Dow Futures Rise as GE Preps a Major Spinoff

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

Good riddance, August. Stock index futures as of 7:20 a.m. EDT indicate the Dow Jones Industrial Average (DJINDICES: ^DJI  ) will open marginally higher on this last trading day of the month, up by 14 points. Still, barring an economic miracle, the Dow will finish August well below where it began, at 14,848. Markets in Europe are trading down despite new data showing that eurozone economic confidence spiked, pointing to a recovery that is gaining momentum.

Closer to home, General Electric (NYSE: GE  ) wants out of the consumer credit business. The Wall Street Journal reports this morning that the conglomerate is preparing to spin off that component of its capital-lending division through an initial public offering.

Consumer credit was the second biggest piece of GE's lending division last year, responsible for $15.5 billion of the group's $43 billion in revenue. The consumer business was also worth $3.2 billion in profit last year. Still, both profit and sales have fallen in recent years as consumers have focused on paying down credit cards and lowering their overall debt burdens since the financial crisis. GE investors welcomed the news of the spinoff: Shares are up 1.7% in premarket trading.

Outside the Dow, Salesforce (NYSE: CRM  ) should see active trading today after the software company reported a 31% spike in revenue and said that it expects to achieve its first $1 billion sales quarter next quarter. It also booked a surprise profit, thanks to a tax adjustment, but projected a net loss for the full year of about $0.43 a share. The stock is up 8.5% in premarket trading.

Big Lots (NYSE: BIG  ) also reported earnings this morning that were ahead of Wall Street's expectations. The closeout retailer earned $0.31 per share in profit last quarter, beating the high range of the guidance it gave investors back in spring. Comparable sales fell by 2.2% companywide, but they were 8% higher in the company's fledgling Canadian region. Shares are up 3.8% in premarket trading.

As for economic news, Chicago PMI figures are set for release at 9:45 a.m. EDT. Expectations are for a rise from 52.3 in July to 53 this month, indicating slightly stronger growth and continued expansion. Investors will also get a final reading on consumer confidence for the month at 9:55 a.m EDT. That figure is expected to come in at 80, consistent with a steadily recovering consumer.

GE may be stepping away from the banking business, and investors have also avoided big banking stocks after the crash. But the sector has one notable stand-out. In a sea of mismanaged and dangerous peers, it rises above as "The Only Big Bank Built to Last." You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.


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