While you were sleeping: GE again leads Wall St drop

Economist Mohamed El-Erian is a potential candidate for Federal Reserve vice-chairman

Wall Street declined, as shares of General Electric sank for a second day and energy stocks slid with oil prices.

At the close of trading in New York, the Dow Jones Industrial Average fell 30.23 points, or 0.13%, to 23,409.47. The Nasdaq Composite Index shed 0.3% to 6737.87 and the Standard & Poor's 500 Index declined 0.2% to 2578.87.

General Electric, down 7.9%, led the Dow lower. DowDuPoint, down 1.8%, posted the second-largest percentage decline in the Dow. Bucking the trend were Coca-Cola and Home Depot, up 1.3% and 1.2% respectively, for the largest percentage advances in the Dow.

General Electric shares retreated for a second day amid concern about the company's turnaround plan, announced on Monday.

"We attribute the sharply negative stock reaction to the Nov-13 unveiling of new CEO John Flannery's turnaround plan to a number of disappointments and unsettling disclosures," RBC Capital Markets analyst Deane Dray wrote in a note to clients Tuesday, CNBC reported.

"Turnaround plan fell short of the sweeping reset of the business model/portfolio many had hoped for," noted Dray, who downgraded his rating as well as his price target for GE shares. There are "few reasons to believe the stock bottoms here."

Meanwhile, the White House is considering economist Mohamed El-Erian as one of several candidates to potentially serve as the Federal Reserve's vice chairman, the Wall Street Journal reported, citing a person familiar with the matter.

President Donald Trump earlier this month nominated Jerome Powell, currently serving as a Fed governor, to succeed chairwoman Janet Yellen when her terms ends in February.

US crude slid 1.9% to $US55.70 a barrel after the International Energy Agency said the oil price rally could be short-lived and global oil demand would be weaker than expected this year and next.

In Europe, the Stoxx 600 Index fell 0.6%. Germany's DAX Index eased 0.3% and France's CAC 40 Index retreated 0.5%. 

Tesco rallies after takeover approval
The UK's FTSE 100 Index edged 0.01% lower, as a rally in Tesco and Vodafone offset a decline in mining stocks, which followed commodity prices lower.

Tesco jumped after Britain's biggest retailer earned provisional approval for its £3.7 billion ($US4.9 billion) takeover of Booker, the country's top grocery wholesaler, from the UK competition regulator.

After an in-depth review, the Competition and Markets Authority provisionally concluded that Tesco's purchase of Booker did not raise competition concerns, the regulator said in a statement.

Tesco closed 6.2% higher in London while Booker ended 6.8% stronger amid bets the surprise clearance could prompt Booker shareholders to demand Tesco to increase its bid.

Meanwhile, analysts expect more M&A activity as supermarkets seek to use excess capacity within their supply chains, Reuters reported.

"The wholesale trade in particular will be wondering why on earth it ever bothered engaging at all with the CMA, an organisation that seemingly lives in a different universe," Shore Capital analyst Clive Black told Reuters.

"If Tesco and Booker can merge with unconditional approval, then the scope for further large-scale consolidation cannot be ruled out."

(BusinessDesk)


Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

Comments & Questions

Commenter icon key: Subscriber Verified

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.6890 0.0002 0.03%
AUD 0.9037 0.0002 0.02%
EUR 0.5812 -0.0002 -0.03%
GBP 0.5180 0.0003 0.06%
HKD 5.3812 0.0015 0.03%
JPY 76.7030 0.0820 0.11%

Commods

Commodity Price Change Time
Gold Index 1290.4 -1.540 2017-11-23T00:
Oil Brent 63.3 0.770 2017-11-22T00:
Oil Nymex 58.0 1.170 2017-11-22T00:
Silver Index 17.1 0.150 2017-11-22T00:

Indices

Symbol Open High Last %
NASDAQ 6869.5 6874.2 6862.5 0.07%
DJI 23597.2 23605.8 23590.8 -0.27%