What Happened in the Stock Market Today

General Electric's shares jumped and Albemarle's fell on a down day for the market.

Jim Crumly
Jim Crumly
Jun 12, 2017 at 5:09PM
Consumer Goods

Stocks finished lower on Monday, with both the Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) losing ground. 

Today's stock market

Index Percentage Change Point Change
Dow  (0.17%)  (36.30)
S&P 500  (0.10%)  (2.38)

Data source:  Yahoo! Finance.

Technology stocks continued the downward trend that started Friday afternoon, with the Technology Select Sector SPDR ETF (NYSEMKT:XLK) losing 0.6%. Gold-mining shares were one bright spot in the market despite slightly lower gold prices, and the VanEck Vectors Junior Gold Miners ETF (NYSEMKT:GDXJ) gained 2.4%.

As for individual stocks, General Electric (NYSE:GE) rose on news of a leadership changes, and shares of lithium supplier Albemarle Corporation (NYSE:ALB) took a break after weeks of steady gains.

Candlestick and bar graph of stock prices

Image source: Getty Images.

GE gets a new CEO

General Electric announced the retirement of CEO Jeffrey Immelt, effective Aug. 1. He will remain chairman until Dec. 31. Replacing Immelt will be John Flannery, a 30-year GE veteran and currently CEO of the company's healthcare unit. The move had been broadly anticipated, but the market apparently like the timing and approved of the choice of successor, with the stock moving up 3.6%.

The market reaction to the announcement was not a ringing endorsement of Immelt's 16-year stint at the helm of the company. Admittedly, he had a tough act to follow, taking over in 2001 for legendary CEO Jack Welch, who built a monumental conglomerate of industrial businesses that led their respective markets and delivered a soaring stock price in the 1990s. The company press release lauded Immelt's accomplishments in slimming down the company to focus on a limited set of key markets, divesting legacy businesses such as GE Appliances, NBC Universal, and Plastics. But in the end, the most important factor in the succession was probably a stock that fell over 25% and underperformed the broader market during his tenure.

Flannery, 55, has been groomed for the top spot with assignments overseas in Asia and Latin America, as well as positions in GE Capital and in corporate business development. Most recently he led GE Healthcare, where he grew revenue by 5% and improved margins during his three-year stint. Given recent weak results, the incoming leader has his work cut out for him, but he also inherits a company for which the market has far lower expectations than it had when his predecessor took over. 

Related Articles

Albemarle pauses to recharge

Shares of specialty chemical maker Albemarle fell 3.7% on no particular news, as the stock appears to be taking a breather from a rapid run-up in 2017. Year-to-date the stock is up 29.2%.

Albemarle is the No. 1 global supplier of lithium, the key ingredient in batteries for electric vehicles, personal electronics, and utility grid storage. Demand for lithium batteries is taking off, driven primarily by launches of new models of electric cars, such as those from Tesla. Lithium comprises 36% of Albemarle's sales, but is the fastest-growing part of its business. Excluding currency effects and divested businesses, the company posted 15% revenue growth in the most recent quarter, but lithium sales grew 31.5%. The results topped analysts expectations and led the company to raise guidance for the year.

Lithium is plentiful in the earth's crust, but only a handful of companies are in the business of digging it out and selling it. Albemarle is adding additional capacity to meet the increasing demand, and should be able to sustain growth for years to come. Investors are taking notice, and today's pullback in the price of Albermarle's stock may be short-lived.