News that House Speaker John Boehner and President Obama have both made significant concessions in their quest to find a resolution to the fiscal cliff helped send stocks modestly higher this morning. The Speaker is now willing to raise tax rates on those making $1 million or more, while the President has offered to raise his original $250,000 threshold, so the odds of a compromise appear much better than in past weeks. That optimism, combined with positive readings on homebuilder confidence and a three-year low in the trade deficit, helped send the Dow Jones Industrials (DJINDICES: ^DJI ) up about 61 points by 10:55 a.m. EST, while other major benchmarks posted stronger gains.
But General Electric (NYSE: GE ) didn't participate in the rally, falling 1.7% as CEO Jeff Immelt reduced guidance for revenue growth at its industrial businesses from 10% to 8%. As Fool contributor Alex Dumortier examined earlier this morning, GE's sales aren't even keeping up with inflation, raising questions about whether the company can grow by other means, such as acquisition.
Boeing (NYSE: BA ) is unchanged despite announcing a 10% dividend increase and resuming share buybacks. The positive news for shareholders was tempered by a decision from Turkey's Pegasus Airlines to make a big order from Airbus. With recent problems plaguing its 787 Dreamliner, Boeing needs to work on its execution in order to woo investors for the long haul.
Finally, Alcoa (NYSE: AA ) and Caterpillar (NYSE: CAT ) both responded favorably to positive economic news, rising more than 1.4% each. Both companies have lagged in light of difficult conditions both in the U.S. and abroad, but a possible resolution to the fiscal cliff could eventually lead to a much-needed turnaround in construction and infrastructure activity. That, in turn, could bolster both companies' prospects for the future.
Is GE's dip a buying opportunity?
It's no big surprise that a slow economy has hurt GE's industrial businesses. But is today the right day to buy GE? Find out in our latest research report on the stock, in which our industrials analyst breaks down GE's multiple businesses and gives you his views on whether the stock is worth investing in at current levels. You'll also receive continuing updates as major events unfold during the year. To get started, click here now.