September 21, 2012
It says a lot about the current state of affairs in the investing world when rallies seem to come anytime a country or company admits that it needs a bailout. Today's gains for stocks come on reports that Spain is trying to come up with a package of reforms that it will use as leverage in an expected request for eurozone bailout money. Pension freezes and a rising retirement age could create a big economic hit in the short run, but investors seem to love the idea, as stocks in Europe are moving higher. Closer to home, the Dow Jones Industrials (INDEX: ^DJI ) were up about 40 points just after 10:45 a.m. EDT.
General Electric (NYSE: GE ) gained about 1% despite new regulatory requirements that will require airlines to inspect GE engines installed on Boeing (NYSE: BA ) 787 and new 747 aircraft every 90 days. As the National Transportation Safety Board said in recommendations last week, GE's new GEnx engine has had parts failures in three separate incidents in the past few months. The inspections will focus on detecting cracks or fractures that could cause similar incidents in the future. Boeing was unchanged in early trading.
Hewlett-Packard (NYSE: HPQ ) fell another 0.8% after a late drop yesterday afternoon. A Senate reported cited HP's cash management practices in connection with its probe of corporate-tax loopholes. If budget issues force the U.S. government to take measures to rein in legal U.S. income tax avoidance, then HP certainly will be far from the only company that could have to pay much higher tax.
Finally, Verizon (NYSE: VZ ) was up 0.3% in the shadow of today's long-awaited release of the iPhone 5. Concerns still linger about whether high subsidies will eat up most of the profit potential from the popular smartphone, but Verizon's ongoing attempts to lure customers into more profitable plans and limit smartphone subsidies should bear fruit in the long run.
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