Dow 30 Stock Roundup: Boeing's $6.5B Air Force Contract, Pfizer To Buy Array BioPharma
Zacks Investment Research | Jun 20, 2019 09:40PM ET
The index enjoyed another week of strong gains after the Federal Reserve indicated that a rate cut would likely occur next month. Hopes of a reduction in U.S.-China trade tensions also boosted stocks during the week. Oil stocks increased as chances of a U.S-Iran conflict increased. However, this factor also served to somewhat curb gains for market participants.
Last Week’s Performance
The index lost 0.1% last Friday following the weak performance of tech stocks on trade concerns. Moreover, China reported weak economic data for May, disappointing investors. China’s value-added industrial output rose 5.0% in May compared with 5.4% in April. This was the lowest growth rate in 17 years.
The index has gained 0.4% over last week. The market remained volatile as some economic data were tepid while some were rosy. Moreover, trade conflict with China continued with no signs of improvement. However, investors are expecting a rate cut or at least an indication that a rate cut will take place next month from the Fed.
The Dow This Week
The index gained 0.1% on Monday buoyed by the strong performance of technology stocks. However, trading volumes remained low as investors waited for the outcome of the crucial 2-day meeting of the Fed. The National Association of Home Builders’ index for the month of June declined 2 points to 64 from the previous month.
The index soared 1.4% on Tuesday after President Trump’s said he will meet his Chinese counterpart during the G-20 summit, which boosted investors’ confidence. Moreover, market participants were also expecting the Fed to indicate that a rate cut would take place next month.
The index increased 0.2% on Wednesday after the Fed kept the federal fund target rate unchanged while clearly indicating that the central bank might cut rates at least once in this year. The European Central Bank (ECB) strongly indicated that a near-term rate cut was likely a day earlier. Signs that two major central banks would pursue accommodative policies boosted investors’ confidence in equities.
The index gained 0.9% on Thursday as investors continued to be enthused by the prospect of a Fed rate cut next month. Shares of Exxon Mobil (NYSE:XOM) and Chevron Corporation (NYSE:CVX) gained 1.7% and 1.1%, respectively, after oil prices spiked on prospects of conflict between the United States and Iran.
Components Moving the Index
The Boeing Company’s (NYSE:BA) Defense Space and Security segment recently won a modification contract for providing Joint Direct Attack Munition (JDAM) tail kits, spares, repairs and technical services. The deal has been awarded by the Air Force Life Cycle Management Center, Hill Air Force Base, UT. Boeing has a Zacks Rank #3 (Hold).
The latest modification will extend the original contract for an additional five years. It also increased the contract ceiling by $6.5 billion to $10 billion. The deal also involves foreign military sales. Work related to the deal will be performed in St. Louis, MO, and is scheduled to be completed by Feb 28, 2025. (Read: Original post
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