Wednesday, January 31, 2018

"Forget Apple: The Stock Market’s Rise Is All About Boeing" (BA)

Boeing quietly has more pull on the stock market than pretty much any other company.
The aerospace giant’s stock has doubled and then some over the past 12 months, including an additional 5.3% Wednesday. That came after the firm forecast a higher profit margin and a jump in operating cash as it continues to deliver record numbers of jetliners.

With the most recent rise, the company now makes up about 9.4% of the Dow Jones Industrial Average, far more than Apple or any other company in the 30-stock index. The Dow is price-weighted, which means Boeing’s stock price, far and away the most expensive at more than $355, has the most pull on the index.

In Wednesday trade, it was responsible for 123 of the Dow’s 143-point rise.

Boeing became the highest-weighted stock in the Dow last July, when it surpassed Goldman Sachs Group Inc.. The aerospace company, now worth more than $200 billion, made up less than 6% of the index a year ago, according to The Wall Street Journal’s Market Data Group. Before this most recent stretch, Boeing was also the highest-weighted stock during brief stints in 2006, when it made up roughly 6% of the index.

The S&P 500 by contrast is market capitalization weighted, so the mammoth tech giants get the highest weight, and Boeing’s market cap makes up just 0.8% of that index’s total value. Still, those tech giants are specks in the S&P 500 compared to Boeing’s weighting in the Dow. Apple, Microsoft, and, three of the biggest companies in the S&P 500, together make up about the same share of that index as Boeing does of the Dow....MORE