The Zacks Analyst Blog Highlights: General Electric, IBM, Boeing, Caterpillar and 3M

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Oct 27, 2014, 09:30 ET

CHICAGO, Oct. 27, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the General Electric Company (NYSE:GE-Free Report), IBM Corp. (NYSE:IBM-Free Report), Boeing Company (NYSE:BA-Free Report), Caterpillar Inc. (NYSE:CAT-Free Report) and 3M Company (NYSE:MMM-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Friday's Analyst Blog:

Dow 30 Stock Roundup

The Dow experienced a largely positive week, buoyed by bullish earnings results. The blue-chip index moved upward on Monday, despite dismal results from a key component. Encouraging earnings results and positive economic news from China and the Eurozone boosted the Dow on Tuesday.

Gunfire in and around the Canadian Parliament building in Ottawa coupled with lower crude prices dragged the blue-chip index into the red on Wednesday. The Dow gained on Thursday following upbeat earnings results and encouraging economic news from the Eurozone and China. The Dow has gained 2.4% during the first four trading days.

Last Week's Performance

The Dow rose 1.6% last Friday, registering gains for the first time in six days. Markets ended in the green on Friday, offsetting some of the weekly losses on upbeat earnings results and encouraging economic data. Shares of General Electric Company (NYSE:GE-Free Report) gained 2.4% after posting third quarter operating earnings per share of 38 cents, beating the Zacks Consensus Estimate by a cent.

Construction of privately-owned housing jumped 6.3% on September to seasonally adjusted annual rate of 1,017,000 from August. Separately, Thomson Reuters and University of Michigan consumer sentiment index rose in October to 86.4, reaching its highest level since Jul 2007.

Over the week, the Dow declined 1%. Through the week, benchmarks experienced volatile sessions as global growth worries and concerns over outbreak of Ebola virus dented investor sentiment. Moreover, declining oil prices also dragged down the markets. However, St. Louis Federal Reserve president James Bullard's comments, which sparked possibility of the Fed continuing with its bond repurchase plan, boosted investors' confidence.

Separately, concerns about a possible Ebola outbreak was triggered by news that a nurse was affected with Ebola in the US while treating a Liberian man affected with the deadly virus. This development dragged down airline stocks on concerns that demand for travel-related services may be affected.

Moreover, economic data, including manufacturing activity in New York, PPI and U.S. homebuilders' confidence was disappointing. However, data on initial claims, industrial production and demand for manufactured goods were positive. Most of the earnings results released last week were also positive.

The Dow This Week

Dismal earnings results from IBM Corp. (NYSE:IBM-Free Report) offset benchmarks' gains on Monday, which nonetheless finished in the green. Encouraging earnings results boosted investor confidence and raised possibility of a solid third quarter earnings season. According to Thompson Reuters, 63.2% of the 87 S&P 500 companies that released earnings reports till Monday posted earnings higher than analysts' expectations. However, IBM shares plunged 7.1% after reporting dismal third quarter results.

Moreover, IBM recently agreed to pay a sum of $1.5 billion to GlobalFoundries in order to shed its loss-making chip manufacturing unit. This sum will be paid by IBM over a period of three years. IBM was the biggest loser for the Dow, which still gained 0.1%.

The blue-chip index increased 1.3% on Tuesday following encouraging earnings results from the technology sector. Moreover, the prospect of the European Central Bank buying corporate bonds and China's positive economic data also helped push stocks upward.

China witnessed growth of 7.3% in the third quarter, ahead of the consensus estimate of 7.2%. Additionally, factory output in China grew at a rate of 8% in September. Meanwhile, reports emerged that the European Central Bank (ECB) may opt for a QE program where it will be buying corporate bonds in the secondary markets.

Gunfire in and around the Canadian Parliament building in Ottawa coupled with lower crude prices dragged benchmarks into the red on Wednesday. Brent December crude declined $1.51 to close at $84.71 per barrel. U.S. crude dipped 2.5% to close at $80.52 a barrel. The slump in crude prices was due to larger-than-expected jump in U.S. crude inventories

Markets had turned green in the morning backed by positive earnings numbers from the tech sector. However, benchmarks erased all gains soon after news of gunfire at the Canadian parliament. The blue-chip index retreated to the red again for this year, losing 0.9%.

Positive results from The Boeing Company (NYSE:BA-Free Report) failed to impress investors as they were worried about the costs of the 787 Dreamliner. The company emerged as the biggest loser in the Dow, with its shares plunging 4.5%.

The Dow gained 1.3% on Thursday following upbeat earnings results and encouraging economic news from the Eurozone and China. However, concerns over news that doctors are testing a patient for Ebola in New York, eroded some of the day's gains. Shares of Caterpillar Inc. (NYSE:CAT-Free Report) jumped 5% after posting impressive third quarter results. Separately, 3M Company (NYSE:MMM-Free Report) also posted impressive results, gaining 4.4%.

Meanwhile, the Chinese flash HSBC /Markit manufacturing purchasing managers' index (PMI) increased to 50.4 in October from 50.2 in September. This was also higher than analysts' expectations of 50.3. Moreover, the Markit Flash Eurozone Manufacturing PMI rose to 50.7 in October from 50.3 in September.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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