Wednesday's Stock Market Open: Investors Eye Earnings For Economic Clues

Investors found optimism Wednesday in corporate earnings but mixed reports left little evidence of global economic strength.

Shortly after noon, the Dow Jones Industrial Average was trading up 23 points at 26,811. The S&P 500 added nearly 3 points to 2,999 and the Nasdaq Composite was up 4 points to 8,108.

Boeing (BA) missed third-quarter predictions, reporting net profit of $1.16 billion or $2.05 a share compared with $2.36 billion or $4.07 a share in the third quarter of 2018. Total revenue was off 21% to $19.9 billion. Being forced to take the 737 Max out of service following two fatal crashes depressed earnings. The company expects the jets to return to service before the end of the year, pending regulatory approval.

“Our top priority remains the safe return to service of the 737 MAX, and we're making steady progress," said Boeing President and Chief Executive Officer Dennis Muilenburg.

General Dynamics (GD) reported third-quarter net earnings of $913 million or $3.14 a share compared with $864 million or $2.89 a share in the year ago quarter. Revenue totaled $9.8 billion, up 7.3% from September 2018. Chairman and CEO Phebe Novakovic credited Gulfstream’s introduction of new models and defense contracts for the positive results.

Norfolk Southern (NSC) reported third-quarter net income of $657 million or $2.49 a share on revenue of $2.8 billion. The results include a $32 million write-off of a receivable following a legal dispute. Income from railway operations totaled $1 billion, off $24 million from last year.

Eli Lilly (LLY) reported third-quarter earnings Wednesday of $1.2 billion or $1.37 a share compared with $1.1 billion or $1.12 a share in the year ago quarter. Total revenue was up 3% to $5.4 billion.

Elsewhere, British Prime Minister Boris Johnson awaited a decision by the European Union on a Brexit extension. Reports indicated the EU likely would put off the divorce from the United Kingdom until Jan. 31, giving Johnson time to call an election. It was unclear, however, whether opposition leaders would go along.

The House of Commons voted Tuesday to approve Johnson’s agreement with the EU but then balked at the three-day timetable for full approval, making it impossible for the U.K. to smoothly exit the economic alliance by the current Oct. 31 deadline.

China’s Ministry of Industry and Information Technology said Wednesday it expects industrial output to start improving in the fourth quarter and will meet full-year growth targets. Yuan Da, a spokesman for the National Development and Reform Commission, admitted, however, the economy is ending its high-growth phase as Beijing and Washington continue to work on a new trade agreement.

On global markets were mixed. The Hong Kong Hang Seng closed off 0.82% while Japan’s Nikkei 225 rose 0.34% and China’s Shanghai Composite dipped 0.43%. Australia’s S&P/ASX was virtually flat, up just 0.01%.

In Europe, London’s FTSE 100 closed up 0.67% and the German DAX added 0.34%. The French CAC 40 was off 0.08% and Stoxx Europe 600 finished up 0.11%.

The British pound was up 0.05% at $1.288 while the euro was off 0.06% at $1.1118. The dollar index was up 0.04%.

Oil futures were higher. Crude oil added 1.83% at $55.16 while Brent crude inched up 1.01% to $60.30. Gold and silver futures also were higher.