Can the Dow Jones Today Recover from GE's Dividend Cut?

Garrett Baldwin

The Dow Jones today is down 81 points in pre-market hours as the U.S. Senate continues to debate a plan to delay reducing the corporate tax rate from 35% to 20% until 2019.

But today's major stock market news focuses on General Electric Co. (NYSE: GE), as the American conglomerate announced it's halving its dividend. Here's what to do right now if you own GE stock…

Here are the numbers from Friday for the Dow, S&P 500, and Nasdaq:

Now here's a closer look at today's most important market events and stocks, plus Monday's economic calendar.

The Five Top Stock Market Stories for Monday

• International markets faced some turbulence in reaction to ongoing political problems in the United Kingdom. Over the weekend, UK Prime Minister Theresa May was left scrambling after two senior members abruptly departed her cabinet. Meanwhile, as many as 40 members of Parliament have signed a letter stating their lack of confidence in the Prime Minister. May is facing significant pressure as she attempts to lead her country through a highly messy divorce with the European Union, a process known as "Brexit."

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• The price of Bitcoin experienced a dramatic swing over the weekend. The cryptocurrency fell from more than $7,000 to as far as $5,500 after a huge swell of demand in rival Bitcoin Cash pulled money out of Bitcoin. Bitcoin has since recovered to about $6,670 this morning. However, the sharp downturn had wiped out as much as $38 billion in Bitcoin's market capitalization. Be sure to check back later today here at Money Morning for more on this story and expectations for Bitcoin and Bitcoin Cash in the months and years ahead.

• Shares of Qualcomm Inc. (Nasdaq: QCOM) were sliding on news that the firm is about to reject a $103 billion merger deal from rival chipmaker Broadcom Ltd. (Nasdaq: AVGO). News of the deal offer made headlines last week and led to a surge in QCOM stock. The $103 billion offer would have been considered the largest technology deal in the history of the stock market.

• In other deal news, toy maker Hasbro Inc. (NYSE: HAS) is considering a deal to purchase rival Mattel Inc. (NYSE: MAT). Shares of Mattel surged more than 24% after the bell Friday after reports emerged about the potential deal.

• Crude oil prices are hovering at two-year highs as markets prepare for a critical meeting among OPEC leaders this week in Abu Dhabi. OPEC members and a few key non-member nations are looking to extend a deal to cap excessive production beyond the current deal that ends March 2018. In addition, markets are eyeing ongoing geopolitical flare-ups around the globe, including Northern Iraq, Yemen, Venezuela, and Spain. The WTI crude oil price today fell 0.1%. Brent crude added 0.2%.

Three Stocks to Watch Today: GE, TSN, SNE

• Shares of General Electric Co. (NYSE: GE) added 1.2% after the company announced plans to slash its dividend by 50%, to just 12 cents. The decision comes at a difficult time for the 125-year-old company, as it struggles to determine how to utilize its free cash flow. CEO John Flannery is attempting to lead the firm through an aggressive turnaround strategy.

• Shares of Sony Corp. (ADR) (NYSE: SNE) fell 0.4% in pre-market hours despite a bullish report on the Japanese technology giant. Over the weekend, Barron's projected that SNE shares could jump as much as 20% over the next year. The financial publication said that the firm may experience a sharp uptick in demand for its video game systems, software and cables, and smartphone chips.

• Shares of Tyson Foods Inc. (NYSE: TSN) added nearly 3% after the firm reported a strong fourth-quarter earnings report. The global meat-processing giant saw strong earnings growth and capped off a record year. The firm reported earnings per share of $43 on top of $10.14 billion in revenue. Wall Street expected earnings of $1.37 on $9.95 billion.

• Look for earnings reports from JD.com Inc. (Nasdaq: JD), AECOM Technology (NYSE: ACM), MTS Systems Corp. (Nasdaq: MTSC), Hill International Inc. (NYSE: HIL), and China Yuchai International Ltd. (NYSE: CYD).

Monday's U.S. Economic Calendar (all times EST)

• Four-Week Bill Announcement at 11 a.m.
• Three-Month Bill Auction at 11:30 a.m.
• Six-Month Bill Auction at 11:30 a.m.
• Treasury Budget at 2 p.m.

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Garrett Baldwin

About the Author

Browse Garrett's articles | View Garrett's research services

Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.

Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.

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