Midday Update: Stocks Advance on GE Divestment, Share Buyback Plans

Buoyed by General Electric ( GE ) Friday announcing plans to shed its finance unit and buy back $90 billion of its shares, U.S. stocks were higher for a third consecutive day. The Dow Jones Industrial Average - led by component company GE - was trading at its best level in more than two weeks while the S&P 500 was flirting with psychological resistance at 2,100.

Stocks were mostly unchanged in pre-market action, struggling to find direction after hawkish comments from Richmond Fed President Jeffrey Lacker extinguished early attempts at a third day higher. Lacker reiterated remarks made earlier this week the "case for raising rates will remain strong at the June meeting" unless the economic data shows otherwise.

But GE's decision to sell the bulk of GE Capital along with $26.5 billion worth of office buildings and commercial real estate debt, and return $50 billion to investors by buying back GE shares gave equities a shot-in-the-arm, driving all three benchmark indices higher at the open.

Today's economic data had little impact on equities, with import prices falling 0.3% during March due to the soaring value of the dollar, matching expectations. Export prices rose by only 0.1% versus the consensus for a decline of 0.2%.

European equities put in a very solid performance with most indices hitting 15-year highs on continued accommodation efforts by the European Central Bank, Greece's loan payment to the IMF and recent mergers in the pharmaceutical sector. Germany's DAX led the pack higher with a gain of almost 2%, following by a 1% advance in the UK's FTSE-100.

Crude oil was up $0.60 to $51.39 per barrel. Natural gas was up $0.01 to $2.54 per 1 million BTU. Gold was up $12.50 to $1,206.10 an ounce, while silver was up $0.31 to $16.49 an ounce. Copper was up $0.02 to $2.75 per pound.

Among energy ETFs, the United States Oil Fund was up 1.11% to $18.23 with the United States Natural Gas Fund was up 0.12% to $12.77. Amongst precious-metal funds, the Market Vectors Gold Miners ETF down 0.68% to 21.56 while SPDR Gold Shares were up 1.0% to $115.82. The iShares Silver Trust was up 1.55% to $15.75.

Here's where the U.S. markets stand at mid-day:

NYSE Composite Index up 39.15 (0.35%) to 11,104.54

Dow Jones Industrial Average up 69.43 (+0.39%) to 18,028.16

S&P 500 up 8.39 (+0.40%) to 2,099.57

Nasdaq Composite Index up 14.72 (+0.30%) to 4,989.29


Nikkei 225 Index down 0.15%

Hang Seng Index up 1.22%

Shanghai China Composite Index up 1.94%

FTSE 100 Index up 1.06%

CAC 40 up 0.60%

DAX up 1.71%


NYSE Energy Sector Index up 0.46%

NYSE Financial Sector Index down 0.05%

NYSE Healthcare Sector Index up 0.62%


(+) QTM (+25.17%) Reported better-than-estimated profit and revenue for the fiscal fourth quarter

(+) EXL (+14.31%) To be acquired by Blackstone Property Partners ( BX ) for approximately $2 billion

(+) GE (+8.03%) Plans to divest GE Capital, $50 billion share buyback


(-) EXTR (-24.85%) Expects Q3 sales in the range of $117 to $119 million, below its prior guidance of $129 to $139 million and the analyst consensus of $135 million on Capital IQ.

(-) CERE (-16.80%) Fiscal Q2 loss per share narrows, revenue declines year over year

(-) ANGO (-8.11%) Q3 EPS, revenue misses estimates, FY15 sales guidance reduced

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2016 All rights reserved. Unauthorized reproduction is strictly prohibited.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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