US Stock Market Overview – Stocks Trade Mixed Following Soft Earnings from Boeing

US stocks were mixed on Wednesday as technology shares rallied and Industrials slumped. The Dow was the only major average to decline following worse than expected earnings from Boeing and Caterpillar. Most were glued to the TV on Wednesday as Robert Mueller the former special counselor, testified in front of the House judicial and intelligence committees. Most sectors were higher led by cyclicals and financials, consumer staples bucked the trend. Energy shares moved higher as crude rallied more than 1% following a larger than expected draw in crude oil stockpiles.

Boeing reported a Larger than Expected Loss

Boeing reported a huge Q2 loss of $2.9 billion on Wednesday, its worst ever, as costs pile up for the aerospace giant while its flagship 737 Max jet remains grounded after two fatal crashes. Shares of Boeing tumbled helping to drag down the Dow Jones Industrial Average.  Boeing lost $5.82 a share in the second quarter of 2019, with revenue falling sharply as well to $15.8 billion. Boeing’s quarterly loss is the biggest in history for the company, according to FactSet, topping a $1.6 billion setback during the financial crisis in 2009.

The company delivered 104 fewer airplanes to customers in the second quarter compared with last year, as deliveries of the company’s mass-produced 737 Max aircraft are halted. Boeing took a $4.9 billion charge last week because of the Max.

Caterpillar Share Dropped

Shares of Caterpillar dropped on Wednesday after the company posted disappointing Q2 results as higher material costs including tariffs and lower demand in China made a dent in its profit. Caterpillar earned $2.83 per share in the Q2, versus consensus estimate of $3.12 per share. Revenue also disappointed with $14.432 billion reported compared to the $14.435 expected. The heavy machinery manufacturer also lowered full-year earnings guidance to be at the lower end of previous range of $12.06 to $13.06, short of the estimate of $12.24 per share. The worse-than-expected results are partially due to the increase in manufacturing costs. Caterpillar’s sales in Asia-Pacific declined in the second quarter mainly because of the lower demand in China.

Crude Oil Inventories Dropped

US crude oil inventories decreased by 10.8 million barrels from the previous week. At 445.0 million barrels, U.S. crude oil inventories are about 2% above the five year average for this time of year. Total gasoline inventories decreased by 0.2 million barrels last week and are about 2% above the five year average for this time of year. Distillate fuel inventories increased by 0.6 million barrels last week and are at the five year average for this time of year. Total commercial petroleum inventories decreased last week by 6.7 million barrels last week