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Shares of Corrections Corp. of America surged 9% in morning trade Friday, but pared earlier gains of as much as 11%, after Moody’s Investors Service cut the for-profit prison operator’s credit rating to “junk” status. The credit rating agency downgraded the real estate investment trust’s (REIT) senior unsecured rating to Ba1 from Baa3, which is Moody’s lowest “investment grade” rating, and revised the rating outlook to negative from stable. On Thursday, Corrections Corp.’s shares plunged 35% after the Justice Department said it planned to phase out the use of for-profit prison operators. Moody’s said that while the BOP represented just about 9% of Corrections Corp.’s revenue, the steep selloff in Corrections Corp.’s stock has closed access to capital markets at least in the short term. “The rating actions and the negative outlook reflects the substantial uncertainty regarding the ultimate effect that the Department of Justice announcement will have on the REITs cash flows,” Moody’s said in a statement. The stock has lost 28% year to date, while the S&P 500 has gained 6.5%.

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From:: Stock Market News

GEO Group Inc. said Friday that the Federal Bureau of Prisons (BOP) has rescinded the renewal of the contract to operate the company-owned D. Ray James Correctional Facility. That’s an about face from GEO’s announcement earlier Friday, in which the company said the BOP renewed the contract to run the Georgia prison. “Based on ongoing discussions between GEO and the BOP, GEO expects to receive a new contract modification to operate the facility under new terms to be negotiated,” GEO said in a statement. The stock is currently halted for news. Prior to the halt, it had shot up 13% after the contract renewal announcement. On Thursday, the stock had plunged 40% after the Justice Department said it planned to phase out the use of for-profit prison facilities. The stock had lost 33% year to date, while the S&P 500 has gained 6.5%.

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From:: Stock Market News

U.S. stocks slumped at the open Friday as investors wrestled with the possibility that the Federal Reserve could move to raise interest rates soon. The three main benchmarks were on track to log modest weekly losses. The Dow Jones Industrial Average fell 64 points, or 0.4%, to 18,533, while the S&P 500 index , declined 7 points, or 0.3%, at 2,179. Meanwhile, the Nasdaq Composite Index dropped 15 points, or 0.3%, to 5,224. Despite Friday’s decline, the Dow, the S&P 500, and the Nasdaq Composite were all on track to post a weekly fall of at least 0.3%. Elsewhere, Applied Materials Inc. shares were trading higher after the semiconductor maker late Thursday reported that orders hit a record, while shares of Gap Inc. slipped after the clothing retailer reported a drop in second-quarter sales.

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From:: Stock Market News

Stellar Acquisition III Inc. , a blank check company based in Greece, priced its initial public offering Friday at $10 a share. The company sold 6.5 million units to raise $65 million. Each unit is made up of one share of common stock and one warrant, which allows the owner to buy at share of common stock for $11.50. The stock is expected to trade Friday on the Nasdaq Capital Market under the symbol “STLRU.” Maxim Group LLC was the sole book-running manager.

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From:: Stock Market News

Guggenheim Investments said Friday it will close and liquidate its Guggenheim Emerging Markets Real Estate ETF in September. The company said Sept. 20 will be the last day of trading for the ETF, which has $2 million in assets. Guggenheim Investments is the eighth-biggest U.S. exchange traded product provider with more than $29 billion in assets.

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From:: Stock Market News

Madison Square Garden Co. reported a fourth quarter net loss of $58.4 million, or $2.39 per share, compared with a loss of $1.1 million, or 4 cents per share, for the same period last year. The FactSet consensus was for a loss of 91 cents per share. Revenue totaled $217.8 million, down from $255 million and missing the FactSet consensus of $219 million. MSG Entertainment had revenue of $84 million, down 10% year over year primarily due to lower revenues for the annual production of the New York Spectacular Starring the Radio City Rockettes, which had fewer scheduled performances. MSG Sports revenue was down 17% to $133.5 million, primarily due to lower playoff-related revenue. Madison Square Garden shares are inactive in Friday premarket trading, but up 16.3% for the year so far. The S&P 500 Index is up 7% for the year to date.

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From:: Stock Market News

GEO Group Inc.’s stock soared 10% in active premarket trade Friday, bouncing after the plunge in the prior session, after the company said the Federal Bureau of Prisons (BOP) renewed a contract for the D. Ray James Correctional Facility. The renewal term for the company-owned Georgia facility is through Sept. 30, 2018 under its existing 10-year contract, which is effective through Sept. 30, 2022. “We believe that this contract renewal is indicative of the BOP’s continued focus on quality as it evaluates its current privately-operated facilities,” said Chief Executive George Zoley. GEO’s stock had plummeted 40% on Thursday, the biggest one-day drop since it went public in July 1994, after the Justice Department announced a decision to phase out the use of for-profit prison facilities. The stock had lost 33% year to date through Thursday, while the S&P 500 had gained 7%. Shares of fellow prison operator Corrections Corporation of America climbed 12% ahead of the open.

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From:: Stock Market News

Deere & Co. on Friday posted quarterly earnings that beat Wall Street’s expectations, but sales from the farming equipment maker fell short. Third-quarter earnings were $488.8 million, or $1.55 a share, compared with $511.6 million, or $1.53 a share, a year ago. Net sales from equipment operations came in at $5.86 billion, down from $6.84 billion in the same period last year. Analysts polled by FactSet had expected earnings of 94 cents a share on sales of $6.04 billion. “John Deere’s performance in the third quarter reflected the continuing impact of the global farm recession as well as difficult conditions in construction equipment markets,” said Deere’s Chief Executive Samuel Allen in a statement, but added that all of its businesses “remained profitable with the Agriculture & Turf division reporting higher operating profit than last year.”

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From:: Stock Market News

Shares of Foot Locker Inc. surged 4.1% in premarket trade Friday, after the athletic shoes and apparel seller reported fiscal second-quarter profit and sales that beat expectations. For the quarter ended July 30, earnings rose to $127 million, or 94 cents a share, from $119 million, or 84 cents a share, in the same period a year ago. The FactSet earnings-per-share consensus was 90 cents. Revenue rose to $1.78 billion from $1.70 billion, above the FactSet consensus of $1.76 billion, with same-store sales growth of 4.7% beating expectations of a 3.8% rise. Merchandise inventories increased 1.7% to $1.34 billion. “Within the second quarter, we drove comparable sales gains across basketball, running, and classic footwear, as well as apparel,” said Chief Executive Richard Johnson. The stock had dropped 5.2% year to date through Thursday, while the S&P 500 had gained 7%.

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From:: Stock Market News