June 16, 2008 at 12:00 pm by Tom Lydon
General Electric (GE) had its shares downgraded from "neutral" to "overweight," but that doesn’t seem to be dragging exchange traded funds (ETFs) that count the company as a top component.
It’s just the latest bit of bad news for the company, which announced an unexpected drop in first-quarter profit, reports Scott Malone for Reuters. Since that announcement, shares have fallen 22%.
Analysts feel that perhaps GE has become too complicated for investors to understand, and J.P. Morgan thinks they need to sell off wide swaths of its operations to restore confidence. GE may already be taking that step, as they announced last month plans to get out of the appliance business.
- Industrial Select Sector SPDR (XLI): down 5.1% year-to-date; GE is the top holding at 16.5%
- iShares Dow Jones US Industrial (IYJ): down 4.5% year-to-date; GE is the largest component at 16.6%
GE is also the only original component in the Dow Jones industrial average.
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