) --

General Electric's

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stock price has held up amid a mild but broad-based selloff in big financial stocks that began Nov. 19.

Since the close of trading Nov. 18 to Wednesday's close, General Electric's stock price has dropped just two cents, or 0.1%. Over the same stretch,

JPMorgan Chase

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shares have fallen 3.3%;

Bank of America's

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stock has lost 4.2%;



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shares are off 4.5%;

Wells Fargo's

stock is

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is down 4.9%; and

Goldman Sachs

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shares have dropped 5.6%. (Note: Most of the financials are looking higher in premarket action on Thursday)

The price trend is an indication that CEO Jeff Immelt is having some success in getting investors to view General Electric as an industrial company. Industrial stocks have held up well over the same period, as indicated by the iShares Dow Jones US Industrial ETF

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, which has lost just .03%. (GE makes up about 11% of that ETF).

If the trend persists, it's good news for GE shareholders, since industrial stocks have historically commanded a higher price-to-earnings multiple than financial stocks. In the wake of the credit crisis,

it has become difficult to make too much of price-to-earnings metrics

, considering the influence of systemic factors, but that disconnect should eventually ease.

The selloff in financial stocks appears to be driven by a range of issues, including concerns banks will need to issue more equity to meet new capital requirements, tougher rules on derivatives trading, and the threat of rising losses in commercial real estate.

Derivatives aside, General Electric is vulnerable on the other two points. It has $80 billion in commercial real estate exposure and will almost certainly face tougher capital rules, though it is possible some investors think it will not be held to the same standard as large banks. General Electric has so far avoided regulation by the Federal Reserve, and much remains up in the air about what the Fed's role will be in the future.

General Electric's stock has also gotten a lift from expectations for the completion of its complex deal to sell a majority stake in its NBC Universal to

Comcast Corp.

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, argues Malcolm Polley, president and chief investment officer at Indiana, Pennsylvania-based Stewart Capital Advisors LLC, which manages about $1 billion, including 318,000 GE shares. That


was announced early Thursday.

Analyst Steve Winoker of Sanford Bernstein, however, thinks investors had already discounted the NBCU sale, and instead are positioning themselves ahead of two important investor presentations GE has scheduled this month. Winoker also thinks investors are indeed focusing more on GE's non-financial businesses of late, and he says Immelt's commitment to shrink its financial unit by letting loans run off is starting to show up on GE balance sheet.

"You can see the size of the book shrinking," Winoker says, "I do think they're having some success. It may not as rapid as they were planning. We'll see more of that next week in terms of the latest results."

Things may be clearing up for General Electric, but investors should be prepared for a few more unpleasant surprises from its financial unit.


Written by Dan Freed in New York


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