Stocks Rebound as Boeing and Airlines Post Strong Earnings

Strategic Insights -

The return in demand for air travel boosted earnings at aerospace and defense company Boeing, as well as airlines, leading to a rebound in US stocks after Tuesday's sell-off. The S&P 500 closed up 1.1%, the Dow Jones Industrial Average gained 1.2%, and the Nasdaq Composite was 0.8% higher. Boeing's commercial aeroplane division saw revenue soar, outweighing a dip in defense sales, while United Technologies benefited from increased sales in its aerospace division.

Key Takeaways:

  • Boeing's quarterly profit compared to a loss for the same period last year, with revenue from its commercial aeroplane division outweighing a dip in defense sales.
  • United Technologies beat analysts' expectations, raising its profit forecast for the current fiscal year, and its shares edged up 0.4% to $73.92.
  • Airlines saw earnings rise strongly as passengers returned, with the S&P 500 airlines index adding 3.4%, despite the recession.
  • Delta Air Lines joined Boeing in posting a profit, with higher international demand lifting sales, and its shares surged 10.9% to $12.97.
  • AMR, the parent company of American Airlines, also posted a profit, its first in seven quarters, and its shares climbed 12.6% to $7.34.
  • US Airways jumped 7.4% to $10.84 after posting record-beating profits, driven by fuller planes.
  • Financial stocks, which lagged the indices during most of the session, recovered by the closing bell, with the S&P 500 financials index advancing 1.1%.
  • Wells Fargo's record-beating earnings helped buoy the sector, with its shares gaining 4.3% to $25.60 after improving credit conditions.

Statistics:

  • S&P 500 closed up 1.1% to 1,178.17.
  • Dow Jones Industrial Average gained 1.2% to close at 11,107.97.
  • Nasdaq Composite was 0.8% higher to close at 2,457.39.
  • Boeing's shares jumped 3.4% to $71.36.
  • United Technologies' shares edged up 0.4% to $73.92.
  • Delta Air Lines' shares surged 10.9% to $12.97.
  • AMR's shares climbed 12.6% to $7.34.
  • US Airways' shares jumped 7.4% to $10.84.
  • Morgan Stanley reported a quarterly net loss of $91m, but its shares finished the session 0.4% lower at $25.38.
  • Bank of America's shares lost 0.4% to $11.75.
  • Wells Fargo's shares gained 4.3% to $25.60.

Sources:

  • Hannah Kuchler in New York, Wall Street Journal.
  • Boeing's quarterly earnings report.
  • United Technologies' quarterly earnings report.
  • Delta Air Lines' quarterly earnings report.
  • AMR's quarterly earnings report.
  • US Airways' quarterly earnings report.
  • Morgan Stanley's quarterly earnings report.
  • Bank of America's quarterly earnings report.
  • Wells Fargo's quarterly earnings report.
  • BlackRock's quarterly earnings report.