GE jumps (2-9-09)

This is the first of my daily accounts of the financial markets and the economy as it relates to my own investment objectives and strategies.

Economic News:

No specific economic data was reported today. But Obama did continue to campaign for passage of his economic stimulus package, which has undergone substantial changes since having passed the house of representatives. His campaign follows weekend negotiations by members of the Senate in order for the bill to be passed soon.

US Treasury Secretary, Tim Geithner, will be unveiling the bank rescue plan tomorrow.

Market Reaction:

As a whole, the Dow, S&P and the NASDAQ were each generally flat on the news.

Stocks:

One high-flyer was GE. GE rose about 14%. There were two different reasons given for the rise. First, investors saw as positive Immelt's willingness to cut GE's dividend, which would provide more capital to offset writedowns from the GE Capital unit and avoid a cut in GE's credit ratings to below AAA. Another reason given was the prospect of GE benefiting from the stimulus bill and bank rescue plan. I think the latter is common sense and should not justify such a significant rise. Otherwise, why didn't all other companies that would benefit also rise?

B of A also jumped about 13% on general expectations that it will benefit from any rescue plan. But given that other financials did not rise as much, I suspect investors are simply taking advantage of a severely hard-hit stock of a great company.

Apple continues to rise. YTD, the stock is up 13% and is up over 24% from its low on Jan. 20. I think this stock, RIMM and certain other consumer technology stocks are currently on an upward trend. Let's see what takes place.