GE's credit rating outlook turns 'negative' at Fitch; stock drops
The outlook for General Electric Co.'s credit has been revised to negative from stable at Fitch Ratings, which cited concerns over risks to the diversified industrial company's power business, free cash flow and support for GE Capital. GE's stock dropped 3.8% in midday trade. The credit rating agency affirmed GE's long-term rating of BBB+, which is three notches above "junk" status, and its short-term rating of F2. Fitch said further deterioration in GE's power business since the third quarter and expectations for lower industrial FCF in 2019 magnify execution risks, which could outweigh positive developments that include lower leverage from planned asset sales and ongoing restructuring initiatives. The stock has rallied 9.5% over the past three months but has tumbled 34% over the past 12 months, while the Dow Jones Industrial Average has lost 4.3% the past three months but gained 0.7% the past year. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.