We’re struck today by what looks like another “disconnect” in the stock market, manifested in Boeing (BA) shares, which rallied nearly 4% and contributed almost 21 upside points to the DJIA. BA’s gain alone easily kept the DJIA from closing in negative terrain.
But BA reported 1Q profit fell 15% (but not as much as feared), and the company trimmed full-year EPS view, reflecting special charge for loss of health-care related tax benefits. Backlog also fell slightly and revenue was down almost 8%.
But that’s not the disconnect.
Investors buying BA shares today didn’t pay much mind to the action in the airline sector (y’know, Boeing’s customers), where stocks got hammered as carriers like American (AMR) and AirTran (AAI) continue to post losses; AMR’s was wider vs year ago while AAI’s narrowed.
AMR CEO Gerard Arpey said while the carrier made progress on revenue, “we were simply unable to overcome the challenge of the global economic environment coupled with once-again escalating fuel prices.”
Sounds a bit gloomy; AMR shares fell 9.2% to close at $7.77.