Stocks rallied to close the week, again showing resilience in the face of troubling economic data. An extension of the oil rebound and more positive reopening also provided some ballast to equities.

Source: Provided by Finviz

  • The S&P 500 climbed 0.39%.
  • The Dow Jones Industrial Average advanced 0.25%
  • The Nasdaq Composite gained 0.79%
  • After being one of the Dow components worst hit by the novel coronavirus, Walt Disney (NYSE:DIS) was the index leader today on news Florida is taking steps to reopen theme parks, including Disney World in Orlando.

Onto the data, which were again dismal. A report released earlier today by the Federal Reserve indicates industrial production plunged 11.2% last month, the worst decline on record (and that data spans more than a century). Even with that, Dow members from the industrial sector 3M (NYSE:MMM) and Caterpillar (NYSE:CAT) closed higher today.

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Separately, the Commerce Department said retail spending tumbled 16.4% in April, far worse than the 12% drop economists expected. The April decline follows an 8.3% in March.

Data points like those are sure to cap gains, but the broader market moved higher even as just 14 of 30 Dow names were higher in late trading.

Showing Some Strength

Neither of the aforementioned data points would appear to be conducive to success for a stock like Home Depot (NYSE:HD), yet the home improvement retailer was one of the Dow leaders Friday. Today’s strength in the name is relevant for several reasons, not the least of which is that the company reports earnings on Tuesday.

More Boeing Drama

As has been widely documented, any road to recovery for Boeing (NYSE:BA) is likely to be bumpy and long. Add another bump to that road today following a Barron’s article that points out Boeing isn’t too big to fail.

That doesn’t mean Boeing will disappear, but investors shouldn’t expect the company will get the same treatment some banks got during the global financial crisis. Bottom line: Boeing is going to have clean up its own backyard.

Industrial Carnage

As noted above, a couple of Dow stocks hailing from the industrial sector fought of the weak, related data. Boeing didn’t, but the real laggard from the sector Raytheon Technologies (NYSE:RTX). Not only was Raytheon the worst-performing Dow stock today, somewhat quietly it’s lower by more than 13% over the past month.

No Upgrade Help

Goldman Sachs’ (NYSE:GS) joined other financial stocks in the losers column today, even after earning an upgradeto “outperform” from “market perform” from BMO Capital Markets.

“GS’s strong capital position, relatively small loan book, limited reliance on spread income, and ongoing expense/ funding initiatives leave GS well-positioned versus most of the money center banks,” said the research firm.

Tepid Coverage

Microsoft (NASDAQ:MSFT) closed slightly higher after Citibank initiated coverage of the tech giant with a “neutral” rating.

“We do view shares as somewhat defensive in an uncertain environment, however the downside of the product cycle as well as margin impacts of Xbox launch could reverse some of the favorable trends that benefitted numbers in the earlier part of FY20 (upside to high-margin software franchise,” said the bank.

Bottom Line on the Dow Jones Today

In another day when bad data commanded headlines, but stocks still rose, I thought the following from FactSet might be interesting. To boil it down, companies announcing negative earnings surprises this year aren’t being punished in the fashion investors would expect.

“Companies in the S&P 500 that have reported negative earnings surprises for Q1 have seen a decrease in price of 1.1% on average from two days before the company reported actual results through two days after the company reported actual results,” according to the research firm.

That percentage decline is below the five-year average of 2.8%.

Todd Shriber has been an InvestorPlace contributor since 2014. As of this writing, he did not hold a position in any of the aforementioned securities.

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