Wall St. set to climb at open, buoyed by GE divestment plan
By Tanya Agrawal
(Reuters) - U.S. stocks were poised to edge up at the open on Friday as investors lauded GE's decision to divest the bulk of its high-risk GE Capital business.
General Electric jumped about 7 percent in premarket trading and about 27 million shares exchanged hands, the most active stock on the New York Stock Exchange, after the company said there was potential to return more than $90 billion to investors through 2018.
"I expect buybacks to continue because a lot of major stocks, including Apple, are undervalued," Adam Sarhan, chief executive of Sarhan Capital in New York.
GE will sell its $30 billion real estate portfolio over the next two years, with Blackstone and Wells Fargo , snapping up most of its assets. Blackstone shares were up 1.9 percent in premarket trading.
In another real estate deal, Excel Trust was up 15 percent at $15.91 after it said it would be bought by Blackstone Group for about $2 billion.
"The deal is good for the economy and especially for Blackstone. The real estate market will appreciate as long as the rates remain low or rise marginally which points towards a bullish market," Sarhan said.
S&P 500 e-mini futures were up 2 points and fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract, indicated a slightly higher open. Dow Jones industrial average e-mini futures <1YMc1> rose 27 points and Nasdaq 100 e-mini futures lost 0.5 point.
The S&P 500 <.SPX> is up 1.2 percent for the week and is on track for a second straight week of gains, helped by a pickup in merger activity. Investors are also bracing for a pickup in quarterly results after the corporate earnings season kicked off earlier this week.
Data Friday showed import prices for March declined 0.3 percent, as expected.
Consumers flocked to Apple Inc's stores around the world to get the first close-up look at the tech giant's smartwatch, which the company expects will be its next runaway hit. Still, Apple shares were off 0.5 percent at $125.99 in premarket trading.
PayPal, eBay Inc's electronic payments division, said the two firms had agreed that eBay would not reduce the volume of transactions it channels through PayPal, while continuing to get better rates for its merchants for five years after the two companies split.
