Immigrant Son

IMMIGRANT SON – Breaking News, Provocative Stories, Global Economic Analysis

Stocks Rally After GE Chief Says They Can Withstand Loan Defaults

US Session Key Developments

  • General Electric Can Withstand Loan Defaults
  • Housing Data Surprises to the Upside
  • Alcoa Slashes Dividend 82% to 3 Cents Per Share

Stocks Rally After GE Chief Says They Can Withstand Loan Defaults

Wall Street celebrated St. Patrick today by finishing the trading session deep in the green after General Electric’s Chief Executive Officer Jeffrey Immelt stated that the company had sufficient reserves to withstand loan defaults. The comments come as a relief after the conglomerate slashed its dividend three weeks ago for the first time since the Great Depression. Surprising Housing and Producer Price data surprised to the upside, leaving traders in an upbeat mood. The prices that manufacturers pay for raw materials rose 0.2% when excluding food and energy with economists expecting the figure to rise by only 0.1%. With these costs now higher, taxable income deteriorates, which in turn allows companies to be more profitable. Sentiment continued its upward trend after housing starts unexpectedly rose 22% in February. As such, KB Home, the fourth-largest U.S. homebuilder advanced 9.3% along with Home Depot, which rose 6.7%. The blue chips could have performed a bit stronger had it not been for an 82% dividend slash from Alcoa, the largest U.S. aluminum maker and a member of the Dow 30, which brought its quarterly cash payout to only 3 cents per share. Nonetheless broader optimism led Financials to perform the strongest. JPMorgan, Wells Fargo, and Citigroup all moved ahead by more than 7.0%.


Dow 30            7395.70         +178.73           +2.48%

The Dow fell in the minutes after opening bell only to rally from thereon. It closed near the day’s high with only one sector finishing the day down, Materials. The sector’s performance is not of particular surprise considering Alcoa’s stock tanked 8.66% after it slashed its dividend by 82% to 3 cents per share.

NASDAQ         1462.11           +58.09              +4.14%
NASDAQ stocks performed the strongest with Information Technology rallying 4.25%. Apple rallied 4.44% after it had let developers preview a beta of the iPhone OS 3.0, which includes cut and paste features and automatic updates.

S&P 500          778.12            +24.23              +3.21%

S&P 500 stocks saw every sector in the index rally by at least 1.74% with Financials surging 6.58%. General Electric was one of the most active stocks, trading 22.74 million shares after its CEO announced that it had adequate capital reserves to withstand loan defaults. The VIX fear gauge couldn’t find enough momentum to fall below the 40 mark; nonetheless it dropped 6.7% to 40.80. Overall, 476 stocks rose with only 24 finishing the day down.

Advertisements

Filed under: Stocks, , , , , , , , , , , , , , , , , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

RSS Immigrant Son Feed

  • An error has occurred; the feed is probably down. Try again later.
%d bloggers like this: