Category: Stock Market News

U.S. stocks advanced in volatile trade after the Federal Reserve on Wednesday hiked interest rates by 25 basis points as had been widely expected. The S&P 500 rose 2 points, or 0.1%, to 2,274 while the Dow Jones Industrial Average gained 44 points, or 0.2%, to 19,955. The Nasdaq Composite Index added 11 points to 5,475. “In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1/2 to 3/4 percent,” the central bank said in a statement.

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Generic drug stocks dropped Wednesday, after a report that U.S. regulators filed the first criminal charges in a sweeping investigation into suspected price collusion. The U.S. Justice Department charged two former executives of Heritage Pharmaceuticals Inc., former Chief Executive Jeffrey Glazerof, and former President Jason Malek, Bloomberg reported, citing court filings. Heritage was not immediately available for comment. The investigation, which Bloomberg reported last month, involves executives of more than a dozen companies, and alleges they agreed with one another to raise prices. Among the shares of some of the companies mentioned in the report, Mylan N.V.’s slumped 2.1%, Teva Pharmaceuticals Industries Ltd.’s shed 2.1%, Endo International PLC’s dropped 4%, Lannett Co. Inc.’s slid 1.2%, Impax Laboratories Inc.’s fell 3.6% and Taro Pharmaceutical Industries Ltd. declined 0.4%. The SPDR S&P Pharmaceuticals ETF , which slipped 0.7% in midday trade, has tumbled 24% year to date, while the S&P 500 has gained 11%.

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Infidelity website Ashley Madison parent Ruby said Wednesday that it has paid $1.66 million to settle with the U.S. Federal Trade Commission the state attorneys generals regarding investigations into business practices. As part of the settlement, in which Ruby “neither admits nor denies the allegations,” the amount was paid to the various states participating in the settlement. “Today’s settlement closes an important chapter on the company’s past and reinforces our commitment to operating with integrity and to building a new future for our members, our team and our company,” said Ruby Chief Executive Rob Segal.

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Alaska Air Group Inc.’s corporate credit rating was downgraded to junk status at S&P Global Ratings, which cited the air carrier’s increased debt following Wednesday’s closing of its $4 billion acquisition of Virgin America Inc. The acquisition included the assumption of $1.4 billion in debt and leases. “This increase in Alaska’s debt has caused the company’s previously very strong financial risk profile to decline substantially,” S&P Global credit analyst Tatiana Kleiman. Alaska Air’s rating was cut to BB+ from BBB-, which is the ratings agency’s lowest investment grade rating. The outlook is stable. S&P Global said it believes Alaska Air faces integration risk as it combines the two airlines. Alaska Air’s stock slipped 0.4% in morning trade. It has gained 7.5% year to date, while the NYSE Arca Airline index has soared 29% and the S&P 500 has gained 11%.

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Oil futures cut their losses Wednesday after the U.S. Energy Information Administration reported that domestic crude supplies fell by 2.6 million barrels for the week ended Dec. 9. The American Petroleum Institute late Tuesday reported a climb of 4.7 million barrels, according to sources. Analysts and traders polled by The Wall Street Journal forecast a stockpile decline of 1.7 million barrels, on average. Gasoline supplies rose 500,000 barrels while distillate stockpiles fell 800,000 barrels, according to the EIA. January crude traded down 58 cents, or 1.1%, to $52.40 a barrel on the New York Mercantile Exchange, up from $52 before the data.

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Shares of Express Scripts Holding Co. turned sharply lower Wednesday, falling 4.1% in morning trade, after Chief Executive Timothy Wentworth said in a conference call with analysts that debate over drug pricing would not go away. Earlier, the stock rose as much as 1.1% in premarket trade, after the pharmacy benefit manager affirmed its 2016 adjusted earnings outlook and provided an in-line outlook for 2017. When asked by J.P. Morgan analyst Lisa Gill whether he had heard anything out of D.C. that could be potentially negative for the company or the industry, Wentworth said that while it was still early, he had not seen anything to cause him to be hugely concerned, according to a transcript provided by FactSet. He if there was a complete change of the Affordable Care Act, they would see a transition of members, as the company has business in the exchanges, but that the company regularly helps clients transition members. “I can’t point to anything that right now beyond the overarching conversation about drug pricing,” Wentworth said, according to the FactSet transcript. “And there is no question in my mind that that conversation is not going to go away, and that we need to demonstrate using both our tools, but our clients’ voice as well to demonstrate that.” The stock has tumbled 20% year to date, while the S&P 500 has gained 11%.

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The U.K. will publish its plan for Brexit in February at the earliest, according to media reports Wednesday. The blueprint will be released when the government is ready, but that it won’t be next month, the minister in charge of Brexit, David Davis, told lawmakers. Last week, the U.K.’s parliament voted to approve a Brexit timetable put forward by Prime Minister Theresa May after she agreed to outline her goals. May, who wants to begin negotiations with the European Union by the end of March, is facing pressure to cooperate with lawmakers due to a legal battle. The Supreme Court is weighing whether the government is obliged to consult parliament on its Brexit plans, and the judges are expected to deliver their decision in January.

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Caleres Inc. said that it has acquired men’s footwear and accessories brand Allen Edmonds for $255 million. Caleres owns a portfolio of shoe brands including Naturalizer, Sam Edelman, Via Spiga and Dr. Scholl’s Shoes. The acquisition, announced late Tuesday, is being funded with cash and revolving credit. Caleres says it will provide more detail about the acquistion during its fourth-quarter conference call, which is currently scheduled for Mar. 21, 2017. Caleres shares are down 1.2% in Wednesday trading, but are up 24% for the past year. The S&P 500 index is up 12.4% for the last 12 months.

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U.S. stocks traded modestly lower Wednesday as investors awaited the outcome of the Federal Open Market Committee meeting. Investors largely expect a quarter percentage point increase increase in the Fed funds rate, but will closely examine the accompanying statement and Fed Chairwoman Janet Yellen’s comments at the news conference for any clues on the future pace of rate hikes. The main benchmarks were hovering near record levels, with Dow industrials within 125 points of the psychologically important 20,000 level. Market reaction to disappointing retail sales figures and producer prices index data ahead of the opening bell was muted. The S&P 500 was off by a point, or 0.1%, to 2,269. The Dow Jones Industrial Average slipped 21 points, or 0.1%, to 19,893. The Nasdaq Composite began the session down 2 points at 5,462.

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Raymond James downgraded Universal Health Services Inc. Wednesday morning to market perform after Sen. Chuck Grassley (R-Ia.) requested an update on a federal investigation into the company. The additional scrutiny takes “the political risk to a more dangerous level” and “could invite more caution and/or red tape into the admissions process- either externally or from self-policing,” Raymond James analyst John Ransom said. Grassley’s letter referenced a BuzzFeed investigation into UHS which claimed the company used patient admissions to make profits at patients’ expense. UHS said last week that it disputed and denied the story and has said that one of the article’s claims — that patients are wrongly coded for “suicidal ideation” — doesn’t actually provide an economic benefit to the company. Even so, the latest claims on top of an ongoing investigation by the investor general means “we think the risk-reward is no longer compelling,” said Ransom. UHS shares, which dropped 12% the day the BuzzFeed article was published, have dropped 8.8% year-to-date, compared with a 11.1% rise in the S&P 500 .

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