Category: Stock Market News

U.S. stocks on Tuesday began the session trading higher ahead of key central-bank meetings that are likely to set the tone for Wall Street in the weeks ahead. The Federal Reserve and the Bank of Japan kick off separate two-day policy meetings that wrap up Wednesday. The Dow Jones Industrial Average opened about 83 points, or 0.5%, higher at 18,202, the S&P 500 index advanced 8 points, or 0.4%, at 2,147, while the Nasdaq Composite Index was up 21 points, or 0.4%, at 5,255. In corporate news, Ascena Retail Group Inc. fell more than 20% in early trade after the owner of Ann Taylor stores delivered weaker than expected fourth-quarter results late Monday. And, Wells Fargo & Co. chairman and CEO, John Stumpf, is set to appear at a hearing on the bank’s unauthorized opening of millions of accounts for existing and even nonexistent customers.

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Kellogg Co. said it is voluntarily recalling 10,000 cases of Eggo waffles on concerns they have been exposed to listeria. The cereal maker said the recall is of Eggo Nutri-Grain Whole Wheat Waffles that were sold in 25 states, including New York and New Jersey. There have been no reports of illness to date, the company said in a statement. “The recall is a result of routine tests that the company conducts which identified the potential for contamination,” said the statement. Listeria causes symptoms including high fever, severe headache, stiffness, nausea, abdominal pain and diarrhea. Kellogg shares were slightly higher in early trade, and are up 9% in the year so far, while the S&P 500 has gained about 5%.

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Shares of Wells Fargo & Co. shot up 2.3% in morning trade Tuesday, after Morgan Stanley turned bullish, saying that the recently volatility has provided a buying opportunity. Analyst Betsy Graseck raised her rating to overweight, after being at equal weight since Sept. 1, 2013. She said the stock could suffer through more volatility in the near term, particularly around Chief Executive John Stumpf’s testimony before Congress on Tuesday, but she doesn’t believe the bank’s troubles with regulators will put the dividend at risk. She believes the current dividend yield–about 3.30% based on Monday’s closing prices–limits the stock’s downside. “Yes, we could see more volatility ahead as headline risk persists, but Wells is rarely this inexpensive,” Graseck wrote in a note to clients. The stock has tumbled 13% year to date, while the SPDR Financial Select Sector ETF has tacked on 0.5% and the S&P 500 has gained 5.1%.

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Macy’s Inc. said Tuesday that it will hire about 15,000 seasonal holiday workers who will be based in the retailer’s direct-to-consumer fulfillment facilities supporting omnichannel sales, up from 3,000 last year. Macy’s plans to hire 83,000 total workers, essentially flat with last year. Fulfillment positions will be in locations including Goodyear, Ariz., Tulsa, Okla., and Secaucus, N.J. About 1,000 associates will be in customer service positions across telephone, email and online chat. And another 1,000 will be hired nationwide for the Macy’s Thanksgiving Day parade and other holiday events. Macy’s will host its first national hiring day on Sept. 30 across Macy’s, Macy’s Backstage and Bloomingdale’s stores. Most seasonal positions are part-time and require evening and weekend shifts. Some also require overnight hours. Workers will get a 20% merchandise discount. Macy’s shares are inactive in premarket trading, but down nearly 35% for the last year. The S&P 500 Index is up 9.3% for the past 12 months.

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Shares of Sinclair Broadcast Group Inc. fell nearly 6% in premarket trade on Tuesday after the company issued a revenue warning for the third quarter. Sinclair said media revenue for the quarter is expected to fall within the $637 million and $638 million range, which would be about a 28% increase compared with the same quarter a year ago, but the estimate is lower than the company’s previously forecast revenue of $649.2 million to $663.2 million. Sinclair Chief financial Officer Chris Ripley said in a statement that the unpredictable nature of political advertising is the main reason for the warning. Shares of Sinclair are down nearly 12% in the year to date, underperforming the S&P 500 Index , which is up 5% in the year.

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Marriott International Inc. said Tuesday it has received antitrust approval from China for its acquisition of Starwood Hotels & Resorts Worldwide Inc. . The approval clears the way for the deal to close, the company said in a statement. The companies are planning to close before the market opens on Sept. 23. Starwood shareholders will receive $21 in cash and 0.80 shares of Marriott. Starwood shares rose 3% in premarket trade, while Marriott shares were not yet active.

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Allergan Plc said Tuesday it has agreed to acquire Tobira Therapeutics Inc. in a deal valued at up to $1.7 billion. Allergan will pay $28.35 per Tobira share upfront, and up to $49.84 per share in contingent value rights, that are payable on the meeting of certain milestones. Tobira is focused on developing and commercializing treatments for non-alcoholic steatohepatitis (NASH) and other liver diseases. “The acquisition of Tobira is a strategic R&D investment within a white space area of our global gastroenterology franchise and an opportunity to advance the development of novel treatments for NASH,” Allergan Chief Executive Brent Saunders said in a statement. The deal is expected to close by year-end. Tobira shares were halted permarket for the news, while Allergan shares were not yet active. Allergan stock has shed 22% in the year so far, while the S&P 500 has gained 4.7%.

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Shares of Ascena Retail Group Inc. plunged 24% towared a 7 1/2-year low in premarket trade Tuesday, after the parent of Ann Taylor retail stores missed fiscal fourth-quarter profit and same-store sales expectations. RBC Capital Markets analyst Brian Tunick downgraded the stock to sector perform, after being at outperform for the last 15 months, citing uncertain outlooks at Ascena branded stores, other than Justice, and reduced management credibility after earnings misses. He slashed his stock price target to $7 from $12. “When we upgraded [Ascena] last June, it was on the premise that [Ascena] could return to positive revisions as Ann was folded in and progress was made towards its $1 billion EBITDA goal,” Tunick wrote in a note to clients. “Our call has been flat out wrong…as deleverage on negative [same-store sales] has more than offset gross margin gains and Ann-related savings.” The stock, which is on track to open at the lowest price seen since April 8, 2009, had already tumbled 18% year to date through Monday, while the SPDR S&P Retail ETF had tacked on 1% and the S&P 500 had gained 4.7%.

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DeVry Education Group Inc. said Tuesday it was voluntarily lowering the amount of revenue that its six Title IV institutions derive from federal student aid to 85% of total revenue from 90%. Title IV programs include federal aid programs such as Pell grants, federal work-study and Perkins loans, as well as Department of Veterans Affairs and military tuition assistance benefits. “This is a significant pledge that DeVry Group is voluntarily making for the long term and it underscores our commitment to finding solutions to the issues facing higher education today,” said Chief Executive Lisa Wardell. Earlier this month, ITT Educational Services became the second for-profit education company to declare bankruptcy since last year, after the U.S. Department of Education said in August it would no longer allow ITT to enroll students with federal aid because the company failed to address its accreditor’s concerns. DeVry’s stock, which was still inactive in premarket trade, has tumbled 12% year to date, while the S&P 500 has gained 4.7%.

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Tessera Technologies Inc. said Tuesday it has agreed to acquire DTS Inc. in an all-cash deal valued at about $850 million. The deal will create an audio and imaging company with more than 450 engineers to develop, next-generation imaging, audio and semiconductor package technology, the companies said in a statement. The deal is expected to immediately boost Tessera’s per-share earnings and free cash flow and to generate pro forma 2016 revenue of abut $450 million. Tessera will pay $42.50 per DTS share, equal to a 28% premium on DTS’ 30-day volume weighted average price as of Sept. 19. The deal is expected to close late in the fourth quarter or early in 2017. DTS shares were halted premarket, while Tessera shares were not yet active. Tessera shares have gained 12% in the year to date, while the S&P 500 has gained 4.7%.

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