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Moody’s Investors Service downgraded McDonald’s Corp.’s senior unsecured rating to Baa1 from A3 Wednesday, after the company said it will ramp up returns to shareholders and issue debt to do so. McDonald’s told investors at a meeting on Tuesday that it plans to return $30 billion to shareholders in the three-year period to end 2016, and will fund $10 billion of that total with fresh debt. “Overall, Moody’s views this debt financed share repurchase initiative as McDonald’s maintaining an aggressive financial policy towards shareholders that will result in significantly higher debt levels, weaker credit metrics and further limit its financial flexibility.” Moody’s Senior Credit Officer Bill Fahy said in a statement. The Baa1 rating is just three notches above speculative, or junk, status. “In addition, McDonald’s ability to strengthen credit metrics from these elevated levels could be challenging in the event the company’s turnaround plans and business restructuring were delayed or fell short of expectations or shareholder returns increased,” said Fahy. Standard & Poor’s downgraded McDonald’s rating to A-minus from BBB-plus on Tuesday. McDonald’s Shares were up 1% in midday trade.

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The cost of protecting debt issued by department store chain Macy’s Inc. against potential default has climbed to its highest level in three years, as warmer-than-usual autumn weather keeps shoppers away from stores and discourages the purchase of winter goods, Fitch Solutions said Wednesday. Five-year credit default swaps written on Macy’s bonds have widened by 16% in the last week, and are now 140% wider than they were at the start of the year, said Fitch. After trading above the BBB+ level (lowest level of investment grade) for the past year, the CDS are now trading in speculative, or junk bond territory, said Fitch. “In addition to the unseasonably warm weather slowing down winter clothing sales, souring market sentiment for Macy’s is likely coming from weaker foot traffic at department stores,” Fitch Director Diana Allmendinger said in a statement. Macy’s earlier reported third-quarter earnings that fell short on sales, and lowered its earnings outlook for the rest of the year. Shares were down 14% in early trade, and are down 40% in the year so far, while the S&P 500 has gained about 1.2%.

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Horizon Pharma Plc shares tumbled 18% in early trade Wednesday, after pharmacy-benefit manager Express Scripts Holding Co. said it was dropping a pharmacy that mostly sold medications made by Horizon. Horizon blasted back with a statement of its own. “Our philosophy of ensuring that patients get the medicine their doctors prescribe is threatening Express Scripts’ profiteering and exposing what we believe is a lack of care for patients and respect for physicians,” Chief Executive Timothy Walbert said in a statement. Express said it is suing Dublin-based Horizon seeking $140 million in damages for failing to live up to its contractual agreement. It said it was dropping Linden Care Pharmacy from its network because it was a “captive pharmacy” of Horizon’s. The company said it is also reviewing other pharmacies in its network to see if they too are captive to drug makers. The news comes shortly after Valeant Pharmaceuticals International Inc. , under pressure from investors and politicians, dropped specialty pharmacy Philidor. Horizon shares have gained 41% in the year so far, while the S&P 500 is up about 1.2%.

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U.S. stocks opened higher on Wednesday with the benchmark S&P 500 eyeing a second up day in a row after halting a four-session losing streak. Trading volumes are expected to be low as bond markets and banks are closed in observance of Veterans Day. The S&P 500 opened 4 points, or 0.2%, higher at 2,085. The Dow Jones Industrial Average added 34 points, or 0.2%, to 17,797. The Nasdaq Composite began the day up 13 points, or 0.3%, at 5,096.

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Apache Corp.’s stock slumped 6.2% in premarket trade Wednesday, after Anadarko Petroleum Corp. said it was withdrawing its offer to buy the oil and gas company. Anadarko Chief Executive Al Walker said in a statement that Anadarko recently offered to buy Apache in an all-stock deal which included a “modest” premium, but efforts to pursue a deal were rejected. He indicated that the current price of the stock, which has run up 12% this week, has made a deal less attractive. “Our efforts to enter into a mutually acceptable confidentiality agreement for the purpose of exploring the merits of a potential transaction were summarily rejected and no discussions of substance occurred,” Walker said. “We are unwilling to pursue the transaction without access to detailed non-public information, and based on our analysis, which shows that Apache appears to trade at or near full value currently, the offer was withdrawn.” Apache’s stock rallied this week following a Bloomberg report that Apache had received an unsolicited takeover offer. Anadarko’s stock surged 2.9% in premarket trade.

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Macy’s Inc. has partnered with eyewear company Luxottica Group S.p.A. to bring LensCrafters stores to 500 Macy’s locations over the next three years, the retailer said in a statement. Macy’s already has 670 of Luxottica’s Sunglass Hut locations in its stores. The first LensCrafters will open in April 2016 with 100 planned by the end of the year. Macy’s shares are down 9.4% in pre-market trading.

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Supermarket chain The Kroger Co. said Wednesday it has agreed to buy grocery chain Roundy’s Inc. in a deal valued at about $800 million, including debt. Kroger will pay $3.60 per Roundy’s share in cash, for a premium of about 65% over Roundy’s closing share price on Nov. 10. It will finance the deal with debt, and will refinance Roundy’s existing debt of $646 million, the companies said in a joint statement. The new entity will operate 2,774 supermarkets and employ more than 422,000 people across 35 states and the District of Columbia. Kroger expects it to boost earnings in its first full year after closing. The deal is expected to close by year-end. Roundy’s shares were halted in premarket trade, but are down 55% in the year so far, while the S&P 500 has gained about 1.1%.

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Wayfair , a home goods site, was upgraded to strong buy from outperform by Raymond James analysts after the company reported better than expected results Tuesday. The analysts increased the price target to $60 from $55. The analysts cited Wayfair’s strong third-quarter results, particularly with revenue growth, Wayfair’s gains in the online home goods market and better brand awareness for the company. Wayfair shares were up 1.5% in pre-market trade Wednesday.

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Macy’s Inc. shares dropped 8.5% revenues fell short of estimates and it lowered full-year guidance. The company said it had net income of $117 million, or 36 cents per share, in the third quarter, down from 61 cents per share, or $217 million for the same period last year. Adjusted earnings were 56 cents per share compared with a FactSet consensus of 55 cents. The retailer reported sales of $5.88 billion versus $6.2 billion for the third quarter 2014. The FactSet consensus was $6.09 billion. Macy’s revised full-year EPS guidance to $4.20 to $4.30, excluding impairment chargest associated mostly with announced store closures. The previous guidance was for $4.70 to $4.80. The company lowered full-year same-store sales guidance on an owned plus licensed basis to a decline of 1.8% and 2.2% from flat. Fourth-quarter same-store sales guidance is a 2% to 3% decline.

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J.C. Penney Co. Inc.’s stock surged 9.5% in premarket trade Wednesday, after the department store chain reported fiscal third-quarter same-store sales growth that beat expectations, and announced a settlement of a class action lawsuit alleging false advertising. Same-store sales rose 6.4% for the quarter ended in October, above the FactSet consensus of 5.7%. Chief Executive Marvin Ellison also said in a statement that gross margin and earnings for the quarter “exceeded our expectations.” As part of the lawsuit settlement, the company will make $50 million available to settle claims. The lawsuit, which was filed in 2012, alleges J.C. Penney’s practices surrounding price comparison advertising of private and exclusive branded products did not comply with California law. The company said it denies the allegations, but decided to settle the lawsuit to eliminate uncertainties and litigation expenses. “While we are confident of our position, resolving this litigation removes any uncertainty and risk, which we believe is in the best interest of our shareholders,” CEO Ellison said. The stock has soared 34% year to date through Tuesday, while the S&P 500 has gained 1.1%.

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From:: Stock Market News