Stocks on Wall Street Advance Led by 7% Jump in GE

Nichole Harper
10 Apr, 2015
New York City

Stocks powered ahead on Wall Street and banks are scheduled to release earnings next week. General Electric announced to sell its GE Finance unit and return to shareholders as much as $90 billion by 20108. Asian markets continued to climb higher as indexes in China, India and Japan extend gains.

[R]1:25 PM New York – Stocks powered ahead on Wall Street and banks are scheduled to release earnings next week. General Electric announced to sell its GE Finance unit and return to shareholders as much as $90 billion by 20108. Asian markets continued to climb higher as indexes in China, India and Japan extend gains.[/R]

Stocks on Wall Street traded higher after General Electric announced to sell-off assets in its finance unit, return money to shareholders and shrink its focus to core industrial and engineering businesses.

World markets are going through sharp change in capital flows as the earnings growth in the U.S. slows and valuation remain stretched.

Global investors are piling into European markets and increasing exposures in Asia including Hong Kong, Japan and India.

General Electric said it plans to shrink its focus to core businesses and return $90 billion to shareholders in the next three years and seek to be removed from the list of systematically important financial institution.

GE plans to finance the shareholder return through the sale of GE Cap for $35 billion, decrease outstanding shares to between 8 billion and 8.5 billion in 20108 from 10.6 billion and completion of the spinoff of the Synchrony private label credit card business later in the year.

March import price index decreased 0.3% after declines of 0.2% in February. In March, export prices rose 0.1% following 0.2% fall in February, the Department of Labor said.

On Wall Street trading, Tollbooth Strategy Index slid 0.1% or 13.52 to 10,734.14.

S&P 500 index rose 8.78 or 0.4% to 2,100.04 and the Nasdaq Composite Index gained 15.80 or 0.3% to 4,990.27.

Crude oil in New York increased 53 cents to $51.32 a barrel and gold soared $12.60 to $1,206.20 an ounce.

U.S. Movers

Excel Trust Inc ((EXL)) surged 14.4% or $1.98 to $15.82 after the real estate investment trust agreed to be acquired by Blackstone Property Partners L.P. for $15.85 per share, a premium of about 15% to closing price on Thursday, in an all-cash transaction valued at about $2 billion.

General Electric Company ((GE)) soared 7.5% or $1.93 to $27.66 after the diversified conglomerate said it plans to divest most of its real estate portfolio, GE Capital Real Estate worth about $23 billion to Blackstone Group LP and Wells Fargo & Co in the next two years.

The company plans to divest its financial segment and increase its focus on core businesses, industrial and engineering divisions.

Separately, GE said its board had authorized to set a share buyback plan for up to $50 billion and plans to return to shareholders as much as $90 billion in the next three years including dividends and proceeds from the sale of financing unit.

European Markets

In London trading, FTSE 100 index jumped 0.8% or 57.67 to 7,073.03 and in Frankfurt the DAX index climbed 1.4% or 170.30 to 12,336.74.

In Paris, CAC 40 index increased 0.3% or 16.64 to 5,225.59.

Carrefour SA gained 1.8% to €32.67 after the France-based hyper and supermarkets operator reported sales in the first-quarter ending in March soared 6.2% to €21 billion from a year ago period.

The retailer said domestic sales in the quarter jumped 3.6% to €9.56 billion and sales in international region climbed 8.4% to €11.45 billion from a year ago period.

Suedzucker AG plunged 7.8% to €32.67 after the Germany-based agricultural raw materials maker said revenues in the year ending in February declined 9.3% to €6.8 billion from €7.5 billion a year ago period.

Operating profit in the year tumbled 71.1% from a year ago to €180 million compared to €622 million.

The sugar maker forecasted fiscal 2015 revenues to decline to between €6 billion and €6.3 billion and operating profit to decrease in the range of €50 million to €150 million.

Despite the difficult business environment, the company confirmed operating profit for the first-half of about €550 million.

Asian Markets

Market indexes in Japan participated in Asia-wide rally as global investors shift attention away from the U.S. The popular Nikkei 225 Average briefly traded above 20,000 and the index in the week jumped 2.4%.

Stocks in Tokyo opened higher and market indexes jumped at the opening and scaled higher in the session.

The Nikkei index extended weekly gain and briefly traded above 20,000 as foreign investors join the Bank of Japan, domestic pension funds and domestic investors.

Asian markets have been on tear for the last eight weeks, as the U.S. prepares for a change in rate regime and Japanese government and central bank work in tandem to revive inflation and asset prices.

Markets in Hong Kong also surged and extended year-to-date gain to 14% as mainland investors line up for stocks trading at discounts to Shanghai.

Market indexes in Shanghai have surged more than 90% in the last ten months and Shenzhen A Share index has surged 52% in the year-so-far.

The Nikkei 225 Stock Average fell 30.09 to 19,907.63 and the broader Topix index slid 4.65 to 1,589.54.

For the week, Nikkei 225 climbed 2.4%.

The yen eased to close at 120.39 against a dollar.

Stocks in Mumbai opened slightly higher on the back of positive international news.

Asian markets firmed up and markets in Hong Kong and in Shanghai extended recent rallies and European markets closed higher after Germany reported an increase in industrial production.

Market took a cautious view ahead of the release of industrial production data after the close.

Industrial output growth accelerated in February to 5%, the fastest increase in nine months according to the statistics bureau.

The government is preparing to release new data series based on revised base year and incorporating wider sample size.

Rupee weakened 7 paisa 62.31 against one dollar.

The Sensex Index fell 5.83 to close at 28,879.38. The CNX Nifty added 2.05 to 8,780.35.

For the week, Sensex and CNX Nifty indexes jumped 2%.

Stocks of rating agencies traded at new record highs on the sustained buying from foreign investors.

Credit Analysis and Research Ltd rose 4% to ₹1,808, Crisil Ltd gained 7.8% to ₹2,356 and Icra Ltd soared 12% to ₹4,992.85.

IndusInd Bank Limited added 0.3% to ₹945.50 after the financial services provider controlled by Hinduja family agreed to acquire gold, diamond & jewellery financing business worth ₹4,500 crore or $721.7 million from Royal Bank of Scotland’s India unit.