Month: September 2015

The dollar strengthened against the euro and the yen Thursday after European Central Bank President Mario Dragh hinted that the central bank is ready to increase stimulus measures if economic conditions deteriorate. Draghi acknowledged the potential impact of a weaker yuan and an economic slowdown in China on the eurozone’s economy and suggested that, while the ECB wouldn’t take any immediate action to expand stimulus measures, policy makers were ready to do so. Though they expect that the impact on prices will be short-lived. In recent trade, the euro was down 0.9% on the day to $1.1118. The dollar was up 0.4% to 120.17 yen. The dollar also benefited from a strong reading on weekly jobless claims. The number of people who applied for unemployment benefits rose last week to its highest level in two months. But the numbers were still at very low levels for August, typically a slow month for job creation.

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CVS Health Corp celebrated the one-year anniversary of its tobacco ban by releasing a study on Thursday conducted by the CVS Health Research Institute it says shows the impact of its effort. According to the research, there was an additional 1% reduction in the sale of cigarette packs at gas stations, convenience stores, big box stores, and other retailers in states where CVS had a 15% or greater share of the retail pharmacy market compared with states where there are no CVS pharmacies. The study examined the eight months after CVS stopped selling cigarettes. The research also found 4% more nicotine patch purchases in those states where CVS has 15% or greater market share. The company and its foundation have now partnered with the children’s publishing company Scholastic on a program to teach children about the dangers and consequences of smoking. CVS’ efforts have come at a price. The company reported a 7.4% increase in net revenue for the three months ended June 30 and a .5% increase in same-store sales, but says same-store sales would’ve been 780 basis points higher if tobacco were excluded from the numbers for the same period in 2014.

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Treasury yields declined Thursday, after the U.S. Labor Department said that the number of people who applied for unemployment benefits rose at the end of August to the highest level in two months. The report gave investors further hints on the state of the labor market ahead of the closely-watched official jobs report due Friday. The 10-year Treasury yield fell 3.9 basis points to 2.154%, while the yield on the two-year note slipped 2.8 basis points to 0.692%. The yield on the 30-year bond declined by 3.3 basis points to 2.933%.

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B&G Foods Inc. said Thursday it has agreed to acquire the frozen and canned vegetable brands Green Giant and Le Sueur from General Mills Inc. for about $765 million in cash. B&G Foods expects the deal to close in the fourth quarter and to immediately boost earnings per share and free cash flow. “The acquisition marks our entry into the frozen food category, which we believe will open many future growth opportunities,” Chief Executive Robert Cantwell said in a statement. B&G Foods is expecting the new brands to generate annualized sales of about $550 million, adjusted earnings before interest, taxes, depreciation and amortization of $95 million to $100 million and earnings per share of 60 cents. B&G Foods shares were not yet active in premarket trade, but are up 1.8% in the year so far, outperforming the S&P 500, which is down 5.4%. General Mills shares are up 6.5% in the year.

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WASHINGTON (MarketWatch) – The number of people who applied for U.S. unemployment benefits rose at the end of August to the highest level in two months, but initial claims are still at very low levels that indicate companies aren’t laying off many workers. New claims rose by 12,000 to 282,000 in the week ended Aug. 29, the government said Thursday. Economists polled by MarketWatch had expected new claims to total 271,000. Despite the increase, initial claims have been under the key 300,000 level for the past six months, the longest stretch since 2000. The average of new claims over the past month, meanwhile, rose by 3,250 to seasonally adjusted 275,500, the Labor Department said. The four-week average smooths out sharp fluctuations in the more volatile weekly report and is seen as a more accurate predictor of labor-market trends. Some 2.26 million people were already collecting weekly unemployment benefits, known as continuing claims, in the seven days ended Aug. 22. That was down 9,000 from the prior week.

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DreamWorks Animation SKG inc. will not renew its distribution deal with Walt Disney Co. , and may instead ink a deal with Universal, the studio owned by Comcast Corp. , Variety reported, citing unnamed sources. The Disney deal with DreamWorks dates back to 2009, but Disney has since acquired Marvel and Lucasfilm, suggesting it is focusing on branded films, Variety reported. Disney will release two more films from the studio, both of which were directed by Stephen Spielberg, before the current deal expires, said the magazine. Spielberg was an executive producer on Universal’s recent hit, “Jurassic World.” In its latest quarter, DreamWorks’ loss more than doubled as the studio struggled to overhaul its operations.

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The European Central Bank, as expected, made no changes to official interest rates on Thursday. The ECB’s Governing Council left the refi rate at 0.05% and maintained the rate on deposits parked overnight at the bank at negative 0.2%. ECB President Mario Draghi’s news conference at 2:30 p.m. Frankfurt time, or 8:30 a.m. Eastern, will be watched to see if the central bank is prepared to ramp up its quantitative-easing program in the wake of turmoil in financial markets, concerns about China, and falling oil prices.

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EBay Inc.’s stock edged up 0.7% in premarket trade Thursday, after the e-commerce company was upgraded by Piper Jaffray on the belief the current valuation fully reflects the challenges the company faces. Analyst Gene Munster raised his rating to neutral from underweight, but cut his stock price target to $30, which is 12% above current levels, from $50. “While historically consumers have used the Internet for price discovery and comparison, we believe that e-commerce has matured such that consumers are more intrigued with e-commerce as a convenience method of shopping. This is disadvantageous to eBay’s experience, which requires some level of hunt-and-peck shopping,” Munster wrote in a note to clients. “Having said that…valuation suggests limited downside.” The stock has gained 3% over the past three months, while the S&P 500 has lost 7.8%. Shares of PayPal Holdings , the e-payment company spun off from eBay in July, have lost 4.4% since the first day of trade.

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Campbell Soup Co. reported on Thursday a fiscal fourth-quarter profit that declined to $128 million, or 22 cents a share, from $234 million, or 41 cents a share, in the same period a year ago. Excluding non-recurring items, such as charges related to cost-cutting initiatives, adjusted earnings per share rose to 43 cents from 41 cents, beating the FactSet consensus of 42 cents. Sales fell 9% to $1.69 billion, matching the FactSet consensus, as declines in the packaged food company’s baking and snacking, international simple meals and U.S. beverages businesses offset increases in its U.S. simple meals and its Bolthouse and food services businesses. Excluding the impact of currency movements and the fact that there was one less week in the quarter compared with the year before, sales would have increased 1%. For fiscal 2016, the company expects sales to be flat to up 1% from $8.08 billion in 2015, while the FactSet consensus of $8.19 billion implies 1.4% growth. Adjusted EPS is expected to be $2.53 to $2.58, surrounding the FactSet consensus of $2.55. The stock, which was still inactive in premarket trade, has gained 0.8% over the past three months, while the S&P 500 has lost 7.8%.

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Medtronic Plc. said Thursday it has net income of $820 million, or 47 cents a share, in its second fiscal quarter, with the EPS number down 34% from the year-earlier period. The Dublin, Ireland-based medical technology company said adjusted per-share earnings came to $1.02 a share, a penny ahead of the FactSet consensus of $1.01. Revenue rose 12% to $7.274 billion, also ahead of the FactSet consensus of $7.063 billion. Chief Executive Omar Ishrak said all four groups contributed to revenue growth. Those groups are cardiac and vascular, minimally invasive therapies, restorative therapies and diabetes. The company reiterated guidance for the full fiscal year of adjusted EPS of $4.30 to $4.40, and for revenue growth of 4% to 6% on a constant currency basis. Shares were not yet active in premarket trade, but are down about 1% in the year so far, while the S&P 500 has lost 5.4%.

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