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General Electric (NYSE:GE) led first-quarter stock gains among the biggest U.S. industrial companies during a period when major indexes hit record highs. The industrial conglomerate, which on April 2 will spin out its energy business as a separately publicly traded company, jumped 38% in the first three months of the year.
The Industrial Select Sector SPDR ETF (NYSEARCA:XLI), whose holdings include some of the largest U.S. companies in the sector, rose 11% to end the quarter at a record high.
The performance mirrored the advance of other benchmarks, with the Standard & Poor’s 500 stock index (SP500) rising 10% to a record for its best first-quarter performance in five years. The Dow Industrials Average (DJI) advanced 5.6% and the Nasdaq Composite (COMP.IND) gained 9.1%.
The gains came as investors looked for signs of when the Federal Reserve will cut interest rates after working to tackle a multidecade high in inflation. The U.S. economy grew faster than expected in the final quarter of 2023, the most recent data show. Consumer confidence is near a three-year high, according to a University of Michigan survey.
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General Electric’s (GE) gains came as the company prepared investors for its split into GE Aerospace, which makes jet engines and aviation systems, and GE Vernova (GEV), which makes turbines to generate electricity. The aerospace business has benefited from a strong rebound in demand for travel as airlines order hundreds of new planes to keep up with growing volumes of passengers. They also seek to reduce fuel expenses by replacing older planes.
Eaton (NYSE:ETN), a maker of power-management tools, jumped 30% in the first quarter as investors continued to pile into stocks that are poised to benefit from the growth of artificial intelligence. The technology requires massive computing power, helping to drive demand for electrical equipment. The company on February 1 reported earnings growth of 24% from a year earlier as revenue expanded 11% to $5.96 billion.
Uber Technologies (NYSE:UBER), which is classified as an industrial company despite its roots as an app developer, rose 25% in the first three months of the year. The ride-hailing and delivery company introduced a $7 billion stock buyback program and predicted that earnings before interest, taxes, depreciation and amortization will rise in the high 30% to 40% range for the next three years.
Caterpillar (NYSE:CAT) rose 24% in the quarter and hit a record high. The maker of construction and mining equipment is poised to benefit from government incentives to improve the country’s infrastructure. Federal funding is set to last for the foreseeable future.
Boeing Declines
Boeing (NYSE:BA) stood out for losing 26% of its value during the quarter, one of the worst periods for the aerospace and defense company since the pandemic slashed demand for travel. A near-catastrophe on a Boeing (BA) plane flown by Alaska Airlines (ALK) on January 5 triggered a significant selloff in its shares.
Amid intense scrutiny from aviation officials, airlines and lawmakers, Boeing’s (BA) near-term future is uncertain. However, the company’s search for a new chief executive and efforts to fix its manufacturing issues has led some sell-side analysts to predict the company will stage a strong comeback.