Category: Stock Market News

Wells Fargo Bank will pay $4.1 million to settle allegations that it illegally repossessed 413 vehicles owned by servicemembers without obtaining a court order, the Justice Department said Thursday. The settlement, which covers repossessions from Jan. 1, 2008 to July 1, 2015, requires the bank to pay $10,000 to each of the affected persons. Wells Fargo also agreed to change its policies as part of the agreement. The Justice Department launched its investigation into the bank’s practices following a complaint on behalf of Army National Guardsman Dennis Singleton, whose car was repossessed as he was preparing to deploy to Afghanistan. After the bank sold the vehicle at a public auction, it also attempted to collect $10,000 from Singleton. Wells Fargo’s latest legal trouble comes amid revelations of widespread illegal sales practices. Shares were down 0.3% after hours after falling 2.3% during the regular session.

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Extended Stay America Inc. shares slipped in the extended session Thursday after the hotel chain said it plans a secondary offering of “paired shares” with its real-estate investment trust arm ESH Hospitality Inc. Extended Stay shares fell 2.3% to $14.20 after hours. The company said the offering consists of 13 million paired shares — one of Extended Stay and one of ESH — from existing shareholders including Centerbridge Partners LP, Paulson & Co. and Blackstone Group LP. Extended Stay and ESH will not receive proceeds from the offering, rather, they plan to buy back just under 2 million of the shares in the offering.

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Shares of Alcoa Inc. rose 1.7% late Thursday after the company’s board of directors approved Alcoa’s planned split into two independent, publicly traded companies, Arconic, a maker of high-performance materials and engineering products, and Alcoa Corp., a miner and aluminum maker. Klaus Kleinfeld will serve as Arconic’s chief executive and Roy Harvey will be Alcoa’s chief executive. Arconic is to retain 19.9% of Alcoa Corp. common stock, and Alcoa Inc. is to be renamed Arconic Inc. . Alcoa Corp. will trade under the symbol AA. Shares of Alcoa Inc. had ended the regular trading day up 0.8%.

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Costco Wholesale Corp. shares rose 1.8% late Thursday after the giant retailer reported earnings above expectations but flat same-store sales. Costco said it earned $779 million, or $1.77 a share, in its 16-week fourth quarter, compared with $767 million, or $1.73 a share, in the year-ago period. Net sales rose 2% to $35.7 billion in the quarter, the company said. Analysts polled by FactSet had expected the company to report earnings of $1.73 a share on revenue of $35.7 billion. Costco said its U.S. same-store sales fell 1% in the quarter, while total same-store sales were flat. Excluding gasoline sales and foreign-exchange adjustments, however, comparable-store sales were up 3% in the quarter. The company plans to open nine new warehouses before the end of the year, it said in a statement. Shares had ended the regular session down 1.3%.

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National Retail Properties Inc. said late Thursday Chief Executive Craig Macnab, who is also chairman of the board, will retire on April 28 from both roles. Chief Operating Officer Julian Whitehurst will succeed him as CEO while independent director Robert Legler has been appointed as board chairman. Shares of National Retail Properties edged down 0.2% after hours.

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The U.S. stock market skidded on Thursday as investors fretted over Deutsche Bank’s deteriorating balance sheet and the possibility of European bank woes spilling over to the global financial markets. The S&P 500 fell 20 points, or 0.9%, to close at 2,151 while the Dow Jones Industrial Average shed 195 points, or 1.1%, to finish at 18,143. The Nasdaq Composite Index dropped 49 points, or 0.9%, to close at 5,269. Deutsche Bank’s U.S.-listed shares tanked 6.7% as analysts warned that portfolio managers are obligated to offload the stock due to their fiduciary duties.

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Investors should stay away from shares of Deutsche Bank and remain defensive in financial markets, Doubleline Capital founder Jeffrey Gundlach said Thursday, according to Reuters. Gundlach told the news service that it doesn’t feel like the selloff is over and that the market will push down Deutsche Bank shares “until there is some recognition of support.” Deutsche Bank’s U.S.-listed shares tumbled Thursday after Bloomberg reported that around 10 of the lender’s derivatives-clearing clients had removed excess cash and positions. Deutsche Bank shares are down more than 50% since the end of last year as the firm struggles to shore up its thin capital cushion.

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Tropical Storm Matthew has strengthened to a hurricane, prompting warnings for the Caribbean islands of Bonaire, Curacao and Aruba, the National Hurricane Center said Thursday. The storm has maximum sustained winds of 75 miles per hour and is expected to move westward and gradually strengthen in the next 48 hours, the NHC said in its latest advisory. The agency is advising Venezuela and Colombia to monitor the progress of the storm along their coastlines. Matthew is the fifth hurricane of this 2016 Atlantic season.

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The Dow Jones Transportation Average have bounced back into positive territory, which could be an encouraging sign for investors in the face of sharp declines in the broader stock market. The Dow transports were up 0.1%, with 14 of 20 components trading higher, after being down as much as 0.5% earlier in the session. Meanwhile, the Dow Jones Industrial Average has down 153 points, with 26 of 30 components losing ground, while the S&P 500 shed 0.6% and the Nasdaq Composite fell 0.6%. The number of advancing stocks outnumbered decliners by a 2,187 to 779 score on the NYSE and by an 1,872 to 785 margin on the Nasdaq. The century-old Dow Theory of market analysis suggests that the Dow transports and Dow industrials should trend in similar directions, because “the industrials make and the transports take,” according to S&P Dow Jones Indices. Basically, the transports are still taking, the industrials have reason to keep making.

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Oil futures climbed for a second session in a row on Thursday, finding continued support in the wake of the Organization of the Petroleum Exporting Countries’ preliminary agreement to scale back production. November West Texas Intermediate crude rose 78 cents, or 1.7%, to settle at $47.83 a barrel on the New York Mercantile Exchange. Prices, which rallied by 5.3% on Wednesday following news of the OPEC deal, marked their highest settlement in more than a month.

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