The COVID-19 pandemic continues to add tens of thousands of new cases in the US every day, but that’s not holding back momentum on Wall Street. US stocks rose higher, and it was time for some of the old economy companies left out of concentration so far to participate. the Dow Jones Industrial Average (DJINDICES: ^ DJI), S&P 500 (SNPINDEX: ^ SPX)and Nasdaq compound They went up sharply, with the Dow taking them higher.
Stock market today
|
Index |
Percentage change |
Point change |
|---|---|---|
|
Dow |
2.13% |
557 |
|
S&P 500 |
1.34% |
42 |
|
Nasdaq compound |
0.94% |
98 |
Data source: Yahoo! Finance.
One of the issues that investors have seen play in recent months is the triumph of newer companies over their more mature counterparts. Nowhere has it been clearer than in the automotive industry, where Tesla (NASDAQ: TSLA) and countless electric vehicle upstarts have made giants of well-established automakers look hopelessly outdated. On Tuesday, however, Ford Motor (NYSE: F) and General Engines (NYSE: GM) managed to record earnings greater than Tesla’s shares. Value investors are hoping it’s time for the legacy auto giants to shine, but today’s higher move was just a small step closer to regaining supremacy in the industry.
Ford rides a wild horse
Ford’s shares rose nearly 5% as investors weighed the likely impact of an iconic model’s return to the automaker lineup. Having set the stage in February, the company unveiled its new Bronco line of 4×4 SUVs late Monday night, hoping to capture a key demographic of customers looking for a very specific vehicle type.
Bringing the Bronco back tackles a hole in Ford’s line of vehicles. Between its wide range of cars and its line of F-150 trucks, Ford covers most of its bases. However, an increase in demand for vehicles that drivers can take off-road has left Ford looking inward.
Image source: Ford.
That’s where the Bronco will come in. Two- and four-door models will give buyers flexibility in their choices, with a price starting at just under $ 30,000. That’s competitive with Jeep Wrangler’s line of Fiat Chrysler Cars (NYSE: FCAU), which has had a wide open field to dominate that niche in the industry. Ford will accept early bookings for the Bronco for just $ 100, a pittance compared to the deposits Tesla has demanded for its vehicle offerings.
Looking for best sales
Both Ford and GM could use an elevator for sales. The COVID-19 pandemic has achieved a large amount in production and sales volumes, and the prospect of renewed coronavirus restrictions has prevented the two populations from gaining too much ground.
General Motors, which rose more than 3% today, saw dire effects of the pandemic. Vehicle deliveries in the second quarter decreased 34% year-over-year, and Cadillac in particular suffered a 41% drop. Ford’s 33% drop in deliveries was nearly the same. Although GM and Ford said things improved as the quarter progressed, June numbers were still a long way from their pace from the same month in 2019.
Even with today’s increase, Ford and GM stock prices are still more than 30% lower than where the year began. Tesla made just a 1% gain on Tuesday, but its shares have risen 262% so far in 2020. Although value-seeking investors have looked at automakers for some time, General Motors and Ford will need much more to convince to anyone who has changed things forever.
