The Dow failed to strengthen its grip on the throttle on Thursday, even after its 8th-largest stock beat earnings estimates, reigniting investor optimism after Boeing – its largest component – saw profit plunge 275% year-over-year.
A busy week for earnings made for a choppy day on Wall Street. Futures tracking the Dow Jones Industrial Average had pointed to a solid gain at the open, but the Dow slid when the bell rang.
By 9:41 am ET, the DJIA had lost 55.51 points or 0.2%, dropping the index to 27,214.46.
The S&P 500 and Nasdaq also took losses, declining 0.23% to 3,012.74 and 0.52% to 8,278.07.
While not outstanding when viewed in a vacuum, 3M’s earnings beat should provide investors with optimism following a dismal July manufacturing report from IHS Markit.
The manufacturing purchasing managers’ index (PMI) slid to 50.0, narrowly avoiding posting its first contraction since the Great Recession in 2009. The index of manufacturing output, however, did contract in July, sliding to 48.9 – its worst mark in 119 months.
3M’s earnings also offset brutal results from Boeing and Caterpillar, which together triggered the Dow’s previous-day decline.
On the other hand, 3M lowered its earnings guidance for 2019, which – if part of a broader trend – could portend a dreary end to the year for US equities.
Already, JPMorgan has warned that the stock market could suffer a deep correction once the post-Fed-rate-cut euphoria wears off and investors must reckon with fundamental economic factors.
MMM shares rose 2.6% to $184.08, but big losses from Dow Inc (-3.6%) and Boeing (-2.6%) forced the DJIA into the red.