Midday stock picks: Boeing, Bank of America, Unity Software

The stock market is trading at noon after a winning month. The S&P 500 advanced 2.3% for the month of August, marking its fourth consecutive month of gains.

The S&P 500 was down 1.5 percent at midday, while the Nasdaq Composite was down 2.4 percent. The Dow Jones Industrial Average fell 1.1 percent and the Russell 2000 fell 2.4 percent.

Trending Stocks:

The semiconductor sector is down at noon. Nvidia continued to slide after its earnings report, down 8%. Taiwan Semiconductor, Broadcom, ASML and AMD also saw declines ranging from about 5% to 6%.

All Magnificent 7 stocks are lower at midday except Tesla, which added 0.6%.

Analysts upgraded their ratings on Boeing and Unity Software, leading to changes in share prices.

Unity Software’s game engines are used in Pokémon Go, Monument Valley, and Call of Duty: Mobile.

Unity software

S&P 500 Big Stocks Today

Five S&P 500 stocks making big midday moves are:

• Molson Coors drink (TAP.A) +6.2%
• Dexcom (DXCM) +4.7%
• The ultimate beauty (ultra) +3.5%
• Constellation Brands (or grid) +3.4%
• Campbell’s soup (CPB) +3.2%

The five worst-performing S&P 500 stocks with the biggest midday declines are:

• Vistra (VST) -10.2%
• Constellation Energy (CEG) -8%
• KLA Corp (KLAC) -7.8%
• Nvidia (NVDA) -7.8%
• Boeing (nay) -7.7%

Also noteworthy stocks with significant moves include:

• Unity software (u) +4.5%
• Alphabet (GOOGLE) -2.8%
• Apple (AAPL) -2.2%
• Amazon (AMZN) -1.4%
• Microsoft (MSFT) -1.3%

Boeing falls after analysts downgrade

Boeing shares lost 8% after Wells Fargo analyst Matthew Akers downgraded the stock to underweight from equal weight and cut his price target to $119 from $185.

“Boeing has had a generational free cash flow opportunity this decade, driven by increased production on mature aircraft and a reduced need for capital expenditures,” Akers said in a Sept. 3 report. “But after extended delays and additional costs, we now see cash flow from growing production that is in a new cycle of aircraft investment, capping FCF in several years.”

“However, after extended delays and additional costs, we are now seeing an increase in production cash flow that is in a new aircraft investment cycle, limiting free cash flow to several years,” Akers said.

“We see the company’s free cash flow peaking by 2027 as aircraft development costs offset further production growth, and we believe an increase in equity will further dilute the stock,” Akers argued. He sees Boeing raising $30 billion in capital through 2026.

Related: Analyst revises price target on Boeing stock as cash woes persist

Boeing’s balance sheet contains $45 billion in net debt, and paying it off would eat up all of its cash by 2030, according to Wells Fargo.

Bank of America stock went down after Warren Buffett’s selloff

Bank of America shares fell after Warren Buffett’s Berkshire Hathaway disclosed on Friday that it sold more shares last week.

A filing on Friday revealed that Berkshire sold 21.1 million shares on Wednesday, Thursday and Friday for $848.2 million at an average price of $40.24 each.

Related: Warren Buffett’s Berkshire Hathaway just joined the exclusive club

Berkshire is Bank of America’s largest shareholder, but has reduced its stake. Since selling began on July 17, Berkshire has sold shares in 21 of the last 33 sessions. It reduced its stake by 14.5 percent with the sale of 150.1 million shares for $6.2 billion, an average price of $41.33 each, CNBC reported.

As of Aug. 30, Bank of America is Berkshire’s third-largest stock holding, accounting for about 11.4 percent of its portfolio, according to data compiled by CNBC.

Unity Software rises following analyst update

Unity Software rose 10% in morning trade and was up 3.4% at last check. The market move followed Morgan Stanley’s upgrade of the stock to overweight from equal weight, with an unchanged price target of $22.

“We now see clear upside revision potential in Create and greater stability in Grow,” Morgan Stanley analysts said.

The video game software development company is best known for its game engines, which are used in games such as “Pokémon Go,” “Monument Valley” and “Call of Duty: Mobile,” according to the Financial Times.

More Wall Street analysts:

• Analysts reset price target on Grand Theft Auto maker’s stock
• Stock market analyst American Express signals the change in consumer behavior
• Analyst resets Nvidia stock price target ahead of earnings

The company has underperformed the S&P 500 by 80% over the past 12 months, but analysts at Morgan Stanley now view forward estimates for Unity as “risky.”

Morgan Stanley says the company’s game engine maintained a 70% market share on mobile and “proved how deep its moats really are” as competitors failed to gain share at Unity’s expense.

Related: Veteran fund manager sees world of pain coming for stocks