NEW YORK: US stock indexes rose on Monday 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 percent 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 percent to $19.02 after touching a more than five-year low of $18.75.
“People who were in GE for their dividend may be looking for a better place to put their money,” Kim Forrest — a senior equity research analyst at Pittsburgh-based Fort Pitt Capital Group — said.
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 on Monday.
The Dow Jones Industrial Average rose 17.49 points (or 0.07 percent) to 23,439.7, the S&P 500 gained 2.54 points (or 0.10 percent) to 2,584.84, and the Nasdaq Composite added 6.66 points (or 0.1 percent) 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 percent after steadily climbing in afternoon trading.
Toymaker Mattel jumped 20.7 percent to $17.64 after a report that rival Hasbro made an approach to acquire the company.
Hasbro rose 5.9 percent to $96.84.
Qualcomm gained 3.0 percent to $66.49 after the chipmaker rejected rival Broadcom’s 103-billion takeover bid, saying the offer “dramatically” undervalued the company.
Tyson Foods shares climbed 2.0 percent to $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 percent on Monday to $42.71, more than doubling since the company reported earnings last week. The stock debuted at $15.78 on September 28 after having priced its initial public offering at $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.