Please ensure Javascript is enabled for purposes of website accessibility

Why General Electric Stock Bounced Back Today

By Rich Smith - Jul 20, 2021 at 2:39PM

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

What went down just went back up.

What happened

Industrial behemoth General Electric (GE 0.94%) couldn't fight the tide yesterday. As Wall Street sold off on worries of a reinvigorated, Delta variant-fueled COVID-19 pandemic that would devastate demand for air travel -- and airplane engines -- shares of General Electric sold off as well. Remember, General Electric used to depend on sales of airplane engines to provide as much as 35% of its revenues.

But today is a new day. Investors seem to have gotten over their worries about COVID-19 (again). And General Electric stock is moving higher again -- up 4.7% in 2 p.m. EDT trading.

Smiling flight attendant talks to an airplane passenger while standing in the aisle.

Image source: Getty Images.

So what

This story really is as simple as that. There's no other news "moving" General Electric stock today.

All that is happening is that, yesterday, investors were worried that people would give up flying again, and that airlines would cancel flights and stop buying airplanes (and airplane engines). So GE stock fell 4.4%. Today, they've stopped worrying -- and so GE stock is up 4.7%.

Now what

Is this good news or bad news? Actually, I think it's both. It's bad news because investors are acting flightily (if you'll pardon the pun), and there's no guarantee they won't revert to worrying about the sudden evaporation of airline travel again tomorrow.

But the good news is that, worries notwithstanding, studies still show that vaccination is an effective proof against COVID-19. Even the Delta variant, it turns out, can't get by Pfizer's vaccine, which has proven 96% effective at preventing disease serious enough to require hospitalization and 88% effective at preventing any sort of symptomatic coronavirus disease.  

As long as those kinds of numbers hold true, I think the revival in air travel will continue, and with it, the revival of GE's airplane engine business, too.

Rich Smith 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
$74.36 (0.94%) $0.69

*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
377%
 
S&P 500 Returns
123%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/08/2022.

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.