Category: Stock Market News

Merck & Co. Inc. shares dipped 1.6% in morning trade Tuesday after the company lost a patent case to Gilead Sciences Inc. . Gilead shares rose 0.4% in morning trade. The case, which involves alleged patent infringement by Gilead’s hepatitis C therapy Sovaldi on a patent held by Merck’s Idenix Pharmaceuticals unit, was decided against Merck late Friday. Previously, a jury ruled in favor of Merck and granted the company $2.5 billion. However, the judge reversed the decision late Friday in a surprise decision and “determined the Idenix patent to be invalid for lack of enablement,” said RBC Capital Markets analyst Brian Abrahams. Without the damages charge and associated royalties, there is an about $2 upside to Gilead’s price target, Abrahams said, increasing the company’s price target to $94. Gilead shares have surged 12.4% over the last three months, compared with a 2.4% rise in Merck shares and a 5.5% rise in the S&P 500 .

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The Supreme Court on Tuesday declined to hear a suit filed by shareholders of Fannie Mae [s:fnma] and Freddie Mac [s:fmcc], the two mortgage finance giants taken into government conservatorship at the height of the 2008 financial crisis. In 2012, the U.S. Treasury amended the terms of the 2008 bailout to require Fannie and Freddie’s conservator to sweep quarterly profits to the government, a move which effectively wiped out shareholders. They’ve fought the “net worth sweep” in court for years, including in Perry Capital LLC v. Mnuchin, a 2017 case before the U.S. Court of Appeals for the D.C. Circuit, which the shareholders appealed after it was decided in the government’s favor. Congress has attempted to find a long-term role for the two enterprises, but has failed, even as the companies have remitted nearly all their capital to the government.

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Chipotle Mexican Grill Inc. shares were upgraded to hold from sell by analysts at Stifel on Monday as they take a wait and see approach following the company’s appointment of Brian Niccol as chief executive officer. “We are moving to the sidelines as we wait for the new CEO to provide his turnaround plan for the company,” lead analyst Chris O’Cull wrote in a note. “We believe new investors are taking a more optimistic view of the company’s prospects, arguing the new CEO has the experience to reverse the declining traffic trend and recover margin. As a result, we believe investors’ ebullience can support the stock in spite of weaker fundamentals.” Chipotle lured Niccol away from Yum Brands Inc.-owned Taco Bell, where he was the chief executive for three years. “Mr. Niccol has pushed the boundaries at Taco Bell and solidified their position in the consumer’s awareness. Chipotle needs a similar reboot to help the brand reengage lapsed customer,” O’Cull wrote. Chipotle shares were down a little more than 1% in early trade on Tuesday, and have declined more than 29% in the last 12 months. By comparison, the S&P 500 index is up roughly 16%.

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Brazilian steak house chain Fogo de Chão Inc. said Tuesday it has reached an agreement to be acquired by private-equity firm Rhone Capital units in an all-cash deal valued at $560 million. Under terms of the deal, Fogo de Chão shareholders will receive $15.75 a share in cash, equal to a 25.5% premium over its closing share price on Friday. The deal is expected to close in the second quarter. The news comes after the company’s board conducted a review of its strategic options; the company went public in 2015. Fogo operates as a churrascaria, offering fire-roasted, high-quality meats that are prepared and served Brazilian style by gaucho chefs. Shares were halted for the news, but have fallen 13% in the last 12 months, while the S&P 500 has gained 16%.

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U.S. stock benchmarks drifted lower at the open on Tuesday, with investors finding few reasons to keep pushing shares higher following a six-session rally that gave indexes their biggest one-week percentage gain in years. The Dow Jones Industrial Average was off 90 points, or 0.3%, at 25,142, the S&P 500 index was off 0.2% at 2,727. The Nasdaq Composite Index , meanwhile, was off 0.2% at 7,227. Wall Street investors are watching a rising dollar and climbing bond yields, both of which could make equities less attractive at current levels, even as macroeconomic conditions and corporate earnings are still seen as strong. The dollar, as measured by the U.S. ICE Dollar Index was up 0.5% at 89.57, while the 10-year Treasury note was at 2.90%. In corporate news, Rite Aid surged after privately held grocer Albertsons Cos. said it would buy the rest of the drugstore chain that Walgreens Boots Alliance Inc. isn’t buying.

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Special Counsel Robert Mueller has charged attorney Alex Van Der Zwaan with making false statements to the Federal Bureau of Investigation. Van Der Zwaan lied about his interactions with former Trump campaign aide Rick Gates in September 2016, according to the court documents.

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Women’s clothing line Guess Inc. said Tuesday that co-founder Paul Marciano will relinquish his daily duties while the company conducts an investigation into allegations of sexual harassment. Marciano has denied the allegations, made by model Kate Upton, who has worked for the brand for several years. The investigation is being carried out by law firm O’Melveny & Myers LLP. Guess “takes very seriously any allegations of sexual misconduct, is committed to maintaining a safe work environment, and looks forward to the completion of a thorough investigation of all the facts,” the company said. Shares were flat at the open, but have fallen 15% in the month since the allegations first surfaced, while the S&P 500 has fallen 3.5%.

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Gap Inc. shares slid 7% in premarket trade Tuesday, after the company said Gap brand Chief Executive and President Jeff Kirwan is leaving the company. A search for a replacement is under way. Brent Hyder, current Gap Inc. executive vice president, global talent and sustainability, will act as interim brand head. Hyder has served as chief operating officer at Gap brand, prior to taking on his current role. Gap shares have gained 36% in the last 12 months, while the S&P 500 has gained 16%.

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Gap Inc. shares slid 2.3% in premarket trade Tuesday, after the company said Gap brand President Jeff Kirwan is leaving the company. A search for a replacement is under way. Brent Hyder, current Gap Inc. executive vice president, global talent and sustainability, will act as interim brand head. Hyder has served as chief operating officer at Gap brand, prior to taking on his current role. Gap shares have gained 36% in the last 12 months, while the S&P 500 has gained 16%.

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Perrigo Co. PLC shares declined 1.2% in premarket trade Tuesday after the company said Bayer AG is suing it over a generic rosacea product after Perrigo filed for Food and Drug Administration approval for it. Bayer makes the branded product, Finacea Foam, which is approved for the raised spots and pimple-like bumps that are symptoms of mild to moderate rosacea. Finacea Foam, which is known to be expensive, brought in sales of $54 million last year. Bayer shares rose 0.2% in premarket trade. Perrigo shares have surged 5% over the last three months, while Bayer shares have dropped 3.7%, compared with a 5.8% rise in the S&P 500 .

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