General Electric Company (GE), The Boeing Company (BA): Markets Rally on Improving Auto Sales and Rising Factory Orders

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Strong economic data reports were released today, and for the most part investors seem to like what they see. As of 12:45 p.m. EDT, the Dow Jones Industrial Average was up 33 points, or 0.22%. The S&P 500 and the NASDAQ were also higher, up 0.34% and 0.22%, respectively, but all the major indexes have pulled slightly back from their highs of the day, which were hit just before 12 p.m. EDT.

U.S. auto sales experienced a nice bump higher in May, as Ford Motor Company (NYSE:F) reported light-vehicle sales rose by 13% in the month, which helped the automaker experience its best June in nearly seven years. All the while, General Motors Company (NYSE:GM) managed to post solid numbers as it realized vehicle sales increase of 6.5% in the month, which was the company’s best performance in nearly five years.

In addition to the positive auto reports, U.S. factory orders rose in May by 2.1%, which was an increase from April’s revised 1.3% rise. We are now seeing evidence that manufacturing is coming back as we have now experienced three straight months of improving data.

General Electric Company (NYSE:GE)

One would think with the strong factory report that The Boeing Company (NYSE:BA) and General Electric Company (NYSE:GE) would both be jumping higher, not topping the Dow’s losers list, but they are indeed. Shares of Boeing are down 1.08%, and General Electric is lower by 0.90% this afternoon. The report indicated that demand for aircraft rose 51% in May, which came after an 18.4% rise in April and a drop of 43.3% in March. The only reasonable explanation for The Boeing Company (NYSE:BA) moving lower today is that investors were expecting a higher increase in May. But, even if May didn’t wow investors, we would expect next month’s report to come in big again, as the Paris Air Show was in June and preliminary reports indicated that The Boeing Company (NYSE:BA) inked a number of big deals during the exhibit.

As for General Electric Company (NYSE:GE), durable goods orders and power generation equipment also both increased in May — two areas of industry that GE operates in — but the stock is also lower today. One reason that may be isn’t because of the factory orders report, but rather the announcement that the company closed the deal to buy Lufkin Industries, Inc. (NASDAQ:LUFK) for $3.3 billion. The acquisition gives General Electric Company (NYSE:GE) more diverse offerings in the oil and gas industry, but as the natural gas boom continues to rage on here in the U.S., the question must be asked, “What will happen when things begin to slow down?” As GE builds out its offerings for this industry, how long will it take the company to recoup this investment — and will it be worth it in the long run? We have seen General Electric Company (NYSE:GE) grow too big before; perhaps the company is once again making the same mistake.

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