Month: September 2015

The Senate on Wednesday passed a bill to keep the federal government operating through Dec. 11. The bill goes next to the House, which is expected to vote on it later Wednesday. Without a stopgap spending bill, the federal government would partially shut down beginning Thursday morning. The bill includes funding for Planned Parenthood over the objections of conservative lawmakers. The vote was 78 to 20.

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The Securities and Exchange Commission charged twenty-two municipal underwriting firms with selling municipal bonds using materially false statements or omitting required disclosures to investors. They will pay penalties based on the number and size of the fraudulent offerings identified, with a maximum penalty imposed on PNC Capital Markets of $500,000. The SEC’s complaint says that between 2010 and 2014, the twenty-two firms, which also include UBS , Fifth Third Securities , BB&T , Mesirow Financial, and Edward D. Jones & Co , also failed to conduct adequate due diligence to identify the misstatements and omissions before offering and selling the bonds to their customers. The firms did not admit or deny the findings, but agreed to cease and desist from such violations in the future. Each firm also agreed to hire an independent consultant to review its policies and procedures on due diligence for municipal securities underwriting. This is the second round of filings against underwriters under the SEC’s Municipalities Continuing Disclosure Cooperation Initiative.

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Shares of Baxter International Inc. rose 1.3% in morning trade Wednesday, after billionaire investor Dan Loeb’s hedge fund Third Point LLC, which is already the drug company’s largest shareholder, boosted its stake, again. Baxter disclosed in regulatory filing that Third Point now owns 53.85 million shares, or a 9.9% stake in the company. That’s up from a 52.5 million share, or 9.6% stake, disclosed on Aug. 6, and a 37.93 million share, or 7% stake, disclosed on Aug. 5. Baxter said it increased the size of its board of directors to by 1 to 11 directors, and has immediately appointed Third Point partner Munib Islam to fill that vacancy. The board will eventually expand to 12 directors. Baxter’s stock has lost 13% over the past three months, while the S&P 500 has slipped 7.3%.

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WASHINGTON (MarketWatch) — A measure of Chicago-area manufacturing dropped sharply into contraction territory in September, according to data released by MNI Indicators. The Chicago PMI fell to 48.7 in September from 54.4 in August, on a scale where readings below 50 indicate deteriorating activity. MNI said production growth collapsed and new orders fell sharply.

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Apple Inc. may have already captured a vast majority of the smart wearable device market with its watch, but analysts at Mizuho Securities said the company won’t start to see real revenue gains from this emerging category until at least the second-generation watch is released. A survey produced by the brokerage indicates people – mostly iOS users — are interested in buying a watch, but are awaiting Apple Watch 2 before purchase. “We might need to go through couple of iterations before smart watch adoption broadens,” the analysts said. The analysts maintained a neutral rating and $125 price target on the stock, which implies a 15% increase from Tuesday’s closing price. Shares of Apple recently traded up 0.8% to $109.90, but they have slid 13% over the last three months, underperforming the 9% decline for the broader Dow Jones Industrial Average.

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U.S. stocks opened with solid gains on the last day of the month and quarter Wednesday, but are still on track to post substantial monthly and quarterly losses. The main indexes are on track to post the biggest quarterly decline since September 2011. The S&P 500 opened 21 points, or 1.1%, higher at 1,905. The Dow Jones Industrial Average opened 170 points, or 1.1%, higher at 16,219. The Nasdaq Composite began the day up 66 points, or 1.5%, at 4,584.

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The Gap Inc. has been downgraded to underperform from neutral at Mizuho after news that the president of the Old Navy brand, Stefan Larsson, is leaving the company to join Ralph Lauren Corp. . The firm has also decreased the price target to $26. The Gap is down 7.5% in trading so far. The firm calls the departure a “bad omen” for Old Navy. “This is also, in our view, a major loss of brain trust for the company with both Gap and Banana Republic struggling to refine design and supply chain processes to regain footing in the softlines space,” the note said.

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Advance Auto Parts Inc.’s stock surged 6.4% in premarket trade Wednesday, after New York hedge fund Starboard Value L.P. said it had acquired a 3.7% ownership stake in the auto parts retailer. In a letter to Advance Auto’s Chief Executive Darren Jackson, Starboard Managing Member Jeffrey Smith wrote that the stock could achieve a price of $350, which is more than double Tuesday’s closing price of $170.53. “We believe that the current market price of Advance does not fully reflect the value of its businesses and that opportunities exist within the control of management and the board of directors of the Company (the “Board”) to create substantial value for all shareholders,” Smith wrote. Starboard’s 3.7% stake in the company would make it the sixth-largest shareholder, according to FactSet. Advance Auto’s stock has gained 7.1% over the past three months through Tuesday, while the S&P 500 had lost 8.7%.

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Shares of Madison Square Garden Co. were indicated higher in premarket trades Wednesday following the sports and entertainment company’s spinoff of its media network business. Analysts at Stifel Nicolaus, led by Benjamin Mogil, wrote in a note that their thoughts on the post-split MSG, with regard to the sports and entertainment business, haven’t changed much since the company’s fourth-quarter earnings report. Stifel upgraded MSG shares to buy from hold. As for the new MSG Networks Inc., Stifel is effectively taking a wait-and-see approach with a hold rating. Mogil wrote in a research note that the evolving multichannel video programming landscape will likely put pressure on MSG Networks. “While we think the stock is not expensive on 2016 estimates, we view [earnings before interest, taxes, depreciation and amortization] as largely treading water, at best, going forward as margins compress from the impact of reduced subscribers which cannot make up for rate card increases and programming costs which are contractual and inflexible.” MSG shares have dropped 8.6% in 2015, while the S&P 500 is down 8.5%.

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Paychex Inc.’s stock climbed 2.2% in premarket trade Wednesday, after the human resources services company reported fiscal first-quarter profit and revenue that beat expectations. For the quarter ended Aug. 31, earnings rose to $209.1 million, or 58 cents a share, from $171.3 million, or 47 cents a share, in the same period a year ago. The FactSet consensus for earnings per share was 51 cents. Total revenue increased 8% to $723 million, above the FactSet consensus of $718 million, with revenue from its payroll service and human resource service businesses both increasing more than expected. The company said it expects full fiscal-year payroll service revenue growth of 4% to 5% and human resource service revenue to increase 10% to 13% from a year ago. The current FactSet consensus estimates implies payroll service revenue growth of 4.3% and human resource revenue growth of 12%. The stock has slipped 1.9% over the past three months through Tuesday, while the S&P 500 has declined 8.7%.

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