Stock Market Today: Why GE and Honeywell Are on the Move

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) has gained 10 points in premarket trading, suggesting a flat start to the stock market today after yesterday's nearly 1% loss. With geopolitical risks in focus, world indexes mostly fell overnight, but the selling was muted. European stocks were down just 0.3% as of 9 a.m. EDT, while Asian markets ended flat.  

Meanwhile, earnings season is giving investors plenty of fresh information to digest. GE (NYSE: GE  ) and Honeywell (NYSE: HON  ) stocks are on the move today after delivering their quarterly numbers.

GE this morning met Wall Street's profit and sales expectations, as second-quarter earnings improved 8% year over year to $0.39 a share. Revenue ticked higher by 3% to $36.2 billion. Consistent with recent trends, sales in its industrial business gained 7%, more than offsetting lower results out of GE Capital. In a press release, CEO Jeff Immelt highlighted the company's profitability growth (operating margin improved by 0.2%) and said that the overall business environment "continues to be generally positive."

GE also announced that its spinoff of its North American retail finance business, Synchrony Financial, will happen at the end of this month. And the company's deal to buy Alstom's power and grid business should start contributing to profits beginning in 2016. GE stock was up 0.9% in premarket trading.

Honeywell today posted 6% quarterly sales growth as revenue improved to $10.3 billion. Adjusted earnings rose to $1.37 per share, up 12% year over year and slightly above analysts' expectations. Each of Honeywell's business lines expanded profits this quarter, led by a 33% operating gain in the transportation systems unit. That division benefited from strong global demand for automobile production. Almost all of Honeywell's divisions kicked in higher sales as well, with the aerospace unit lagging the rest by posting flat revenue growth.

CEO Dave Cote said in a press release that Honeywell benefited from "continued momentum across the portfolio" and that management is now seeing some "favorable macro trends" that are helping results. Consequently, the conglomerate raised its full-year targets for profitability and earnings while narrowing its sales growth guidance. Honeywell's stock was unchanged in premarket trading.

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Demitrios Kalogeropoulos

Demitrios covers consumer goods and media companies for, as well as broader moves in the economy.

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9/4/2015 4:30 PM
^DJI $16102.38 Down -272.38 -1.66%
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Honeywell Internat… CAPS Rating: ****