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NEW YORK (MarketWatch) — Asset purchases, or quantitative easing, by the Federal Reserve is an effective stimulus tool if the economy falters and interest rates go back to zero, said New York Fed President William Dudley, on Friday. In remarks to the Chicago Booth monetary policy forum, Dudley said he disagreed with one of the conclusions of a paper by prominent Wall Street economists that argued quantitative easing may only have a modest impact to help get the economy out of a downturn. Dudley said asset purchases work best when they are open-ended. He also said the Fed should be able to buy mortgage-backed securities in the next crisis, despite calls by some in Congress and on Wall Street to curb such purchases.

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Shares of Cinemark Holdings Inc. surged 5% Friday, after the company blew past profit estimates for the fourth quarter and raised its dividend. Plano, Tx.-based Cinemark said it had net income of $95.1 million, or 82 cents a share, in the quarter, up from $77.0 million, or 66 cents a share, in the year-earlier period. revenue rose to $750.0 million from $700.9 million. The FactSet consensus was for EPS of 48 cents and revenue of $746.0 million. Admissions revenue rose 4.5%, while concession revenues rose 10%. Chief Executive Mark Zoradi said the earnings beat came even as the U.S. box office was weaker than in the year-earlier period. The company is now raising its dividend by 10% to $1.28 a share on an annualized basis. The fourth-quarter dividend of 32 cents will be paid on March 22 to shareholders of record as of March 8. MKM analysts said the earnings were better than they were expecting. “Cinemark once again demonstrated its consistent ability to outpace the industry on an absolute growth basis and on a per screen basis. These datapoints further our view of Cinemark as the best in class operator,” said analyst Eric Handler, who has a buy rating on the stock. Shares have fallen 3.3% in the last 12 months, while the S&P 500 has gained 15%.

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Fitch Ratings downgraded Coca-Cola Co.’s rating to A from A-plus on Friday, after the company unveiled long-term financial targets that signaled that additional debt reduction is not a company priority. Coca-Cola is targeting a net debt leverage ratio of 2.0 times to 2.5 times, using $7 billion of offshore cash to pay down debt, a $4.6 billion tax on accumulated foreign earnings, share repurchases of up to $1 billion in 2018 and a long-term dividend pay-out ratio of 75%. “The ratings downgrade reflects materially higher net leverage compared to Fitch’s previous expectations,” the agency said in a statement. Fitch also views the new targets as providing the company with the means to pursue bolt-on acquisitions to broaden its beverage portfolio, while continue to reward shareholders with dividends and share buybacks. Shares were up 0.5% Friday, and have gained 5% in the last 12 months, while the Dow Jones Industrial Average has gained 20% and the S&P 500 has gained 15%.

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Shares of Western Digital Corp. are up 3.9% in Friday morning trading after analysts at Stifel resumed coverage with a buy rating and took an upbeat view on the role of hard disk drives going forward. The analysts, led by Kevin Cassidy, believe that “increased data generation will keep [hard disk drives] relevant” and that safety concerns surrounding new autonomous driving technologies will stir demand for “large capacity” drives. They’re optimistic about the company’s new microwave assisted magnetic recording (MAMR) drives and think that a joint venture with Toshiba “provides stability.” The analysts also resumed coverage of Seagate Technology PLC with a hold rating. Western Digital shares are up 18% over the past 12 months, while Seagate shares are up 11% and the S&P 500 Index is up 15%.

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Shares of sandwich chain Potbelly Corp. soared 7% in early trade Friday, after upbeat guidance offset a revenue miss in the fourth quarter. Chicago-based Potbelly said it had a net loss of $7.3 million, or 29 cents a share, in the quarter, after net income of $2.0 million, or 8 cents a share, in the year-earlier period. The loss includes a $5.7 million tax charge and a $5.0 million impairment charge. Adjusted per-share earnings came to 8 cents, matching the FactSet consensus. Revenue rose 9.6% to $112.1 million, just below the FactSet consensus of $113.0 million. Same-store sales fell 2.4%, wider than the FactSet consensus for a decline of 1.8%. For 2018, the company said it expects same-store sales growth to be flat, and adjusted EPS to range from 37 cents to 39 cents. That’s better than the FactSet consensus for same-store sales to fall 0.2% and EPS to come in at 36 cents. Shares have fallen 3.8% in the last 12 months, while the S&P 500 has gained 15%.

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Shares of Altaba Inc. gained 0.9% in Friday morning trading after MKM Partners analyst Rob Sanderson raised his price target on shares to $112 from $76 ahead of the company’s strategy call with investors that’s set to take place next Tuesday. Altaba has a stake in Alibaba Group Holding Ltd. . “We believe that management is highly focused on unlocking shareholder value,” he wrote. “Now that details of tax reform are more conclusive, we expect the company will take more aggressive action.” His price target increase reflects a “substantially lower tax rate assumption” and his recently increased target for Alibaba. Separately, analysts at J.P. Morgan raised their price target to $95 from $60. They wrote that Altaba “now trades at a ~26% discount to pre-tax NAV, tighter than the ~31% discount at the time of our initiation, but now wider than our estimated effective tax rate.” Altaba shares are up 66% in the past 12 months, while the S&P 500 Index is up 15%.

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From:: Stock Market News

The Dow Jones Industrial Average opened higher on Friday as the stock benchmarks attempted to shake off concerns about rising bond yields and inflation to finish the week on an uptrend. The Dow was up about 150 points, or 0.6%, at 25,103, while the S&P 500 index was up 0.5% at 2,717. The Nasdaq Composite Index rose 0.6% at 7,253. For the shortened-holiday week, the Dow and the S&P 500 were on pace for weekly drops of 0.2%, while the Nasdaq Composite, which booked its fourth daily decline in a row on Thursday, marking its longest skid since November of 2016, was still set for a weekly gain of about 0.3%. Looking ahead, markets were awaiting a release from a report on monetary policy at 11 a.m. Eastern from the Federal Reserve, which comes ahead of Jerome Powell’s inaugural testimony before congress as Fed boss next week. In corporate news, Shares of Blue Buffalo Pet Products Inc. soared after General Mills Inc. said it planned on buying the pet-products company in an $8 billion deal. Weekly moves for equities have been market by continued volatility as investors fret about rising borrowing costs and worries that resurgent inflation may prompt the Fed to hike interest rates at a quickened pace. On Wednesday, following minutes from the central bank’s policy committee gathering in January, which suggested that rate hikes were on the horizon, the yield of the benchmark 10-year Treasury note rose to a fresh four-year peak at 2.956%, prompting a selloff in stocks. However bond yields, which move in the opposite direction of prices, have since moderated.

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From:: Stock Market News

S&P Global Ratings downgraded General Mills Inc. to BBB from BBB-plus on Friday, after the company said it is acquiring Blue Buffalo Pet Products Inc. for about $8.0 billion. The new rating is just two notches above speculative, or “junk” status. The rating agency said it expects General Mills to finance the deal with a combination of new debt, cash on hand and equity, raising its leverage to about 4.5 times from 3.2 times for the 12 months to Nov. 26, 2017. “The downgrade reflects our belief that General Mills’ pro forma credit protection measures will deteriorate following this acquisition and will remain weaker than our prior expectations for several years after the close of the transaction,” analyst Bea Chiem wrote in a report. S&P expects management to meet their pledge to restore credit measures by issuing equity and suspending its dividend. “We expect General Mills to be able to effectively integrate Blue Buffalo and continue to grow the brand and gain market share at food, drug, and mass retailers,” said Chiem.

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From:: Stock Market News

GNC Holdings Inc. shares jumped 5% in Friday premarket trading after the company announced an extended maturity date of term loans to March 2021, a two-year extension. With this amendment, the health and wellness retailer will continue working with Harbin Pharmaceutical Group Holding Co. Ltd. on a previously announced $300 million strategic investment. GNC’s revolving credit facility will be cancelled once the amended and restated term loan facility closes and GNC will enter into a new $100 million ABL Revolver. GNC shares are down more than 54% for the last year while the S&P 500 index is up 14.4% for the period.

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From:: Stock Market News

Specialty chemicals company Albemarle Corp. said Friday its board has approved an almost 5% hike in its quarterly dividend to 33.50 cents a share from 32 cents. The new dividend will be payable April 2 to shareholders of record as of March 15. Shares rose 1.2% premarket, and are up 22% in the last 12 months, while the S&P 500 has gained 14%.

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From:: Stock Market News