The Zacks Analyst Blog Highlights: Microsoft, Procter & Gamble, AT&T, Boeing and Lockheed Martin

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Sep 29, 2014, 09:30 ET

CHICAGO, Sept. 29, 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 Microsoft Corp. (Nasdaq:MSFT-Free Report), Procter & Gamble Company (NYSE:PG-Free Report), AT&T Inc. (NYSE:T-Free Report), Boeing Co. (NYSE:BA-Free Report) and Lockheed Martin Corp. (NYSE:LMT-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 had a dismal week, but for Wednesday, due to a number of disparate factors. The blue-chip index closed in the red on Monday following growth worries in China and disappointing home sales data. Sluggish growth data from the Eurozone and air strikes in Syria led to losses for the Dow on Tuesday.

The blue-chip index rebounded on Wednesday, powered by upbeat home sales data and ECB's announcement of monetary stimulus. Heightened geopolitical tensions, dismal durable orders data and a decline in tech stocks led to losses for the blue-chip index on Thursday. The Dow has lost 1.3% during the first four trading days.

The Dow Last Week

The Dow lost 0.6% on Monday, retreating from the record level it achieved on Friday. Growth worries in China and disappointing home sales data dragged down the benchmarks. On Sunday, China Finance Minister Lou Jiwei stated that government will not "make major policy adjustments" based on any one economic indicator.

Recently, a report showed that China's industrial production expanded at the slowest pace since Dec 2008. Industrial production increased by 6.9% in August year over year, less than 9% in July.

Jiwei's comments dampened investor sentiment as markets were looking forward to news related to aggressive economic stimulus measures. The National Association of Realtors reported on Monday that existing home sales declined unexpectedly in August, snapping four straight months of gains. Sales dropped 1.8% to 5.05 million in August from 5.14 million in July on a seasonally adjusted basis.

Moreover, a decline in oil prices had a negative impact on energy stocks. Prices of WTI crude oil and Brent crude oil declined 1% and 1.5%, respectively.

Markets once again ended in the red on Tuesday. Sluggish growth data from the Eurozone and air strikes in Syria offset China's encouraging economic data. Markit reported that composite Purchasing Managers Index (PMI), an indicator of the health of Eurozone's manufacturing and services sectors, declined to 52.3% in September.

Meanwhile, the U.S. launched massive air strikes for the first time against militants in Syria. The bombing was also supported by its Arab allies such as Saudi Arabia, Qatar and the United Arab Emirates.

Separately, the preliminary reading of HSBC China Manufacturing Purchasing Managers Index showed that manufacturing activities in China improved marginally in September. However, this encouraging reading failed to boost investor confidence. Moreover, announcement of tighter-than-expected tax inversion rules had a negative impact on the benchmarks. The blue chip index lost 0.7%.

The Dow rebounded on Wednesday, gaining 0.9%. Benchmarks were buoyed by upbeat home sales data and the European Central Bank's (ECB) announcement of monetary stimulus. Encouraging comments by two Fed officials regarding health of the economy and rate hike also lifted sentiment. Chicago Fed president Evans said on Wednesday that the Fed must be "exceptionally patient" regarding the rate hike.

On the other hand, President of Federal Reserve Bank of Cleveland Loretta Mester said the Fed should provide a clearer picture regarding rate hike as the economy has shown signs of recovery. European Central Bank president Mario Draghi said the ECB will opt for further policy easing to help the Eurozone's economy to recover at a faster rate.

Benchmarks ended in the red on Thursday as the tech sector slumped. Moreover, heightened geopolitical tensions and dismal durables orders data also dented investor sentiment. A draft law was submitted to Russia's parliament, which, if approved, would enable seizure of assets of foreign companies in the country.

Separately, Haider al-Abadi, the Iraqi Prime Minister, warned that militants of ISIS are planning to organize terror attacks on metro subways of the U.S. and France. Durable orders declined 18.2% in August to $245.4 billion, wider than the consensus estimate of 17% drop. The Dow lost 1.5%, witnessing its steepest one-day decline since Jul 31.

Components Moving the Index

Microsoft Corp. (Nasdaq:MSFT-Free Report) has postponed the launch of its Xbox One game console in China to Sep 29. The launch was initially slated for Sep 23. The government has approved 10 games, digital versions of which will also be available.

Microsoft stated that though it has made steady progress, it still needed some more time to deliver the best experience to its users. Apart from this, no other reason was given for the delay. The company will compensate customers who had pre-ordered with two free games.

The Procter & Gamble Company (NYSE:PG-Free Report) is set to fully exit its underperforming pet care business with the sale of the remainder of its pet care business in Europe to consumer products company Spectrum Brands Holdings, Inc. (SPB). On Tuesday, P&G announced that it will sell its pet care brands in Europe to Spectrum Brands for an undisclosed amount.

The Spectrum deal is expected to close in 2015, subject to regulatory approvals. The deal has already been approved by Spectrum's board of directors. The transaction includes 42 markets in Europe.

AT&T Inc. (NYSE:T-Free Report) recently announced its plans to launch Samsung Gear S at its stores in the fall of 2014. The latest product launch comes close on the heels of the carrier's last week announcements of the upcoming launches of LG G3 Vigor and Samsung Galaxy Alpha.

The new product rollouts will enable the company to keep up with the mad rush characteristic to the present-age smartphone market. Moreover, in the face of iPhone6 creating a wave in the said market, the new offerings will also ensure better value for Android loyalists.

The Boeing Co. (NYSE:BA-Free Report) and Lockheed Martin Corp.'s (NYSE:LMT-Free Report) partnership United Launch Alliance (ULA) has teamed up with Blue Origin LLC, founded by Amazon.com Inc.'s Jeff Bezos, to build a new rocket engine named BE-4. The agreement is for a four-year development process with testing slated for 2016 and flight in 2019.

The BE-4 is now under testing at Blue Origin's West Texas facilities. The U.S. made rocket engine will cost much less than the Russian-built RD-180 that is currently in use to power ULA's heavy-lift Atlas 5 rockets. Although ULA already has a two-year supply of Russian engines with an additional 11 to be delivered by 2014 end and 2015, the BE-4 will be a standby just in case the RD-180 engine supply gets disrupted.

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