Stocks rose Wednesday after testimony from Federal Reserve Chair Janet Yellen left investors feeling optimistic. The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) both gained over half a percentage point, with the Dow hitting an all-time high.
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The real estate sector was strong today, and the iShares US Real Estate ETF (NYSEMKT:IYR) gained 1.6%. Tech stocks also had a big day; the Technology Select Sector SPDR ETF (NYSEMKT:XLK) closed up 1.3%.
As for individual stocks, shares of NRG Energy (NYSE:NRG) jumped sharply on a restructuring announcement, and PayPay Holdings (NASDAQ:PYPL) gained on news of an expanded relationship with Apple (NASDAQ:AAPL).
NRG's ambitious restructuring
Shares of utility giant NRG Energy soared 29.4% after the company announced a restructuring plan. It's aiming to divest up to $4 billion in assets, slash expenses, and reduce debt on the balance sheet by 67%.
The restructuring comes after activist investors acquired a 9.4% stake in the NRG earlier this year and put pressure on the company to sell assets and improve business performance. NRG will divest itself of 50% to 100% of its interest in its yieldco subsidiary NRG Yield, Inc., as well as about 6 gigawatts of its conventional generation capacity (about 13% of its total). It also plans to find $855 million in savings from cost-cutting and margin enhancements.
Between the operational savings, asset sales and divestitures, and resolution of chapter bankruptcy of its GenOn subsidiary, NRG expects to take a whopping $13 billion of debt off its balance sheet and increase free cash flow by more than 50%, resulting in $6.3 billion in new cash through 2020.
CEO Mauricio Gutierrez said in the press release, "This plan is the result of a comprehensive review of our entire business by the board and management to simplify our business, right-size our portfolio and strengthen our balance sheet to create significant value for all our stakeholders."
Investors embraced the plan and gave Gutierrez, who was promoted to his role 19 months ago, a strong vote of confidence.
PayPal to take a bite of Apple customer transactions
Digital payments specialist PayPal saw shares set an all-time high today on news of an expanded partnership that will allow Apple customers to pay for products and services using their PayPal accounts across platforms. The stock rose as much as 4.9% during the day, ultimately closing up 3.3%.
PayPal will appear as a payment option on Apple ID accounts, allowing users to set it up as the method of payment across Apple services on iPhones, iPads, computers, Apple Watches, and Apple TV -- including iTunes, the App Store, iBooks, and iCloud. Once set up, all Apple purchases will be made using PayPal's One Touch checkout feature. The feature is being rolled out in the U.S., the U.K., Canada, Mexico, Australia, Austria, France, Germany, Israel, Italy, the Netherlands, and Spain.
PayPal has been available as an option on iTunes for computers in the U.S. for some time now, but the agreement to make it an Apple ID option across all of the tech titan's services and devices will no doubt drive a lot of new transactions. The broader geographical availability also is a big win for PayPal, which views international expansion as a major opportunity.
Apple Pay may be seen as a competitor to PayPal, but the latter is clearly not too concerned about its frenemy status and stands to benefit from expanding the relationship.
Jim Crumly owns shares of Apple and PayPal Holdings. The Motley Fool owns shares of and recommends Apple and PayPal Holdings. The Motley Fool owns shares of NRG Energy. The Motley Fool has a disclosure policy.