Stock Retreat as GE Drags on Dow
Stocks got a quick pop Thursday from the Philadelphia Federal Reserve report on regional manufacturing but turned negative as General Electric dragged on the Dow.
General Electric shares , which have rallied through key levels this week, started the day at the top of the Dow pack but soon tumbled to the bottom following news that Vivendi Universal — not only isn't likely to buy NBC Universal, but — may sell its stakein the unit, which is the parent of CNBC.
GE, Travelers and Alcoa were the bottom three, in terms of percentage decline, on the Dow.
Industrials and financials once again led the Dow, with Caterpillar, Bank of America and United Technologies at the top of the pack.
FedEx shares skidded after the economic bellwether reported earnings in line with estimates but said revenue fell 27 percent and fuel costs took a toll on earnings. The package-delivery giant also said it will raise rates by about 6 percent.
In the day's economic news, the Philadelphia Fed said its manufacturing gauge rose to 14.1in September from 4.2 in August, registering its first back-to-back monthly gain since October and November of last year.
Initial jobless claims unexpectedly fell last week, dropping by 5,000, but the number of people remaining on benefit payrolls continued to rise.
Homebuilders rallied after a report showed housing starts and permits rose in August to their highest level since November amid an increase in multifamily homes.
Hovnanian and Beazer were up more than 4 percent.
Kodak said it plans to raise $700 million, including a commitment from private-equity firm Kohlberg Kravis Roberts, to boost its balance sheet and free up cash for investments.
Oracle hit its earnings target in a report after the bell Wednesday but sales fell short of expectationsas businesses remain a little gunshy on tech spending.
Citigroup shares rallied once again. The stock bounced back Wednesday after a sharp selloff in the previous session following news that the government may withdraw some of its 34-percent stake in the firm and that Citi might launch a $5 billion secondary offering.
US Bancorp got a boost after Rochdale analyst Dick Bove raised his rating on the stock to "buy" from "neutral," saying the bank could gain market share from struggling competitors.
"Competitors are weakening as they deal with loan problems. This is creating a vacuum in the market allowing banks with bold programs to grab market share," Bove wrote in a note to clients.
Immunogen said it licensed its technology to develop anticancer drugs to Amgen. Immunogen will get a $1 million payment up front and milestone payments of up to $34 million on future royalties.
Elsewhere, Synovus, a Columbus, Ga.-based bank holding company, priced a public stock offering at $4 a share and expects proceeds of $600 million, nearly double an estimate from earlier this week.
Meanwhile, the probe into the financial crisis begins in earnest Thursday as a fact-finding panel will hold its first meeting. The Obama administration will be closely watching the panel’s findings in the hope of gaining ammunition to use for its push to tougher regulation.
And the first sale of toxic assets to a private entity took place, in a test of the government’s program to clean up bank balance sheets by selling troubled loans. Texas-based mortgage servicer Residential Credit Solutionsis the first buyer of a stake in a portfolio of residential mortgage loans fromFranklin Bank, a Texas bank that failed last year, according to the Federal Deposit Insurance Corp.
The major indexes hit new highs for the year at the close Wednesday, adding to a strong performance for stocks over recent weeks.
Asian stocks closed broadly higher with Chinese, Japanese and Hong Kong stocks surging ahead. European stocks were also broadly higher.
The price of gold remained relatively high, with the spot price holding above $1,020 per troy ounce, as the dollar remained on the backfoot.
Still to come:
THURSDAY: SEC panel on flash trading
FRIDAY: Quadruple witching
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