Shares of GE (GE) Pop on Better-Than-Expected Credit Rating Downgrade

Shares of General Electric (NYSE: GE) are spiking in pre-market trading on news that S&P has cut its credit rating on the company from AAA to AA+. GE most recently traded at $8.77, up $0.32 or 3.5%, from yesterday's closing price.

While the downgrade initially seems negative, investors are buying shares of GE this morning as the reduced rating was not as bad as some had expected. Rumors suggested that S&P could move GE's credit rating lower by 2 or even 3 notches, so this only one-notch downgrade is actually somewhat of a surprise.

Also, S&P moved its credit outlook on GE to stable, meaning that the rating agency does not see a need to downgrade GE's terms for six months to two years.

Click Jeff Immelt.

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