Turn out the lights: GE down 4%

Imagination not at work. GE shares fell Friday on concerns about slumping sales in key business lines.

Remember when General Electric (GE) was considered THE market bellwether?

Those days appear to be history. GE fell 4% Friday after an earnings report that, while good, was not as strong as investors were hoping for. But even though GE was not bringing good things to life, the Dow was flat.

And that was due more to the big plunge in Dow component IBM (IBM). The Dow is price-weighted. So IBM, with a stock price just shy of $200 has a bigger impact on the Dow's daily gyrations than GE, which trades for just under $22 a share.

The rest of the market was doing just fine despite GE's woes. The S&P 500 was up 0.7% and the Nasdaq popped more than 1% thanks to strong results from tech leaders Microsoft (MSFT) and Google (GOOG).

Traders on StockTwits had a lot to say about GE though. And many thought investors should not be so quick to dismiss the fact that sales in some of GE's most economically sensitive businesses were down.

Loyola80
$IBM and $GE are usually pretty reliable tells for rest of market $SPX $DJIA Bearish

SkepticalBull
I'm usually modest, but damn I'm good. Called this miss all week. How was $GE +10% YTD when all of their markets were down on the year? Bearish

A more important question is this: How is the market still up this much? Many industrial conglomerates face the same pressure as GE. And GE is really struggling in Europe. That's not a GE problem exclusively.

Another investor complained about the fact that companies seem forced to manage for short-term goals of beating Wall Street estimates. GE is a company that has been famous for usually beating consensus targets every quarter by a small amount. Some argue that GE has "managed" earnings.

apppro
$GE If we had a tax policy that promoted growth and penalized SHORT-term thinking, companies would be better off.

Great point. It is too bad that many companies seem to care more about hitting numbers instead of making smart investments for the future. I really admire companies like Google and Amazon (AMZN), which don't play the quarter-to-quarter earnings game.

Another trader thinks GE is too unwieldy and needs to split up. It's already sold most of its stake in NBCUniversal to Comcast (CMCSA). But GE remains a classic conglomerate ... and those companies tend to trade at a discount to the broader market.

traderrick1
$GE It proves the pieces are worth so much more than the whole. Time for GE to start spinning off a few units. Target 27-30.

Finally, one investor said that GE is still worth watching. The sell-off may be an overreaction. But it remains to be seen.

Morpheus
$GE my apprehension on pulling the buy trigger may have been a good thing. Next three days of action will confirm.

Good point. As I wrote earlier this week, the disappointing earnings and concerns about the global economy may be the start of a broader pullback in stocks like we've seen in the second quarter for the past three years. If that's true, GE won't escape a slump unscathed.

And now it's time for my Reader Comment of the Week. It has nothing to do about stocks.

One of my most loyal readers is a guy named Christian Koulichkov. He's actually won Reader Comment of the Week several times. Usually, I joke about how he's a fan of the Celtics, Red Sox and Patriots, sports teams that are my mortal enemies. As you can guess, he's from Boston. There's no fooling around this week.

@LaMonicaBuzz it's insane out right now. I was living in NYC on 9-11. Haven't felt this sick since. My hometown in chaos. Very tough.—
Christian Koulichkov (@BostonBroker33) April 15, 2013

Christian, my heart goes out to you and everyone in the 617, 508 and 781. Hang in there. I hope the nightmare is over soon. All of us in New York (and America for that matter) love that dirty water.