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Dow 30 Stock Roundup: Boeing, Caterpillar, Johnson & Johnson, DuPont Beat on Earnings

The Dow gained over the week following continuing optimism over Trump's first actions as President and encouraging earnings results. Trump's executive orders cleared the way for the completion of the Dakota Access and Keystone XL oil pipelines. Additionally, Trump signed executive orders to improve border security and control immigration. Several Dow components issued encouraging earnings results, helping the index cross the landmark level of 20,000.

Last Week's Performance

The Dow increased 0.5% last Friday after Donald Trump was sworn in as the new U.S. President and gave a protectionist speech, which in turn had a broad-based positive impact on U.S. benchmarks. In his speech, Trump focused on America's prosperity and strength and pledged to make "America great again."

All three key indexes rallied with the Dow snapping a five-session losing stretch. Additionally, The Procter & Gamble Company's PG shares climbed 3.3% after its fiscal second-quarter earnings and revenues exceeded expectations.

The index declined 0.3% over last week as investors looked for clues on ways Trump could boost the economy. Also, comments from the President-elect weighed on the U.S. dollar, which eventually dragged markets down over the week. Also, U.K. Prime Minister Theresa May's speech regarding Brexit and ECB's decision to keep key rates unchanged pulled benchmarks southward.

The DowThisWeek

The index declined 0.1% on Monday following rising uncertainties regarding Trump's economic policies. However, benchmarks pared some of yesterday's losses after the President announced to reduce financial regulations and corporate taxes. Separately, record rise in U.S. rig counts weighed on oil prices , which in turn dragged energy stocks.

Additionally, investors swallowed mixed bag of earnings results. Shares of McDonald's Corporation MCD fell 0.7% after its same-stores sales in the U.S. decreased 1.3% during last quarter. However, the company reported encouraging quarterly results.

The index increased 0.6% on Tuesday following Trump's decision to sign two separate executive orders for Energy Transfer Partners, L.P. ETP and TransCanada Corporation TRP . This would help Energy Transfer Partners to complete construction of Dakota Access oil pipeline and TransCanada to build the Keystone XL oil pipeline. Trump's decision to revive pipeline projects had a positive impact on materials and industrials sectors.

Moreover, E. I. du Pont de Nemours and Company's DD shares rose 4.5% after the company continued its positive earnings surprise streak with a solid beat in fourth-quarter. In other earnings news, Johnson & Johnson JNJ reported a mixed fourth quarter, with earnings beating expectations while sales missing the same.

The index increased 0.8% on Wednesday following strong earnings results and optimism over Trump's growth-focused actions. The Boeing Company BA reported better-than-expected quarterly results which in turn boosted indexes northward. All the key U.S. indexes closed at new record levels with the Dow finishing above the psychological level of 20,000 for the first time. The blue-chip index took 42 sessions to finish above 20,000, registering its second best one-thousand point gain since 1999.

The index increased 0.2% on Thursday following continued optimism over Trump's growth-focused actions and new set of earnings results. Strong gains in financials, industrials and materials led the Dow to reach at all-time record high level for the second consecutive session.

ComponentsMovingthe Index

3M CompanyMMM reported relatively healthy fourth-quarter 2016 results with GAAP earnings of $1,155 million or $1.88 per share compared with $1,038 million or $1.66 per share in the year-earlier quarter. The reported earnings exceeded the Zacks Consensus Estimate by a penny. Net sales during the quarter were $7,329 million, missing the Zacks Consensus Estimate of $7,368 million. (Read: 3M (MMM) Marginally Beats Q4 Earnings, Affirms 2017 View )

Boeing reported adjusted earnings of $2.47 per share for fourth-quarter 2016, beating the Zacks Consensus Estimate of $2.34 by 5.6%. The Zacks Rank #3 rated stock's revenues amounted to $23.29 billion in the reported quarter, missing the Zacks Consensus Estimate of $23.44 billion by 0.6%. (Read: Boeing (BA) Beats on Q4 Earnings, Provides 2017 Outlook )

Caterpillar Inc. 's CAT fourth-quarter 2016 adjusted earnings of 83 cents per share beat the Zacks Consensus Estimate of 65 cents but remained flat year over year. The Zacks Rank #3 rated stock's revenues dipped 13% year over year to $9.57 billion in the quarter, falling short of the Zacks Consensus Estimate of $9.76 billion. (Read: Caterpillar (CAT) Earnings Beat and Revenues Miss in Q4 )

DuPont recorded adjusted earnings of 51 cents per share in fourth-quarter 2016, up 89% from 27 cents per share a year ago. The results topped the Zacks Consensus Estimate of 42 cents. Zacks Rank #3 rated DuPont raked in net sales of $5,211 million for the quarter, down roughly 2% year over year. That missed the Zacks Consensus Estimate of $5,246 million. (Read: DuPont's (DD) Q4 Earnings Trounce Estimates, Sales Fall Shy )

General Electric CompanyGE reported GAAP net earnings of $3,486 million or 39 cents a share for fourth-quarter 2016 compared with $6,283 million or 64 cents a share in the year-ago quarter. Operating earnings (including industrial and other verticals) for the reported quarter matched the Zacks Consensus Estimate.

Total consolidated revenue for the reported quarter decreased 2% year over year to $33,088 million and missed the Zacks Consensus Estimate of $34,150 million. The stock has a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

McDonald's fourth-quarter 2016 earnings per share of $1.44 surpassed the Zacks Consensus Estimate of $1.41 by 2.1% and improved 10% from the year-ago quarter. The Zacks Rank #3 rated stock's revenues of $6.03 billion fell 5% year over year but surpassed the Zacks Consensus Estimate of $5.98 billion by nearly 1%. (Read: McDonald's (MCD) Tops Q4 Earnings on Global Comps Growth )

Johnson & Johnson 's fourth-quarter 2016 earnings came in at $1.58 per share, beating the Zacks Consensus Estimate of $1.56 by 1.28% and increasing 9.7% from the year-ago period. The Zacks Rank #3 rated stock's sales came in at $18.11 billion, slightly missing the Zacks Consensus Estimate of $18.12 billion. (Read: J&J (JNJ) Q4 Earnings Top; Seeks Options for Diabetes Unit)

The Travelers Companies, Inc. 's TRV fourth-quarter 2016 operating earnings of $3.20 per share surpassed the Zacks Consensus Estimate of $2.63 by 21.7%. Total revenue of $27.6 billion was ahead of the Zacks Consensus Estimate of $26.9 billion. (Read: Travelers (TRV) Q4 Earnings & Revenues Beat, Increase Y/Y )

Verizon Communications Inc. 's VZ adjusted earnings per share came in at 86 cents for fourth-quarter 2016, below the Zacks Consensus Estimate of 89 cents. The Zacks Rank #3 rated stock's quarterly total revenue decreased 5.6% year over year to $32,340 million outpacing the Zacks Consensus Estimate which was pegged at $32,160 million. (Read: Verizon (VZ) Posts Mixed Q4: Earnings Lags, Revenues Top )

United Technologies CorporationUTX reported fourth-quarter 2016 adjusted earnings of $1.56 per share, in line with the Zacks Consensus Estimate. The Zacks Rank #3 rated stock's adjusted net sales for the fourth quarter were $14,659 million, beating the Zacks Consensus Estimate of $14,620 million. (Read: United Technologies (UTX) Q4 Earnings Match, Affirms View )

Procter & Gamble'sPG fiscal second-quarter adjusted earnings of $1.08 per share beat the Zacks Consensus Estimate of $1.06 by 1.9%. Zacks Rank #3 rated P&G's reported net sales of $16.86 billion beat the Zacks Consensus Estimate of $16.8 billion by 0.3%. (Read: Procter & Gamble (PG) Beats on Q2 Earnings, Updates View )

American Express Company 's AXP fourth-quarter 2016 adjusted earnings per share of 91 cents missed the Zacks Consensus Estimate of 98 cents per share. Revenues of $8.02 billion came ahead of the Zacks Consensus Estimate of $7.94 billion. (Read: American Express (AXP) Q4 Earnings Lag, 2017 View Raised )

Performance of the Top 10 Dow Companies

The table given below shows the price movements of the 10 largest components of the Dow, which is a price weighted index, over the last five days and during the last six months. Over the last five trading days, the Dow has gained 1.5%.

Ticker Last 5 Day's Performance 6-Month Performance
MMM -1.3% -0.8%
GS +3.5% +48.8%
IBM +4.9% +10.4%
HD +2.3% +1.6%
BA +5.7% +24.4%
UNH +2.3% +14.9%
MCD -0.7% +2%
TRV -0.3% +0.6%
JNJ -2% -10.4%
AAPL +1.2% +18.5%

Next Week's Outlook

Stocks have had a great week, riding on the positive impetus provided by Trump's policy actions. Though it is difficult to predict whether such a trend will continue over the long term, markets are likely to benefit from the President's actions over the next few weeks.

Meanwhile, many of the Dow's components have exceeded earnings estimates though most of them have fallen short of revenue expectations. If today's GDP numbers are also encouraging in nature, stocks could continue to move higher over next week.

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ENERGY TRANSFER PARTNERS (ETP): Free Stock Analysis Report

Johnson & Johnson (JNJ): Free Stock Analysis Report

Verizon Communications Inc. (VZ): Free Stock Analysis Report

Boeing Company (The) (BA): Free Stock Analysis Report

E.I. du Pont de Nemours and Company (DD): Free Stock Analysis Report

3M Company (MMM): Free Stock Analysis Report

United Technologies Corporation (UTX): Free Stock Analysis Report

General Electric Company (GE): Free Stock Analysis Report

American Express Company (AXP): Free Stock Analysis Report

The Travelers Companies, Inc. (TRV): Free Stock Analysis Report

Caterpillar, Inc. (CAT): Free Stock Analysis Report

TransCanada Corporation (TRP): Free Stock Analysis Report

McDonald's Corporation (MCD): Free Stock Analysis Report

Procter & Gamble Company (The) (PG): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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