Investing.com – A slump in General Electric unleashed more pain for industrials after a prominent Wall Street analyst raised concerns about profit growth at the beleaguered conglomerate.
GE (NYSE:GE) tumbled after J. P. Morgan cut its 12-month price on the stock to $6, citing concerns over future profit growth amid weak fundamentals. Its shares fell more than 8%.
J.P. Morgan's Stephen Tusa said he expected that 75% of General Electric's business would no longer be profitable by 2020 and delivered a downbeat assessment of the company's turnaround plan.
"GE's restructuring is 'far from a 'kitchen sink'' situation, where all the company's bad news comes out at once," Tusa said.
General Electric was quick to hit back at claims concerning the underlying strength of its balance sheet, insisting it was "a fundamentally strong company with a sound liquidity position. "
Flow control product manufacturer Flowserve (NYSE:FLS), reported above-forecast earnings and revenues on Thursday, but its guidance, which was in-line with consensus, came under scrutiny. Its shares fell 7%.
Flowserve forecasts earnings for the full-year of $1.65 to $1.75 a share, matching consensus of $1.70.
Caterpillar (NYSE:CAT) fell 3% on concerns that weaker growth in China could hurt performance as the U.S.-China trade war shows no sign of abating.
Industrials were trading 1.4% lower.