Wednesday morning didn't bring big moves for the major benchmarks, as market participants seemed to focus their attention on key events expected later in the day. Between impeachment hearings, testimony from Fed Chair Jerome Powell, and ongoing tensions over U.S.-China trade, investors were content to let stocks tread water. As of 11 a.m. EST, the Dow Jones Industrial Average (DJINDICES:^DJI) was up 22 points to 27,713. The S&P 500 (SNPINDEX:^GSPC) rose 1 point to 3,093, but the Nasdaq Composite (NASDAQINDEX:^IXIC) moved lower by 6 points to 8,480.
General Electric (NYSE:GE) has moved sharply higher in November, but today, shares gave up a bit of ground after a key analyst weighed in on the recent stock price action. Meanwhile, Nike (NYSE:NKE) decided to end a sales experiment with Amazon.com (NASDAQ:AMZN), with implications for both companies going forward.
Has GE risen for the wrong reasons?
Shares of General Electric were down almost 2% as shareholders weighed comments from a prominent Wall Street analyst. J.P. Morgan gave a downbeat view on the conglomerate in a research note, throwing cold water on bullishness following GE's latest quarterly report.
J.P. Morgan is skeptical that things have improved for General Electric as much as others seem to believe. Rather than thinking that improved forecasts for the near future indicate true fundamental business strength, the analyst instead believes that a downtick in the amount GE will have to spend on restructuring will be the primary force in pushing earnings higher.
That view contradicts what more bullish investors seemed to conclude following the report. In addition to restructuring costs, GE also cited improvements in supply chain finance, favorable timing-related factors in the aviation segment, and strength in healthcare for a boost in guidance for free cash flow.
Today's decline only gave back a fraction of the gains that GE's stock has seen over the past couple of weeks. Investors will likely have to wait until the conglomerate's next read on earnings in January before they'll get confirmation of their views, positive or negative.
Nike takes its shoes and goes home
Shares of Nike rose 1% following news that the athletic shoe giant will end its direct sales of footwear and athletic apparel on Amazon.com's marketplace. The move reverses Nike's 2017 decision to try out making its products available on the e-commerce king's website.
Nike explained the change, saying that it wants to "focus on elevating consumer experiences through more direct, personal relationships." The company did say, though, that it expects to continue working with retailers, both in-store and via online platforms, to make sure customers have access to its products.
The move highlights some of the challenges that Amazon has had in appealing to major retailers. On one hand, Amazon represents a huge potential market for companies like Nike. Yet the abundance of third-party retailers essentially competing with Nike to sell its products can be an obstacle.
For Nike, e-commerce will remain an important element of its direct-to-consumer segment, and new CEO John Donahoe's experience with online selling should be an asset in its efforts. Investors seem comfortable with Nike's move, and it'll be interesting to see what immediate impact it has on sales for the holiday season.