General Electric Falls as the Dow Drops Back

The Dow declines from its recent records as Regeneron takes a big hit.

Jun 23, 2014 at 2:30PM
Daily Fool

The market has dropped back from its record-setting levels of late to open the week, with the Dow Jones Industrial Average (DJINDICES:^DJI) 25 points in the red as of 2:35 p.m. EDT and most blue-chip stocks falling. General Electric (NYSE:GE) dropped 1.1% to the bottom of the Dow after a major acquisition. Outside the Dow, biotech stock Regeneron (NASDAQ:REGN) has been unable to shake off a poor past month. Let's catch up on what you need to know.

Different results for China, Europe
Wall Street started the day with a positive report from manufacturing in China. The HSBC/Markit initial purchasing managers' index in Asia's largest market climbed to 50.8 for June -- nearly a full point above the neutral level of 50 that indicates neither expansion nor contraction in manufacturing, and far above May's 49.4 grade. New orders in the sector jumped for the month, showing that demand is on the rebound in an economy that has struggled to keep growth on track. China's GDP disappointed with a poor 7.4% growth showing in its first quarter, so even with today's result, many economists believe Beijing will need to become more aggressive in its support of economic growth.

Italy Eu Flag

Source: Wikimedia Commons.

Across the Atlantic, however, Europe's ongoing sluggishness piled on the pain for investors today, as the eurozone's PMI declined by nearly a full percentage point from May to June. While Europe's 52.8 mark is still showing expansion across the hard-hit continent, the EU can scarcely afford to let momentum slip away. Germany's strong export-driven economy continues to prop up a number of markets clinging to economic hope, particularly on the European periphery. That's certainly evident in the future growth picture: While economists believe Germany's GDP will climb by 0.7% in the second quarter, neighboring France could be in for a disappointing result given the country's disappointing PMI results this year. Until Europe sees more consistent growth outside of its strongest economy, investors should stick to the reliable German market for gains.

Back in the U.S., General Electric has been the story of the day among blue-chip stocks. GE topped a team of competitors in winning the race to buy the energy business of French company Alstom for $17 billion. One of GE's biggest motivations in the deal looks to be expanding its energy footprint in Asia and Africa, measures to capitalize on emerging economies in order to keep growth churning higher in this business.

GE's power and water division has been among its best units in terms of growth lately, ranking as the conglomerate's second-largest division by revenue while notching 14% year-over-year sales growth in its most recent quarter. If GE can continue to record respectable growth in its largest groups such as power and water and aviation -- the latter of which is the company's largest business and also saw 14% growth in its last quarter -- then investors will welcome this strong stock's performance in the long run.

Outside the Dow, Regeneron's stock has shed 3.1% today despite little news from the biotech company. Regeneron investors have watched this promising stock drop off by 6.7% over the past three months. The company's net margin took a big hit in its last quarter, with Regeneron's net income declining by 33% despite a 42% uptick in year-over-year sales. Despite the fall -- and the stock's struggles -- Regeneron's top product, wet AMD treatment Eylea (which the company co-markets with Bayer), continues to look in good shape as drug revenues pick up. With Regeneron looking to expand its approvals for Eylea, this drug -- and this stock -- could be in for better days in the long run.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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