saying there are no current plans to build the Edge anywhere but Oakville, Ontario. However, as the automaker expects China to become the biggest crossover and SUV market in the world by 2018, and Ford already sells every single Edge it exports into China, producing the Edge abroad seems like an intriguing option down the road.
"For three years in a row, Ford has been the best-selling utility vehicle brand in North America and has been experiencing exponential growth in global markets," said Jim Farley, Ford group vice president, global marketing, sales and service and Lincoln, in a pres release. "The all-new Edge is the next chapter in this story. And it's a story driven by the emotional appeal of the vehicle – not its feature content."
Another key aspect for the all-new Edge is the addition of Ford's premium "Titanium" trim that commands a higher transaction price, and thus incremental additional top-line revenue, for the Dearborn automaker. Ford's second-generation design is expected to boost Edge sales, which were down 20% in May and 7% through the first five months of the year.