NEW YORK, Nov 14 — US stock indexes rose yesterday as a sharp drop in General Electric shares was more than offset by gains in high dividend-paying sectors including consumer staples and utilities.
General Electric slashed its dividend by 50 per cent and cut its profit forecast while unveiling a plan that narrowed its focus on aviation, power and healthcare.
Shares of the industrial conglomerate fell 7.2 per cent to US$19.02 (RM79.70) after touching a more than five-year low of US$18.75.
“People who were in GE for their dividend may be looking for a better place to put their money,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
Utilities and consumer staples rank among the sectors with the highest dividend yield on the S&P 500. They were also the largest percentage winning sectors yesterday.
The Dow Jones Industrial Average rose 17.49 points, or 0.07 per cent, to 23,439.7, the S&P 500 gained 2.54 points, or 0.10 per cent, to 2,584.84 and the Nasdaq Composite added 6.66 points, or 0.1 per cent, to 6,757.60.
Investors are closely tracking developments around the tax bill after US Senate Republicans last week unveiled a new plan that differed from the House of Representatives' version.
Some relief for investors did come from the regulatory side, and shares of regional banks rose after the Wall Street Journal reported a bipartisan group of Senate lawmakers reached a tentative agreement to ease some regulations on the sector.
The KBW Regional Banking Index gapped lower at the open but turned positive mid-session and ended up 1.3 per cent after steadily climbing in afternoon trading.
Toymaker Mattel jumped 20.7 per cent to US$17.64 after a report that rival Hasbro made an approach to acquire the company. Hasbro rose 5.9 per cent to US$96.84.
Qualcomm gained 3.0 per cent to US$66.49 after the chipmaker rejected rival Broadcom's US$103-billion takeover bid, saying the offer “dramatically” undervalued the company.
Tyson Foods shares climbed 2.0 per cent to US$75.59 after the meat processor said low prices for livestock feed will help boost results again next year. Shares touched their highest since September 2016.
Roku shares continued to rally, up 28.5 per cent yesterday to US$42.71, more than doubling since the company reported earnings last week. The stock debuted at US$15.78 on Sept 28 after having priced its initial public offering at US$14.
Declining issues outnumbered advancing ones on the NYSE by a 1.27-to-1 ratio; on Nasdaq, a 1.02-to-1 ratio favoured decliners.
The S&P 500 posted 40 new 52-week highs and nine new lows; the Nasdaq Composite recorded 67 new highs and 81 new lows.
About 6.18 billion shares changed hands in US exchanges, fewer than the 6.67 billion daily average over the last 20 sessions. — Reuters