For Immediate Release
Chicago, IL – March 21, 2016 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Boeing Company (BA - Free Report) , Apple (AAPL), Chevron (CVX - Free Report) ,Intel Corp. (INTC - Free Report) and Alphabet Inc. ( (GOOGL - Free Report) .
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Here are highlights from Friday’s Analyst Blog:
Dow 30 Stock Roundup: Boeing's Huge Army Deal, Apple Going with Alphabet
The Dow gained during all four trading sessions of the week. The index increased slightly on Monday despite a decline in oil prices. On Tuesday, the index once again moved up only marginally following losses in healthcare and biotech stocks.
The index gained on Wednesday following Fed’s decision to keep interest rates unchanged and forecasting a lower number of rate hikes for the year. The index moved up 0.9% on Thursday following gains in industrials, materials and energy stocks. The Dow has gained 0.8% over the first four trading days of the week.
Last Week’s Performance
The index increased only 0.1% on Monday despite a decline in oil prices. Prices declined yesterday after the possibilities of a production freeze by major oil producing nations seemed less likely following discouraging comments from Iran’s Oil Minister Bijan Namdar Zanganeh. Meanwhile, Organization of the Petroleum Exporting Countries (OPEC) kept its yearly forecast on global crude demand and non-OPEC crude supply unchanged.
Shares of Boeing Company (BA - Free Report) increased 1.4% which in turn boosted the Dow. Boeing’s shares increased after an announcement that the aerospace company has changed its leadership.
Apple (AAPL) shares increased 2% yesterday after Morgan Stanley forecast the iPhone demand for the March quarter may come in at 56.5 million units, compared to current analyst expectations of 50 million units.
Meanwhile, retail sales fell 0.1% last month, in line with the consensus estimate. Also, January’s figure was revised downward to a 0.4% decline, in contrast to an earlier estimate of a rise by 0.2%. Additionally, PPI for finished goods decreased 0.2% in February, declining for the fifth time in the last seven months.
The index increased 0.4% on Wednesday following Fed’s decision to keep interest rates unchanged and forecasting a lower number of rate hikes for the year. The Federal Open Market Committee (FOMC) decided to keep interest flat between 0.25% and 0.50% and forecast that the number of rate hikes this year will be two instead of four as projected in its December meeting.
Moreover, oil prices rebounded yesterday following a lower-than-expected increase in stockpiles and encouraging comments from Qatar’s oil minister. Qatar’s oil minister Mohammed Bin Saleh Al-Sada said that the major oil producers will be meeting in Doha on Apr 17 to discuss the production freeze.
Additionally, the U.S. Energy Information Administration reported an increase of 1.3 million barrels in crude inventories to 523.2 million for the week ending March 11, lower than a 1.5 million barrel rise reported by the American Petroleum Institute (API). Chevron ( (CVX - Free Report) gained 1.2%.
Meanwhile, the CPI decreased 0.2% in February, in line with the consensus estimate. Housing starts increased 5.2% from January to a seasonally adjusted annual rate of 1,178,000 in February, a five-month high. Industrial production decreased 0.5% in February after gaining 0.8% in January.
The index moved up 0.9% on Thursday following gains in industrials, materials and energy stocks. FOMC’s statement weakened the dollar, which had a positive impact on commodity prices including oil prices. Meanwhile, rising possibility of a deal to freeze crude production continued to boost oil prices. The Dow posted gains for the fifth consecutive session and finished in the green for the first time in 2016.
WTI crude settled above $40 per barrel for the first time this year. Additionally, WTI closed at its highest level since Dec 3. Brent crude increased 2.9% to $41.54, finishing at its highest settlement since Dec 4. Chevron gained 1.6%.
Components Moving the Index
Boeing secured a major modification contract from the U.S. Army to revamp as well as deliver Chinook military airlift helicopters. The contract is worth $896.9 million.
Per the contract, Boeing will revamp 27 CH-47F Chinook military airlift helicopters and provide 12 new units. The work is slated for completion by Dec 20, 2020, and will be carried out at Ridley Township, PA.
The CH-47F/MH-47G modernization program is now in full-rate production, and will ensure this tandem rotor medium-lift helicopter remains in the Army at least through the 2030s.
Intel Corp. (INTC - Free Report) is looking to sell off $1 billion in assets that form a part of its venture capital unit, Intel Capital. The likely purchasers are secondary firms – private equity houses that specialize in purchasing portfolios.
According to a person familiar with the matter, Intel is working with UBS Group AG to explore sale opportunities across the world. The discussions are at an initial stage with Intel ready to sell assets as a whole or as parts divided by sector or geography, the person added.
Apple has reportedly made a deal with Alphabet Inc. (GOOGL - Free Report) under which Google’s cloud platform will power a certain portion of Apple’s iCloud infrastructure. The deal is said to have been signed last year.
According to a report from CRN, Apple will have to shell out $400 million to $600 million as charges for using Google’s cloud platform. However, the report did not state if the price range is a contract fee or an annual fee.
According to another report from Morgan Stanley last month, Apple spends around $1 billion for using Amazon Web Services and may reduce dependency on third party cloud computing platforms by shifting computing to its own data centers.
If the reports are true, then Apple has signaled a partial shift from Amazon Web Services, either in furtherance of a plan to reduce dependence on third parties, or diversify the third parties it uses to improve reliability of its service.
Next Week’s Outlook
With the Dow geared up for a fifth consecutive week of gains, the bull run in the markets looks set to continue. Moreover, stocks have continued to move upward despite the fluctuating fortunes of oil prices. However, it seems increasingly likely that an agreement on a production freeze will soon be reached. This should eliminate another concern which has been haunting investors for some time now.
Meanwhile, the ECB’s additional stimulus has provided stocks with additional impetus. The uneven quality of domestic economic data however remains a pressing concern. A few key economic reports are scheduled for release next week. This includes data on housing and durable orders. If these indicators deliver positive news ahead of the crucial GDP report, stocks are likely to complete yet another week of gains.
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