Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Market Recap: GE Drops the Bulls

By

Few stocks survived today's beating.

PrintPRINT
Bellwether General Electric (GE) set a negative tone for the trading session. The Dow Industrial fell -256 points, or -2.04% to 12329, the S&P 500 lost 27 points, or -2.04% to 1332, and the Nasdaq Composite dropped -61 points, or -2.61% to 2290.

Stocks tanked on the opening after GE reported earnings for the first quarter. The manufacturing conglomerate said profits came in at $0.44 per share, $0.07 worse than consensus estimates of $0.51. Revenues rose 7.8% on a year-over-year basis to $42.24 bln vs. $43.68 bln consensus. The company also issued downside guidance for 2Q with EPS in the range of $0.53-0.55 per share vs. estimates of $0.58. While demand for the global infrastructure business was strong, the primary shortfall was due to a decline in financial services earnings. Further extraordinary disruptions in the capital markets in March affected the company's ability to sell assets and resulted in higher mark-to-market losses and impairment. Shares of GE plummeted -12.79% to $32.05. See Minyanville Editor Andrew Jeffery's column Financial Services Drag Down GE.

Although the market seemed blindsided by the GE news, Professor Jeffrey Cooper didn't seem too surprised. "…Why is the market so stunned by GE's report? After all it's a large financial as well as industrial. An unprecedented disappointment? Hey, this whole financial crisis has been more than a bump in a road. Who in the financials has been immune? Where was the negative guidance? Apparently the "miss" just snuck up on the conglomerate. To quote GE, "It is what it is."

For another perspective, read Toddo's Clues To the Fuse.

Few stocks withstood today's beating. On the Big Board and Nasdaq, the decliners outpaced the advancers 4 to 1. Notable decliners in the tech space include Apple (AAPL) -4.75% to $147.17. Research in Motion (RIMM) fell -3.6% to $116.29, Google (GOOG) dropped -2.38% to $457.70. See Toddo's Freaky Friday Potpourri.

Professor Jon Markman spoke of another space affected by the financials, the aircraft lessors: "AirCastle (AYR), AerCap (AER), and Babcock & Brown (FLY). They buy planes on credit and then they repackage those leases as asset-backed securities. To the extent that no one is buying the ABS's, their business is NOT GOOD. It's like running an ice cream truck but all your popsicles have melted. The really don't have anything to sell. They still have a truck but the inventory is a big sloppy mess.

If GE and Lehman (LEH) are saying they can't sell ABS, how is anyone else going to be able to. "

AYR closed -3.8% to $13.36, AER fell -7.06% to $18.29, and FLY hit a new 52 week low to settle -5.65% to $13.38.


In commodities, crude oil gained +0.18 to 110.29. Gold finished -4.70 to 923.60. Silver lost -0.278 to 17.765, and copper gained +2.05 to 397.45.

The dollar index closed -0.324 to 71.793.

For more Buzz insight, check out Minyanville's Buzz Bits.

Below is a recap of some of the idea flow on today's Buzz & Banter. Please note that stocks may appear in both bullish and bearish categories, due to long and short term trades by our many Minyanville professors.

Some bullish trade or investment ideas: SPX, QQQQ, GS, FDRY, GOOG, GS, RIMM, GEX, WB, ANF, WMT, COST, HD, XLF, IYT, NBIX, RIMM, AAPL, CCJ, GEF, FFIV, PG, WB, DNA

Some bearish trade or investment ideas: GE, MAN, CTCM, AER, AYR, FLY

Be safe, Minyans! Have a great weekend!
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE