Category: Stock Market News

Stocks opened little changed Thursday, struggling for direction in early trade ahead of congressional testimony by Federal Reserve Chairwoman Janet Yellen. Ahead of an appearance before the Joint Economic Committee, Yellen said an interest-rate hike could come “relatively soon,” doing little to dispel exepctations the central bank could deliver a rate increase as soon as next month. The S&P 500 fell less than 0.1% to 2,176.85 while Dow industrials fell 9 points to 18,858. The Nasdaq Composite declined 0.1% to 5,291.48.

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Shares of Wells Fargo & Co. fell 0.6% in premarket trade, after the banker reported October new account openings that fell sharply from a year ago in the wake of the sales-practices scandal. Consumer account openings fell 44% from a year ago, and 27% from September, while new credit card applications tumbled 50% year-over-year and 35% from last month. The bank said the declines were “primarily” due to a full-month impact of the sales practices settlement (Sept. 8) and reduced marketing activities. Customer-initiated account closures increased 3% from last year. Customer interactions with tellers declined 10% from a year ago, amid a 7% increase in digital dealings. Average consumer deposit balances were up 8% from a year ago, and the number of checking account customers grew 3.9%. “As expected, we continued to see declines in new account openings,” said Chief Executive Tim Sloan. “We remain focused on meeting our customers’ financial needs by providing great service and quality products and will provide our next update in mid-December.” The stock has lost 4.9% year to date through Wednesday, while the SPDR Financial Select Sector ETF has run up 13% and the S&P 500 has gained 6.5%.

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A Veterans Affairs whistleblower named Brian Smothers told the Associated Press he has quit his job at the VA in Colorado after, by his account, facing punitive action for having called attention to the alleged existence of secret waiting lists for mental-health care, according to an AP report. The secret lists, he claimed, created the impression that demand for such care was lower and wait times were briefer than they were in reality, according to the report.
According to the AP report, Smothers went to Sens. Ron Johnson of Wisconsin and Cory Gardner of Colorado, both Republicans, in September, saying he had uncovered the unauthorized lists on spreadsheets in the VA computer system. Smothers left his position on Tuesday, the AP reported. The VA had no immediate comment, according to the AP.

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WASHINGTON (MarketWatch) — The Philadelphia Fed said its manufacturing index eased in November to a reading of 7.6 from 9.7 in October. That was close to the MarketWatch economist consensus for a reading of 8. It marked the fourth month above the zero level indicating improving conditions, and measures of general activity, new orders, and shipments all remained positive.

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WASHINGTON (MarketWatch) — Ahead of an appearance before the Joint Economic Committee, Federal Reserve Chairwoman Janet Yellen on Thursday repeated the central bank’s contention that an interest-rate hike could come “relatively soon.” She said progress in the labor market has continued and that economic activity has picked up from the modest pace seen in the first half of this year. Inflation, while still below the central bank’s 2% objective, has increased somewhat, Yellen said. Yellen added the central bank continues to expect that the evolution of the economy “will warrant only gradual increases in the federal funds rate over time to achieve and maintain maximum employment and price stability.” Current policy was only “moderately accommodative” because the federal funds rate currently is only somewhat below estimates of the neutral rate, Yellen added.

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Oil prices pushed higher on Thursday, sparked by reports of upbeat comments over a production deal from Saudi Energy Minister Khalid al-Falih. The minister said he was optimistic that the Organization of the Petroleum Exporting Countries will make good on a preliminary production-cut deal reached in Algeria in September, in an interview with Saudi-owned Al-Arabiya TV, according to reports from Reuters and Bloomberg. OPEC will meet in Vienna on Nov. 30. WTI crude rose 63 cents, or 1.4%, to $46.23 a barrel and January Brent crude shot up 81 cents, or 1.8%, to $47.46 a barrel. Oil prices fell late Wednesday and into Thursday’s session in Asia after U.S. supply data showed a sharp inventory jump.

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Universal American Corp.’s stock jumped 4.8% in light premarket trade Thursday, after the health benefits company said it agreed to be acquired by WellCare Health Plans Inc. in a deal valued at $600 million, or about $800 million including debt. As part of the agreement, WellCare will pay $10 in cash for each Universal American share outstanding, which represents a 12.5% premium to Wednesday’s closing price of $8.89. The deal is expected to close in the second quarter of 2017. WellCare expects the acquisition to boost adjusted earnings per share by 60 cents to 70 cents in first year after closing. Synergies are expected to be $25 million to $30 million a year by 2019. “With approximately 114,000 Medicare Advantage members, and nearly 70 percent enrolled in a 4.0 or higher Star Rating plan, the transaction strengthens WellCare’s Medicare Advantage business in two key local markets – New York and Texas – and gives us a Medicare Advantage presence in Maine,” said WellCare Chief Executive Ken Burdick. WellCare’s stock has soared 64% year to date through Wednesday, while Universal American shares have run up 27% and the S&P 500 has gained 6.5%.

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Wal-Mart Stores Inc. shares fell 1.8% in Thursday premarket trading after the retail giant reported fiscal third-quarter sales that missed consensus. Net income was $3.03 billion, or 98 cents per share, down from $3.30 billion, or $1.03 per share last year. The FactSet estimate was 96 cents per share. Revenue was $118.18 billion for the quarter, up from $117.41 billion, but falling short of the $118.59 billion FactSet consensus. Same-store sales at Walmart U.S. rose 1.2%, driven by a 0.7% increase in traffic, the company said. Wal-Mart now sees full-year fiscal 2017 EPS of $4.34 to $4.49, compared with $4.29 to $4.49 previously, and full-year fiscal 2017 adjusted EPS of $4.20 to $4.35, compared with $4.15 to $4.35 previously. The company expects fourth-quarter same-store sales for Walmart U.S. to rise 1% to 1.5%. Wal-Mart shares are up 16.5% for the year so far while the S&P 500 index is up 6.5% for the same period. The Dow Jones Industrial Average is up 8.3% for the same period.

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Shares of Best Buy Co. Inc. soared 7.5% in premarket trade Thursday, after the consumer electronics retailer reported fiscal third-quarter profit and sales that beat expectations, and provided an upbeat earnings outlook. For the quarter ended Oct. 29, earnings rose to $194 million, or 61 cents a share, from $125 million, or 36 cents a share, in the same period a year ago. Excluding non-recurring items, adjusted earnings per share came to 62 cents, beating the FactSet consensus of 47 cents. Revenue increased to $8.95 billion from $8.82 billion, above the FactSet consensus of $8.85 billion, with both domestic and international revenue exceeding expectations. Domestic same-store sales grew 1.8%, beating the FactSet consensus of 1.0% growth. For the current quarter, the company expects adjusted EPS of $1.62 to $1.67, above the FactSet consensus of $1.58. Revenue is expected to be $13.4 billion to $13.6 billion, below the FactSet consensus of $13.7 billion, with product recalls expected to lower domestic revenue by $200 million. The stock had run up 33% year to date through Wednesday, while the SPDR S&P Retail ETF has gained 4.7% and the S&P 500 has climbed 6.5%.

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Staples Inc. [s:spls] on Thursday posted quarterly earnings that met expectations but revenue fell short of Wall Street’s target. The office- supplies retailer said third-quarter earnings were $179 million, or 27 cents a share, compared with $198 million, or 31 cents a share, a year ago. Adjusted earnings came in at 34 cents a share. Revenue was $5.36 billion, down from $5.59 billion. Analysts polled by FactSet had expected adjusted earnings of 34 cents, on sales of $5.40 billion. Staples forecast fourth-quarter sales to decline from the year-earlier period. Fourth-quarter adjusted earnings are projected to come in between 23 cents to 26 cents a share and analysts are looking for 26 cents share.

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