Bear Stearns has even more to answer for, it seems. The battered broker’s name cropped up three times on General Electric’s first-quarter call on Friday. In roiling the markets, Bear’s debacle was cited as one reason for a collapse in profits at GE’s financial services business. That led GE to miss consensus estimates by a wide margin and cut guidance for the year.

GE’s shares slumped by as much as 12 per cent – wiping out $44bn of value. Even there, the Bear effect was evident. GE had enjoyed a defensive rally from mid-March, as rumours about Bear began to gain traction. And markets react viciously when such faith goes unrewarded.

Unfortunately, weakness was not confined to financial services. The healthcare and industrial businesses also saw profits fall. NBC Universal, eking out 3 per cent profit growth, looked healthy in comparison. GE is suffering as the US economy slows.

The bright spot was infrastructure. GE continues to do well from industrialisation outside the US. It would be churlish to call 17 per cent profits growth disappointing. Even here, though, there were a couple of uncomfortable data points. Margins were lower and order growth, though still in double digits in percentage terms, slowed sharply compared with the fourth quarter.

GE has become the ultimate play on global economic decoupling. In that sense, the big disappointment yesterday was that infrastructure, while strong, was not strong enough to offset the weaker showing in GE’s other business lines.

The group’s innate strengths should not be forgotten. But a big miss like this raises questions as to exactly how defensive its diversified model will prove to be, particularly if this downturn spreads far beyond America’s shores.

For the wider market, it is an ominous sign. Analysts still expect a second-half rebound for earnings, predicated largely on non-financials remaining strong. GE’s miss should temper such optimism.

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