Please ensure Javascript is enabled for purposes of website accessibility

Stock Markets Mostly Lower as GE Nears 30-Year Lows, Kodak's Winning Streak Ends

By Dan Caplinger – Jul 30, 2020 at 5:20PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Nasdaq still managed to outpace the rest of the market.

There are a number of things that investors are nervous about, but that hasn't stopped stock market benchmarks from remaining relatively strong even in the face of uncertainty. The Dow Jones Industrial Average (^DJI 2.66%) and S&P 500 (^GSPC 2.59%) were lower on Thursday, but they finished well off their lows of the day. The Nasdaq Composite even managed to gain ground for the day.

Today's stock market

Index

Percentage Change

Point Change

Dow

(0.85%)

(226)

S&P 500

(0.38%)

(12)

Nasdaq Composite

+0.43%

+45

Data source: Yahoo! Finance.

A variety of factors held stocks back on the day. General Electric (GE 2.73%) was down sharply, nearing the 30-year lows that it set earlier this year. Meanwhile, Eastman Kodak (KODK 1.96%) wasn't able to sustain its winning streak, but the stock remains at highly elevated levels even after today's modest decline.

Powering down?

General Electric shares were down another 5%, marking its second straight day of significant declines. The once-mighty conglomerate is now just a shadow of its former self, and investors aren't sure whether GE can get itself turned around successfully.

The stock's two-day loss comes in the aftermath of General Electric's Wednesday release of second-quarter financial results. Losses were significantly worse for the period than investors had thought likely, and although revenue was somewhat better than feared, a 24% decline still wasn't exactly good news for the ailing former Dow Jones Industrials component.

Wind turbine with GE logo on the side.

Image source: General Electric.

Unfortunately, things don't appear like they're getting better for GE. The company's free cash flow in its industrial segment came in at a whopping negative $2.1 billion. Orders were down 38%, signaling a slowdown in future work as well.

General Electric is going through a massive restructuring, in which it expects to sell its remaining stake in oil services company Baker Hughes (BKR 6.30%) in the next few years. Yet none of its segments are doing well, with aviation sales lower by 44%, healthcare falling 21%, power off 11%, and renewable energy easing downward by 3%. Until there's a turnaround in at least some of its businesses, GE is poised to break further and threaten to set a new multi-decade low point for the stock.

A pretty picture

Elsewhere, Eastman Kodak shares dropped more than 10% on Thursday. That gave up a portion of its gains over the past several days, but the stock remains far above where it was just a week ago.

Kodak's gains came as the company known for photographic innovation made a surprise announcement. The Rochester, N.Y.-based Kodak received a federal government loan for $765 million, with the directive to manufacture active pharmaceutical ingredients under the Defense Production Act. The idea is to use Kodak plants and equipment in Minnesota to produce essential ingredients in order to ensure a reliable supply amid growing geopolitical tensions abroad.

Critics of the move argued that existing pharmaceutical companies could use funding more effectively to produce the requested materials. Yet it's likely that politics are at play, and using a company outside the traditional pharmaceutical space is a loud warning for Big Pharma giants seeking to protect high-margin drug sales.

With the stock having traded between $1.50 and $4 per share for most of the past two years, the recent jump to as much as $60 per share has shown once again the inefficiencies of the stock market. Shareholders can expect plenty of volatility to continue until more is known about the government deal and whether Kodak can build on its success in its newest venture.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

General Electric Company Stock Quote
General Electric Company
GE
$63.60 (2.73%) $1.69
Eastman Kodak Stock Quote
Eastman Kodak
KODK
$4.68 (1.96%) $0.09
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$29,490.89 (2.66%) $765.38
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$3,678.43 (2.59%) $92.81
Baker Hughes Company Stock Quote
Baker Hughes Company
BKR
$22.28 (6.30%) $1.32

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
326%
 
S&P 500 Returns
102%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.