Wall Street's jury is in on GE as motivator of growth, forecaster of success, and loving wife of the bull. Are they right? Marketwatch's Tomi Kilgore: GE BRINGS GOOD NEWS FOR THE STOCK MARKET The breakout rally in General Electric’s stock last week has made some bullish chart watchers giddy, because although the industrial conglomerate has lost a lot of its luster since the Great Recession, many still consider it an important barometer of future market performance. For the last five years, GE’s stock GE, +0.27% has traded nearly in lock-step with the Dow Jones Industrial Average, of which it has been a component since November 1907. The correlation coefficient since November 2009 has been 0.96, where 1.00 would indicate an exact match. Tom McClellan, the author of the widely-followed investor newsletter The McClellan Market Report, said that history showed that the rare times GE’s stock and the Dow disagreed, like they had been doing for the past several months, “it is usually GE that ends up being right about where both are headed.” That had been a key concern among many bullish chart watchers, because as the Dow has posted several record highs since the summer, GE’s stock has kept peaking at lower and lower levels. That all changed last week. GE’s stock broke through a downward-sloping trendline that had defined its bearish trend the last several months. Greywolf Execution Partners’ chief technical analyst Mark Newton said the breakout rally “marks at least a short-term positive development by climbing above an area of resistance that had marked highs in this chart since June.” As technicians like to say, the end of a downtrend tends to mark the start of a new uptrend. And when GE’s stock is rising, the broader stock market usually does the same. Newton feels the first upside target for GE is $27, or about 2.1% above current levels. It would have to rise 3.8% to close above the June 9 high of $27.44. The stock was up 0.1% after midmorning trade Monday. It has run up 9% since GE reported better-than-expected third-quarter earnings on Oct. 17. It may not be a coincidence that the Dow has also gained 9% over the same time. Seeking Alpha's Praveen Chawla: IS GE CREATING ECONOMIC VALUE? SummaryEconomic value added (EVA) analysis looks at the profits accruing to the shareholders after subtracting the cost of capital.My Analysis shows that GE has been an erratic creator of Economic Value (EV) over the last 15 years. GE destroyed value in 8 of the last 15 years.As GE shrinks its balance sheet and goes back to its industrial roots, it is beginning to create increasing EV however it may also become more cyclical. I recently published an EVA analysis on IBM, showing that the company is delivering significant economic value to shareholders in spite of recent weakness in earnings. In this article I am presenting a similar analysis forGeneral Electric (NYSE:GE)What is EVA analysis?Economic Value Added (EVA), is an estimate of a firm's economic profit - that is, the value created in excess of the required return of the company's investors (being shareholders and debt holders). Quite simply, EVA is the profit earned by the firm less the cost of financing the firm's capital. The idea is that value is created when the return on the firm's economic capital employed is greater than the cost of that capital and value is destroyed if the firms earning do not exceed its cost of capital. Looking at EVA created (or destroyed) over time can give us idea of the firms economic moat - is it increasing or decreasing? As a rule we want to invest in companies with a durable and strong economic moat or firms which are in process of creating such a moat. EVA Analysis can also shed light on turnaround situations. It can provides clues if a turnaround is working and whether or not a firm is coming out of a slump. For firms in cyclical industries it provides a clue as to where they may be in an economic cycle. EVA analysis has two broad components. NOPAT (net operating profit after taxes) and CC ( Cost of Capital). EVA is NOPAT minus CC. Calculations of NOPAT is straightforward and obtained from the income statement - I took GE's operating profit and deducted provisions for income tax from it. Calculations for Cost of Capital (CC) is a little more complex. It involves the determination of the firm's Weighted Cost of Capital. 1. I first determined the cost of long term debt by taking the firm's interest expense and dividing it by the amount of long term debt on its balance sheet. 2. For the cost of equity for each year I took the year end P/E ratio and reversed it - i.e. Earnings / Price also known as earnings yield. This gives me an estimate of the market price at which investors are willing to own the firm's equity for. (The higher the P/E the lower the cost of equity and vice versa). 3. I then calculated the Debt/Equity ratio for firm for each year. 4. I then calculated the Weighted Average Cost of Debt and Equity. 5. I then multiplied the firm's Total Asset less Current Liabilities by Weighted Average Cost of Debt and Equity to get the Cost of Capital. (The reason I use Total Assets is because Assets are not free from an "Economics" point of view. Maintenance of Asset on the balance sheet have an opportunity cost, I deducted Current Liabilities as typically this is "free" credit extended by vendors to the firm). 24/7 Wall St.'s Paul Ausick: THE 4 DJIA STOCKS THAT LIFTEDTHE MARKET November 6, 2014: Markets opened slightly higher on Thursday but all three major indexes shortly sank into the red before turning positive by mid-morning. Natural gas, crude oil, and precious metals traded down on dollar strength. Shortly before the closing bell the DJIA traded up 0.41% for the day, the S&P 500 traded up 0.38%, and the Nasdaq Composite traded up 0.37%. The Dow 30 stock posting the largest daily gain ahead of the close today was General Electric Co. (NYSE: GE) which traded higher by 2.13% at $26.38. The stock’s 52-week range is $23.69 to $28.09. Volume was about 10% above the daily average of around 29 million shares. The company had no specific news today, but led the charge making the industrials today’s best performing sector. Microsoft Corp. (NASDAQ: MSFT) traded higher by 1.96% at $48.80. The stock’s 52-week range is $34.63 to $48.85, a new 52-week high. Volume was about 15% below the daily average of around 34 million shares. The company announced today that it was making its mobile Office apps free. The Home Depot Inc. (NYSE: HD) traded up 1.80% at $97.50. The stock’s 52-week range is $73.96 to $99.26. Trading volume was about 55% below the daily average of around 6.8 million shares. The home improvement store had no specific news today. Caterpillar Inc. (NYSE: CAT) traded up 1.52% at $100.92. The stock’s 52-week range is $81.87 to $111.46. Volume was about 40% below the daily average of around 5 million shares. The company had no news today, but performed nearly as well in the industrials sector as did GE. Of the Dow 30 stocks 7 are set to close lower today and 23 are on track to close higher.