The Dow Jones Industrial Average (INDEX: ^DJI) finally ended its losing streak today, rising over 70 points for its biggest gain in two weeks. Investors seemed to be pleased with Spain’s ambitious plans to cut its debt, including a 2013 budget packed with aggressive reforms.
Also helping push up stocks today was an announcement by the Labor Department that the U.S. economy probably created 386,000 more jobs in the year through March than it had previously predicted. Finally, speculation that China could further stimulate its economy helped push stocks up early from the opening bell.
Let’s see how all three major U.S. indices fared on the day:
|
Index |
Change |
Ending Value |
|---|---|---|
| Dow Jones Industrial Average | 72.46 [0.54%] | 13,485.97 |
| Nasdaq (INDEX: ^IXIC) | 42.90 [1.39%] | 3,136.60 |
| S&P 500 (INDEX: ^GSPC) | 13.83 [0.96%] | 1,447.15 |
Looking at individual stocks, General Electric (NYSE: GE) was the Dow’s biggest winner today, rising 2.85%. The mega conglomerate increased its industrial revenue growth forecast up to 10%, the top end of its previous 5% to 10% estimate. Importantly, Jeffrey Immelt, CEO of the industrial bellwether, didn’t sound pessimistic about the U.S. economy, and said that demand in China has been "not that bad." GE stock hit a 52-week high today, and for good reason. Immelt’s strategy of focusing more on GE’s industrial businesses, and reducing risk at GE Capital, is already paying dividends -- in the form of a $4.5 billion special dividend from GE Capital to the parent company, and 30% of earnings, thereafter.
Outside the Dow, Research in Motion (Nasdaq: RIMM) reported rare good news after the bell, beating second quarter expectations, despite losing $0.27 operating earnings per share. That’s significantly less than the $0.46 that analysts were expecting. Investors responded by bidding RIM shares up a whopping 20% in after-hours trading. But this remains a company with serious flaws, including its rapidly declining U.S. market share. Despite the ‘good’ news today, this is still a company that long-term investors should be very wary of.
But what about GE as a long-term investment? Certainly the recent financial crisis struck a blow, but management took advantage of the market's dip to make strategic bets in energy. If you're a GE investor, you need to understand how these bets could drive this company to become the world's infrastructure leader. At the same time, you need to be aware of the threats to GE's portfolio. To help, we're offering comprehensive coverage for investors in a premium report on General Electric, in which our industrials analyst breaks down GE's multiple businesses. You'll find reasons to buy or sell GE, and you'll receive continuing updates as major events unfold during the year. To get started, click here now.
