Monday morning was a downer for investors, as major stock indexes fell modestly. Market participants have started getting ready for quarterly earnings season to ramp up once again, and fears about growth have kept some would-be buyers on the sidelines. As of 11:30 a.m. EDT, the Dow Jones Industrial Average (DJINDICES: ^DJI) was down 130 points to 26,295. The S&P 500 (SNPINDEX: ^GSPC) fell 6 points to 2,887, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) was off 17 points to 7,921.
Among companies making headlines, Walmart (NYSE: WMT) appears to be betting more heavily on the cannabis-derived beverage market through an expanded distribution agreement with New Age Beverages (NASDAQ: NBEV). Meanwhile, shares of beleaguered industrial conglomerate General Electric (NYSE: GE) sank in response to negative comments from stock analysts that raised new concerns about GE's ability to mount a full recovery from its recent woes.
Walmart takes New Age higher
Walmart's stock was little changed Monday, but New Age Beverages saw its shares jump 18% after the organic and natural beverage company announced that it had expanded the distribution of its Marley brand of products with Walmart. New Age acquired Marley just two years ago, but it's worked hard to take advantage of the purchase, ramping up shipments of its Marley Mate natural energy drink and releasing an organic version of the beverage last year to substantial success.
That performance led to Walmart's acceptance of the deal, according to New Age, and it comes at a key time for the company. New Age anticipates the global launch of its Marley Mellow Mood + CBD beverage this year, using cannabis-derived compounds to enhance the other ingredients in the drink. New Age sees itself boosting marketing of Marley in 2019 and beyond, using social media and other digital advertising assets to pump up demand.
New Age's release only mentions the distribution of the three Marley Mate flavors through Walmart locations, leaving open the question of whether the retail giant is interested in plowing new ground when New Age releases its CBD beverage line. For now, though, shareholders in New Age are content with the dramatic boost in exposure the company's beverages will get.
Will GE keep sinking?
Shares of General Electric were down 7% Monday morning following downbeat analysis from JPMorgan. The Wall Street giant has been negative on the industrial conglomerate for a long time, and analysts there once again added to the bear case by arguing that a combination of weak cash flow and new challenges at several of its business units could weigh on GE's results to a far greater extent than most investors currently believe. JPMorgan cut its rating on General Electric from neutral to underweight and reduced its share-price target to just $5 -- half of what the stock fetched as of Friday's close.
Anyone who's watched General Electric over the past couple of years knows all too well all the difficulties that the company has faced. An ill-timed foray into the energy sector just when crude oil prices plunged has proven to be difficult to overcome, and even healthy businesses like aerospace and renewable power have run into unforeseen circumstances. Executive turnover has also played a key role in holding GE back.
Now, it's up to CEO Larry Culp and his team to take the criticisms that JPMorgan and others have made and try to find constructive elements they can use to turn GE around. Failing that, it's entirely possible that General Electric's stock could see further declines.
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