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European Central Bank stands pat on rates; focus turns to Draghi

The European Central Bank, as expected, left interest rates unchanged Thursday. The focus now turns to ECB President Mario Draghi’s news conference. The ECB chief is likely to play down any suggestion of a potential tapering of the bank’s 80 billion-euro-a-month bond buying program but is also likely to hold off on announcing any extension of the purchases beyond its scheduled March 2017 end date. In a statement, the ECB said the Governing Council “confirms that the monthly asset purchases of 80 billion euros are intended to run until the end of March 2017, or beyond, if necessary, and in any case until it sees a sustained adjustment in the path of inflation consistent with its inflation aim.”

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American Airlines shares rise after earnings beat estimates

American Airlines Group Inc. shares rose 2.5% in Thursday premarket trading after the company announced third-quarter earnings that beat estimates. The airline had net income of $737 million, or $1.49 cents per share, down from $1.69 billion, or $2.49 per share, for the same period last year. Adjusted per share earnings were $2.80, beating the FactSet consensus of $1.69. Revenue was $10.59 billion, down from $10.71 billion and beating the FactSet consensus of $10.55 billion. During the quarter, American launched nonstop service between Los Angeles International Airport and Hong Kong, and began the company’s first regularly-scheduled flights to Cuba, with nonstop service from Miami to Cienfuegos and Holguin. Service to Havana begins in November. American shares are down 4.1% for the year so far, while the S&P 500 Index is up nearly 5% for the same period.

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Walgreens stock slips after revenue miss

Walgreens Boots Alliance Inc. shares slipped 0.2% in Thursday premarket trading after the pharmacy chain missed fourth-quarter sales estimates. The company reported net income of $1.03 billion, or 95 cents per share, up from $26 million, or 2 cents per share, for the same period last year. Adjusted per share earnings were $1.07, exceeding the 99 cents FactSet consensus. Sales for the quarter were $28.64 billion, up from $28.52 billion last year, but below the $29.11 billion forecast by FactSet. Walgreens sees fiscal 2017 adjusted earnings of $4.85 to $5.20. The FactSet consensus is $5.03. The acquisition of Rite Aid Corp. is “progressing as planned,” Walgreens said, with the expected requirement that the companies divest between 500 and 1,000 stores. Walgreens shares are down 9.4% for the year so far while the S&P 500 Index is up 4.9% for the same period.

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Travelers’ profit falls, but beats expectations

Travelers Cos. Inc. reported Thursday third-quarter earnings that fell to $716 million, or $2.45 a share, from $928 million, or $2.97 a share, in the same period a year ago, primarily a result of lower net favorable reserve development and higher weather-related losses. Excluding non-recurring items, operating earnings per share came to $2.40, beating the FactSet consensus of $2.38. Total revenue rose 2% to $6.96 billion, above the FactSet consensus of $6.87 billion, as net written premiums grew 3% to $6.39 billion to top expectations of $6.37 billion. The combined ratio increased six percentage points to 92.9%, above the FactSet consensus of 92.3%, due to a higher underlying combined ratio and lower net favorable prior year reserve development. “We are encouraged that the markets in which we operate continue to remain stable,” said Chief Executive Alan Schnitzer. “While returns from our high-quality fixed income portfolio declined in line with our expectations due to the continued low interest rate environment, returns from our non-fixed income portfolio improved from recent quarters and were comparable to the prior year quarter.” The insurer’s stock, which was still inactive in premarket trade, has gained 3% year to date, while the Dow Jones Industrial Average has tacked on 4.5%.

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Dunkin’ Brands beats on profit and backs full-year guidance

Dunkin Brands Group Inc. on Thursday reported third-quarter earnings ahead of forecasts and backed its full-year guidance. Profit for the period rose to $52.7 million, or 57 cents a share, compared with $46.2 million, or 48 cents a share, in the year-ago quarter. On an adjusted basis, the donut company said earnings rose 15% to 60 cents a share. Revenue, however, slipped 1.3% to $207.1 million. Analysts surveyed by FactSet expected adjusted earnings of 58 cents a share on revenue of $214.7 million. For fiscal 2016, Dunkin said it continues to see adjusted per-share earnings between $2.20 and and $2.22.

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Wells Fargo subject to criminal probe in California.: reports

Wells Fargo & Co. shares declined in the extended session Wednesday following reports that California has launched a criminal investigation into the bank’s business practices. Wells Fargo shares slipped 0.8% to $44.90 after hours. Initially reported by The Los Angeles Times, California Attorney General Kamala Harris sent a search warrant to the bank earlier in October on allegations of criminal identity theft concerning the creation of millions of unauthorized accounts, according to a search warrant obtained by the Times. The Associated Press reported that Harris seeks the names of customers who had improper accounts opened, the names of employees who opened up the accounts, and the fees associated with those accounts. The action follows the resignation of Wells Fargo CEO John Stumpf and suspensions of state business in Ohio and Illinois.

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Manitowoc shares tank as company releases downbeat outlook

Shares of Manitowoc Co. skidded in Wednesday’s extended session after the equipment manufacturer warned that its quarterly loss likely deepened in the third quarter. The company said it expects its third-quarter operating loss widened to $134 million from a loss of $8 million a year earlier. On an adjusted basis, its operating loss totaled $31 million compared with a loss of $8 million in the same quarter last year. Net sales are estimated to have decreased to $350 million versus $538 million in the year-ago period. “Although the current business environment remains difficult, we are confident in our long-term strategy, targeting double-digit operating margins by 2020,” said Chief Executive Barry Pennypacker in a press release. Manitowoc slumped more than 8% after hours.

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Select Comfort shares drop after earnings miss, outlook

Select Comfort Corp. shares plunged in the extended session Wednesday after the maker of Sleep Number beds missed on quarterly earnings and forecast a profit range that mostly fell below Wall Street estimates. Select Comfort shares dropped 18% to $17.68 after hours. The company reported third-quarter earnings of 56 cents a share on revenue of $368 million. Analysts surveyed by FactSet had estimated 57 cents a share on revenue of $391 million. For the year, Select Comfort sees earnings of $1.15 to $1.25 a share, while analysts expect $1.23 a share. “Our outlook does not contemplate a further deterioration of the consumer spending environment,” the company said in a statement.

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Dow streak of closing below its 50-day MA without falling to its 200-day MA is the longest in 27 years

For the 29th-straight session, the Dow Jones Industrial Average has closed below its 50-day moving average, but has yet to fall enough to even touch its 200-day moving average on an intraday basis. That marks the longest stretch the Dow has wavered below its 50-day MA but above its 200-day MA since the 29-day stretch ending in November 1989. During the current streak, the Dow has closed below its 50-day MA, which currently extends to about 18,330, since Sept. 9, 2016. During that time, the closest the intraday low came to the 200-day MA was Oct. 13, when the low of 17,959.95 was more than 300 points above the 200-day MA at 17,640 at the time. Since the 50-day MA has been falling by about 7 points a day, and the 200-day MA has been rising by about 5 points, the Dow will need to close Thursday up over 120 points, or fall at least 541 points intraday, to break the streak.

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Apple sends out media events of Oct. 27 Mac event

Apple Inc. sent out media invites for an Oct. 27 event on Wednesday. The event, dubbed ‘hello again,’ will kick off at 10 a.m. PT. It will be live streamed on Safari and Apple TV. The company plans to launch a new line of Macs at the event, including a new MacBook Pro, according to several media reports. This comes about a month-and-a-half after Apple’s last major hardware event, in which it unveiled the iPhone 7 and iPhone 7 Plus but provided no update to its Mac line. Apple reported Mac revenue of $5.2 billion in its last fiscal quarter, down slightly from $6 billion in the year-earlier period. Other data from IDC and Gartner shows Alphabet Inc.’s Chromebook surpassed Apple Mac sales for back-to-school shopping.

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