General Electric Co. stock was up 0.1% in morning trade, but pared earlier gains of as much as 1.2%. The industrial conglomerate’s long-term credit rating was cut one notch to A2 from A1 at Moody’s Investors Service, which cited the “severe deterioration” in GE’s Power business, that will last through at least 2019. Moody’s affirmed GE’s short-term rating of Prime-1, and said the ratings outlook was stable, but said GE’s credit metrics “are not expected to be consistent with expectations for the A2 rating over the next several years.” The stock, which closed at Tuesday at a near six-year low, has tumbled 11% since new Chief Executive John Flannery detailed GE’s turnaround plan on Monday, and has plunged 23% since the day after GE reported third-quarter results on Oct. 20. “Moody’s does not anticipate that GE will allocate a meaningful portion of any proceeds from planned asset disposals to debt reduction in the near term to help expedite the restoration of credit metrics,” Moody’s said in a statement. GE’s stock has plummted 42% year to date, while the Dow Jones Industrial Average has gained 19%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
From:: Stock Market News