Boeing competes with Lockheed Martin and Airbus, which have proven to be substantial competitors in recent months. Meanwhile, Boeing is facing internal problems with its unions and outsourcing, but did recently receive $2.2 billion in orders from the U.S. government for eight more Boeing C-17 cargo planes, which fuel 900 jobs at Boeing’s Hazelwood Missouri plant and thousands more among its suppliers. The funds were included in the 2009 defense supplemental spending bill that passed the Senate on Thursday.

Boeing Integrated Defense Systems, headquartered in St. Louis, is a $32 billion business with 70,000 employees worldwide. Boeing is the largest global aircraft manufacturer by revenue, orders and deliveries, and the largest aerospace and defense contractor in the world. Boeing is also the largest exporter in the United States.

Microsoft Corporation (NDAQ: MSFT) shares moved three percent higher shortly after trading began, with a 21 million share order hitting the tape early in the session. This is unusual in that the transaction size is more than a third of its average daily trading volume. However, a tech rally on “quadruple witching” day can produce volatile trading at times.

Quadruple witching is an event that happens on the third Friday of the third month every quarter, whereby stock index future, stock index options, stock futures, and stock options all expire on the same day. Meanwhile, the tech sector rallied on Apple Inc.’s (NDAQ: AAPL) first day of sales for its newest iPhone and strong results at Research-in-Motion (NDAQ: RIMM).

Goldman Sachs also added Microsoft to its “conviction buy” list, citing revenue drivers, cost controls, and a continued strong cash position. Of course, the tech giant is preparing to launch its newest operating system, Windows 7, which promises to be much simpler and more efficient that past versions of the Windows operating system.

In the end, the tech rally and catalyst for Microsoft specifically will likely send shares higher today. Meanwhile, the launch of its latest operating system, various cost controls in place, and a strong cash position will likely help is succeed going forward into the future.

Since the beginning of the year, Target Corporation (NYSE: TGT) has outperformed Wal-Mart Stores, Inc. (NYSE: WMT) by nearly 30 percent as the economy begins to show signs of recovery. Consumers that had been going to Wal-Mart for cheap goods began to seek out Target stores in search of higher quality brands at slightly higher prices.

The Target-Wal-Mart pair trade is constructed by going long on Target and going short on Wal-Mart during good times and vice versa for bad times. The result is an isolated trade that extracts only the difference between those two stocks from any larger movements in the retail sector. However, a bet in the wrong direction can produce larger losses than individual ownership.

So, is long-Target and short-Wal-Mart the right side of the trade? The answer to that question depends largely on the movement of the overall economy, which remains hotly debated by economists and investors. Bulls believe that a recovery is already in the works, while bears insist that the economic improvement is just a illusion and things could get much worse.

Kraft has several initiatives aimed at improving growth rates around the world. First, the company is introducing new products, including quick meals, health & wellness, snacking, and premium products. Meanwhile, the company is increasing its value-orientated marketing and restructuring its category mix and investing where it matters most.

Another key issue that Kraft faced in the past was rising commodity costs, which put pressure on its profit margins. Since then, commodity prices have moderated, but the company has taken action by rebuilding its brand equity to a point where pricing and productivity can cover input cost inflation. This will help the company avoid similar problems down the road.

Finally, Kraft’s turnaround plan has led to substantial savings of $1.1 billion in 2008, and will lead to $1.3 billion and $1.4 billion in 2009 and 2010, respectively. The company streamlined its manufacturing with the closure of 36 plants and simplified its organization by eliminating approximately 19,000 positions within the company.

So far in 2009, Kraft has successfully navigated the shift from huge cost spikes and pricing to an extreme reduction in consumer spending. Meanwhile, first quarter net revenues grew 2.3% with operating income margins increased 290 basis points to 13.5% with margin expansion in nearly every business segment. As a result, the company anticipates diluted EPS of $1.88 per share.

“McDonald’s continues to deliver a relevant restaurant experience that provides consumers with a broad range of quality menu choices, affordable prices and unmatched convenience,” said Chief Executive Officer Jim Skinner. “Our underlying business performance remains strong. In constant currencies, first quarter results reflect higher revenues, operating income and earnings per share over the prior year.”

From the company’s 8-K filing with the SEC:

McDonald’s U.S. posted a first quarter operating income increase of 6% fueled by strong comparable sales. The U.S. business continues to gain market share as consumers visit McDonald’s more often for the classic taste of core products like the Quarter Pounder, convenient locations and operating hours, and compelling value across the menu. Increased sales of chicken, breakfast and beverages contributed to results.

Led by the U.K., France and Russia, Europe delivered solid first quarter comparable sales despite the shift in timing of Easter-related school and business holidays from March 2008 to April 2009. McDonald’s continues to gain market share as tiered-pricing menus, seasonal food events and day-part expansion in the morning and late night hours connect with customers. Europe’s first quarter operating income increased 1% in constant currencies. Europe’s locally relevant strategies continue to drive performance, and the segment is expected to strengthen as the year progresses.

Asia/Pacific, Middle East and Africa (APMEA) reported strong first quarter comparable sales driven by performance in Australia and Japan, partly offset by weaker sales in China. In constant currencies, APMEA’s first quarter operating income was up a strong 11%, driven by everyday affordability, menu choice and convenience.

The good news is that consumer spending increased 0.6 percent in January compared to the previous month. This data marks the first rise in six months as personal incomes rose 0.4 percent and disposable income jumped 1.7 percent. The report is good news for retailers that were looking for an increase in consumer spending in order to spur the sales slump that has depressed their shares.

The Dow Jones Industrial Average sank 160 points, or 2.3 percent, to 6,903 just over an hour into trading. Meanwhile, the Standard & Poor’s index fell 2.5 percent, or 18 points, while the Nasdaq fell 1.9 percent, or 25 points, in early trading.

Bank stocks, including Bank of America (NYSE: BAC) and Citigroup (NYSE: C), surged higher on the news. The S&P Financial Index moved up 8.2% on the session, recouping many of the losses from earlier this week and last week. Meanwhile, the Dow Jones as a whole moved up 2.5% to 7,292 near the close. This is welcome news to shareholders who saw the index drop to 1997 lows during Monday’s session this week amid banking concerns.

President Barack Obama has asked Congress to approve more funds for use, but many economists do not expect the second half of the $700 billion to be enough to fix the troubled financial sector. There are many different plans on the table to solve this problem, including the so-called “good bank, bad bank” proposal which involves the separation of toxic assets from the good banks.

The government is also taking action to improve the public image of the enormous bailout by announcing tougher executive compensation restrictions for firms that receive government aid. Meanwhile, many investors remain wary of the bailout solutions with some investors calling it anti-capitalistic for the government to take an equity position in banks in order to bail them out.

The good news: Consumers are spending less and saving more. U.S. consumers cut their spending during December by 1% while savings rates increased to 3.6% for the month. This is good news for banks that can use the increase in deposits to help shore up financials and increase their incentives to lend money to mortgages or business loans.

Shares of Bank of America fell $0.57, or 8.5%, to $6.01 per share in mid-day trading.

It is no secret that retailers will experience trouble in 2009 as the economy works to recover from its recession. The National Retail Foundation is forecasting a 0.5% drop this year versus 2008 with the first two quarters seeing declines of 2.5% followed by a slight uptick in the third and fourth quarters. Sales in the fourth quarter are expected to jump 3.6%, but primarily due to a very weak fourth quarter of 2008.

Wal-Mart remains better positioned than most retailers, however, with strong pricing power and a reputation for having the lowest prices. As a result, many analysts remain bullish on the company with the average analyst rating the stock with a “Buy” and a price target of $61.65. Overall, the 17 analyst estimates for the next year range from $53.00 to $70.00 per share.

In the end, Wal-Mart may see slightly lower sales, but consumers cannot stop shopping altogether. The retailer’s position as the cheapest place for goods as well as its recent expansions into grocery products and other areas should help keep the retailer performing well in 2009. Shares of Wal-Mart are trading down $0.26, or 0.54%, at $47.60 per share in mid-day trading.

Last quarter, Caterpillar reported Q4 earnings per share of $1.08 – sharply lower than estimates – due to higher machinery and engine costs, sluggish machine revenue growth, and unfavorable currency movements. The company was not able to reduce operating costs quickly enough to adjust for a lower level of output and sharply higher input costs. Many analysts were expecting the firm to report earnings per share of between $1.25 and $1.36 per share in the quarter.

Caterpillar Inc. operates in three principal lines of business: Machinery, Engines and Financial Products. Machinery deals with the design, manufacture, marketing and sales of construction, mining and forestry machinery. Engines business deals with the design, manufacture, marketing and sales of engines. Financial Products, consists primarily of Caterpillar Financial Services Corporation, Caterpillar Insurance Holdings, Inc., Caterpillar Power Ventures Corporation and their respective subsidiaries.

Shares of Caterpillar dropped $0.88, or 2.67%, to $32.12 per share in early trading.