After waffling between positive and negative territory throughout the session, U.S. stocks ended mixed on Thursday as investors weighed continued trade tensions between the U.S. and China. The Dow Jones Industrial Average (DJINDICES:^DJI) ultimately added around 0.3%, while the S&P 500 (SNPINDEX:^GSPC) edged just into the red.
Today's stock market
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Retail stocks set the pace for today's losers, leaving the SPDR S&P Retail ETF (NYSEMKT:XRT) down 2.7%. Consumer goods stocks helped prop up the broader market, with the Consumer Staples Select Sector SPDR ETF (NYSEMKT:XLP) gaining 0.6%.
As for individual stocks, General Electric (NYSE:GE) popped after a longtime bearish analyst shifted his tone on the industrial conglomerate, and Aflac (NYSE:AFL) rose following reports of a significant new foreign investor in the U.S.-based insurance giant.
A bearish analyst relents
Shares of General Electric climbed 7.3% to $7.20 -- making it the best-performing stock in the S&P 500 today -- after JPMorgan analyst Stephen Tusa upgraded the stock from underweight to neutral. Tusa also reiterated his $6-per-share price target on GE, or a roughly 11% discount from yesterday's close, with the caveat that his models assume an "upside risk" of $8 per share and a downside of $5.
For perspective, Tusa initiated his underweight opinion back in mid-2016 with shares trading above $30 -- before the company endured an ambitious restructuring effort, twice replaced its CEO, drastically reduced its dividend, and was removed from the Dow. Now, however, Tusa says his firm "[sees] a more event-driven, balanced risk reward at current levels."
"Key to the story, in our view, is the outcome of 'known unknowns' in near term, which are better understood and around which debate is more balanced, as opposed to being overlooked by most bulls in the past," Tusa elaborated. "We now believe a more negative outcome on these liabilities (equity dilution is one) is at least partially discounted, and it's possible the company can execute its way through an elongated workout that limits near-term downside."
Aflac's (soon to be) biggest shareholder
Aflac stock gained 6.6% after the Nikkei Asian Review reported Japan Post Holdings will acquire a 7% to 8% stake in the American insurer for roughly 300 million yen (or $2.64 billion). The move comes as part of Japan Post's "strategy to expand overseas businesses amid a shrinking domestic market."
Japan Post is aiming to approve its plan for the deal -- which will be completed through a trust bank -- by the end of this month.
After the investment is made, Nikkei says Japan Post hopes to expand Aflac cancer insurance products already sold at its post offices under an agreement formed five years ago. Japan Post also wants to jointly create new products and collaborate on asset-management initiatives with Aflac going forward.
Per Aflac's shareholder rules, Japan Post could increase its stake to as much as 20% in four years, which would easily make it the company's single largest shareholder.