- Dow on the rise after last week’s dramatic drop
- Another Boeing crush in less than six months pulls its stocks down
- The economic slowdown may prevail
On Monday, stocks closed with strong gains experienced in tech dividends like Facebook and Apple offsetting a steep decline in Boeing.
The Dow ended with 200 points up after falling for more than 200 points last week. S&P 500 upped its gains by a margin of 1.47 percent, an increase of 2.17 percent in the tech sector. The Nasdaq gained 2 percent. The indexes offset a five-day downward spin.
Boeing Crush Pulls Down its Value
Boeing went down a spiraling 5.3 percent after their plane 737 MAX 8 jet crashed on Sunday. This comes after another of their planes crashed in less than six months. This decline shaved off close to 150 points from the Dow given its nature in the price-weighted stock’s elevated price compared to a range of other Dow components.
This, however, comes in the wake of Apple’s shares which surged 3.47 percent putting-off some of Boeing’s losses. Notably, Bank of America, and Merrill Lynch upped Apple’s stock to trade from neutral. The Bank also noted the company’s woes as “opportunity” raising its 12-month price range to $210 up from $180.
On the other hand, Facebook made gains of 1.47 percent after Nomura Instinet upped it to purchase it from neutral. Analyst Mark Kelley, in a note to clients, noted that customers were focusing on messaging and Facebook’s stories format. Kelley also increased his price target to $215 per share up from $172.
A boost was also imminent from the tech giants after Nvidia made announcements about buying Mellanox Technologies for $6.8 billion. Nvidia made gains of up to 6.97 percent whereas Mellanox made an overflow of 7.78 percent.
The Economic Slow-Down
These moves experienced on Monday came after big indexes posted their worst performances these past few days of 2019 which are amid the growing concern of a slowdown economically around the world.
Bruce Bittles, the chief investment strategist at Baird, had this to say:
“The most recent economic data fits with our 2019 outlook that suggests economic growth is likely to slow this year, but recession prospects remain very low,” he intones that “This reinforces the view that the Federal Reserve will continue with patience with regards to any future rate hikes until such time that underlying economic fundamentals show significant improvement.”
“As a result, the current weakness in the equity markets should be viewed within the confines of a consolidation phase.”
Friday data showed 20,000 jobs were added to the worlds’ largest economies against an expected 180,000 – marking the weakest month as far as job creation is concerned since September 2017.