Category: Stock Market News

Broadcom Ltd. is close to finalizing a deal to buy Brocade Communications Systems Inc. , according to a report, but would look to sell its core networking business. Reuters reported Tuesday that Broadcom, a chip company that merged with Avago Technologies Ltd. last year in a $37 billion deal, could complete the deal by the end of the week. The report, based on anonymous sources, said that Broadcom would look to keep Brocade’s storage and fiber channel businesses while divesting the networking business for which Brocade has been known since the dot-com boom. Included in that divestment would be Ruckus Wireless, the Wi-Fi company that Brocade bought for $1.2 billion earlier this year. The Reuters report follows a Bloomberg News report released Monday that said Brocade was near a deal and named Broadcom as a bidder. Brocade jumped more than 20% after the Bloomberg report and got another boost Tuesday, jumping more than 7% on a tough day for the markets, with the S&P 500 down about 0.8%.

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Eli Lilly & Co. shares fell as much as 3% after Sen. Bernie Sanders tweeted about the company’s Lantus insulin drug. Sanders said “it makes no sense that the same drug that costs $70 in France costs $450 in the US. We should reduce barriers to importation of drugs.” The stock recovered afterwards, and was down 1.6% in afternoon trade, about the same as before the Sanders missive.

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Apple Inc.’s stock slumped 0.7% toward a one-month low in morning trade Tuesday, erasing an earlier brief gain of as much as 0.2%, to put it in danger of a fifth straight loss following disappointing fourth-fiscal-quarter results. The stock has now lost 4.6% since Apple reported results after the Oct. 25 close, when the stock ended at a 10 1/2-month high. UBS analyst Steven Milunovich wrote in a research note out Tuesday that results of a semiannual global smartphone survey showed that demand was strong in the U.S. for Apple’s iPhone 7 model, but China was showing signs of weakness. He said “slower upgrading and lower China interest” limit the upside in iPhone 7 sales. He reiterated his buy rating on the stock and $127 price target. The stock has climbed 7.1% year to date, while the SPDR Technology Select Sector ETF has run up 11% and the Dow Jones Industrial Average has gained 4%.

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Shares of Yum China Holdings Inc. are enjoying some success on their debut, as they are climbing 3.1% in active trade Tuesday morning. Over 6.6 million shares changed hands in the first 90 minutes of the regular session. The stock’s first trade after the opening bell was at $24.60 at 9:30 a.m., up 1.5%, before extending gains. Meanwhile, Yum Brands Inc.’s stock was up 0.2% at $62.18. The fast-food restaurant chain operator, which brands include KFC, Pizza Hut and Taco Bell, said Tuesday that it had completed the separation of Yum China, and will begin trading as two separate entities. Yum China is a licensee of Yum Brands, and has exclusive rights in mainland China to KFC, Pizza Hut and Taco Bell. It also owns the Little Sheep and East Dawning restaurant brands.

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Online shoppers are expected to spend an average of $710 this holiday season versus $440 for those shopping in stores, about 60% more, according to The NPD Group’s 2016 Holiday Purchase Intentions Survey. The survey found that 71% of consumers plan to do some of their holiday shopping online. And 14% of U.S. shoppers said they’ll use their mobile phones to buy gifts, up 130% from last year. NPD also forecasts that the U.S. toy industry will grow about 6.5%, with games and puzzles, up 16%, the fastest growing category for 2016 so far. Games and puzzles include brainteasers and board games. Toy sales grew 6% between January and September. “The categories that I expect will provide the most growth in November and December will be connected toys, including drones, cars and robotics; and wheels, such as battery-operated ride-ons, scooters and hoverboards,” said Juli Lennett, U.S. toys industry analyst at NPD Group.

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Shares of Amazon.com Inc. bounced for a second-straight session following disappointing third-quarter results, but still remain in a technically precarious position. The stock rose as much as 1.4% to an intraday high of $800.84 within minutes of the open, to peek briefly above its 50-day moving average at $800.68, before backing off sharply to be up just 0.1% at $790.80 in recent trade. The stock was also still well below a broken uptrend line, which extends to about $823. Last Thursday, the stock had dropped 5.1% to break below the uptrend line and the 50-day moving average, to warn that a new downtrend may have started. The stock has now gained 17% year to date, while the S&P 500 has tacked on 3.9%.

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U.S. stocks opened higher on Monday, with the S&P 500 index and Nasdaq Composite Index on track to snap five-day losing streaks, after robust data out of China lifted global-growth expectations. The S&P 500 rose 4 points, or 0.2%, to 2,129. The Nasdaq gained 11 points, or 0.2%, to 5,200. The Dow Jones Industrial Average climbed 31 points, or 0.2%, to 18,176.

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Yum Brands Inc. said Tuesday that it has completed the separation of Yum China Holdings Inc. and the new Yum China will begin trading on the New York Stock Exchange under the “YUMC” ticker. Yum and Yum China executives will ring the opening bell. Yum China has exclusive rights in mainland China to KFC, Pizza Hut and Taco Bell, which will open in China in 2016. Yum China has more than 7,300 restaurants and 400,000 employees in more than 1,100 cities. It generated more than $8 billion in sales in 2015. Each Yum Brands stockholder has received a share of Yum China common stock for each share held as of the close of business Oct. 19. About 364 million shares were distributed. Yum Brands shares are up 0.2% in premarket trading and up 18.1% for the year so far. The S&P 500 Index is up 4% for 2016 to date.

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Crown Castle International Corp. announced Tuesday a deal to buy fiber services provider FPL FiberNet Holdings LLC, and certain other NextEra Energy Inc. , for $1.5 billion in cash. Crown Castle said the deal should add to earnings immediately after closing, which is expected in the first half of 2017. The deal is expected to contribute $105 million to $110 million to gross margin and $15 million to $20 million to general expenses. Crown Castle’s stock, which is still inactive in premarket trade, has climbed 5.3% year to date while the S&P 500 has gained 4%. NextEra’s stock has run up 23% so far this year.

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Canadian bond yields and the country’s currency rose on Tuesday after data showed the Canadian economy grew 0.2% in August, in line with economists’ expectations. The U.S. dollar was down 0.3% at C$1.3385 in recent trade, while the yield on the Canadian 10-year government bond rose three basis points to 1.2263%.

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