Why Stocks Are Going Nowhere Fast
Jan 11th 2013 3:03PM
Updated Jan 11th 2013 4:15PM
Stocks on the Dow Jones Industrial Average have been treading water for most of the day following news from some of its biggest components, including Boeing and American Express . With roughly an hour left in the trading session, the blue-chip index is up a meager four points.
Shares of Boeing are depressed following an announcement that the FAA will conduct a review of its 787 Dreamliner, the aerospace company's newest aircraft and the world's first largely carbon-composite airliner. There have now been multiple incidents over the last week in which the planes experienced well-publicized problems. The first incident involved an aircraft that caught fire while sitting at the gate at the Boston airport.
According to Transportation Secretary Ray LaHood: "There are concerns about recent events involving the Boeing 787. That is why today we are conducting a comprehensive review." LaHood nevertheless went on to note that he believes the "plane is safe and I would have absolutely no reservations about boarding one of these planes and taking a flight."
Despite these assurances, shares in Boeing are trading lower by 2.7%.
Meanwhile, shares of American Express are bucking the broader downward trend among financial stocks after the credit card company announced a series of cost-cutting measures. The biggest news was that it will lay off 5,400 workers. The reduction, most of which will come from American Express' travel division, will shrink its labor force by 8.5% and cost the company $400 million in severance costs -- the latter of which will be recorded in the fourth quarter of 2012.
Finally, shares of the nation's fourth-largest bank by assets, Wells Fargo , are down after the company reported results for the fourth quarter and 2012 fiscal year. While the bank announced another round of record profits for both periods, traders are nevertheless punishing its stock for two reasons. First, its net interest income decreased by 10 basis points compared with the preceding quarter. And second, it originated fewer mortgages. To see why these are no reason for concern, click here.
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The article Why Stocks Are Going Nowhere Fast originally appeared on Fool.com.John Maxfield has no position in any stocks mentioned. The Motley Fool recommends American Express Company and Wells Fargo & Company. The Motley Fool owns shares of Wells Fargo & Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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