Shares of General Electric Co
The U.S. conglomerate's stock had not traded above $10 since February 19 amid concerns about its GE Capital finance arm. Shares have since retreated to $9.91, up 3 percent on the day, after touching a high of $10.15.
The world's largest maker of jet engines and electricity-producing turbines has since cut its dividend 68 percent and been stripped of its AAA credit rating by Standard & Poor's.
Those events lift most of the near-term risks GE shareholders faced, wrote UBS analyst Jason Feldman.
We believe the likelihood of further negative catalysts in the near-term is now much lower, Feldman wrote in a note to clients. We also caution against an overly bearish near-term stance given uncertainty regarding how investors will react to GE's Thursday analyst presentation on the finance business.
UBS lifted its short-term sell rating on GE and maintained its long-term rating at neutral, while cutting its share price target to $9.50 from $12.
GE shares are down 38 percent so far this year, more than double the 17 percent fall of the Dow Jones industrial average<.DJI>
The cost of insuring GE Capital's debt with credit default swaps also fell on Monday, with sellers of the swaps no longer requiring upfront payments to secure the debt, according to Phoenix Partners Group. Its CDSs had first traded upfront, a condition that typically suggests higher perception of risk, on March 2.
Investors on Monday were paying $700,000 a year to protect $10 million of GE Capital debt for five years with credit default swaps. That was down from Friday, when it cost $775,000 upfront plus $500,000 per year to insure those bonds.
(Reporting by Scott Malone, additional reporting by Walden Siew in New York; Editing by Derek Caney)