After a brief pause on Monday, the stock market resumed its downward trend on Tuesday. By midday, the old patterns of volatility had reasserted themselves, with small caps and the tech-heavy Nasdaq Composite (^IXIC -1.15%) taking the biggest hits. As of 1:15 p.m. ET, the Dow Jones Industrial Average (^DJI -0.12%) was down 340 points to 34,025. The S&P 500 (^GSPC -0.58%) fell 80 points to 4,330, and the Nasdaq was off 368 points to 13,488.
Blue chip stocks joined the parade of companies releasing their latest earnings results, and a couple of the most well known saw their stocks make very different moves. American Express (AXP -0.31%) made its shareholders happy with its latest news, but General Electric (GE -0.69%) gave up ground and reminded investors that the industrial conglomerate still has a long way to go before it can fully restructure itself.
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AmEx makes a move
American Express saw its stock rise more than 6% on Tuesday. That led all Dow stocks in terms of percentage gains, although its middle-of-the-road share price among the 30 components that make up the average limited its upward influence on the broader benchmark.
The company released fourth-quarter numbers that reassured its shareholders that the sky isn't falling on its business. Record card-member spending led to a 30% jump in revenue to $12.1 billion. Earnings of $2.18 per share were up 24% year over year and outpaced what most investors had expected to see from the company.
AmEx also gave highly favorable guidance for the coming year. The company expects revenue to bounce back between 18% and 20% in 2022. Earnings should be within a range of $9.25 to $9.65 per share for the full year. AmEx also set ambitious long-term goals, wanting to get to a point at which sales consistently rise by double-digit percentages each year and earnings per share rises by percentages in the mid-teens. Shareholders can expect a 20% dividend hike this quarter, with new payouts of $0.52 per share.
Shareholders should notice that American Express did have to set aside $53 million toward credit loss reserves, reversing a year-ago release. Nevertheless, a lot is going right with the company, and the fact that cardholders aren't holding back on spending was welcome news.
GE takes a step back
Elsewhere, shares of General Electric were down almost 7%. GE is no longer in the Dow, and its attempt at a full turnaround has taken longer than many had hoped.
General Electric's fourth-quarter results were mixed. Total revenue fell 3% year over year to $20.3 billion, with industrial organic sales dropping by the same percentage. That disappointed most of those following the stock. However, adjusted earnings of $0.82 per share were up 67% from year-ago levels, providing a favorable counterpoint to the sales figures.
GE's expectations weren't strong enough to satisfy shareholders. Organic revenue is likely to grow by high single-digit percentages in 2022, with profit margin improvement helping to bring earnings in a range of $2.80 to $3.50 per share on an adjusted basis. Much of the strength will stem from the aviation segment, where GE predicts more than 20% segment revenue growth. Yet the company also warned that inflation would have potentially adverse impacts, particularly in the onshore wind power business.
General Electric has seen its stock tread water since 2018, despite ongoing promises for a recovery. Now, investors appear impatient for the conglomerate's planned split-up into three key business segments. Until that happens, it could tough for GE to make much headway.
