Category: Stock Market News

Merck & Co. said Friday it is scrapping the development of osteoporosis treatment odanacatib and will no longer seek regulatory approval for its use. “We are disappointed that the overall benefit-risk profile for odanacatib does not support filing or further development,” said Roger M. Perlmutter, M.D., Ph.D., president, Merck Research Laboratories. An independent review of the drug confirmed an increased risk of stroke, the company said in a statement. Merck shares were not yet active in premarket trade, but are up 19% in the year so far, while the S&P 500 has gained 6%.

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Yum Brands Inc. said Friday it has entered an agreement with China-based private-equity firm Primavera Capital Group and online financial services provider Ant Financial Services Group, in which the two will invest $460 million in Yum China, which Yum is spinning off. The spinoff and investment are expected to be completed on Oct. 31. Yum China will begin trading on the New York Stock Exchange on Nov. 1 under the ticker symbol ‘YUMC,’ Yum Brands said in a statement. Primavera and Ant Financial will be granted two tranches of warrants with each tranches giving them the option to buy up to 2% of Yum China’s equity. The warrants can be exercised in the five-year period following their issuance, with strike prices equal to equity value of $12 billion and $15 billion. “Through this collaboration, we aim to help Yum China provide world-class mobile payment services for tens of millions of customers across its brands,” said Eric Jing, President of Ant Financial Services Group. “These services include hassle-free Alipay for customers to help shorten queues at the cashier as well as membership solutions for Yum China designed to help manage their customer relations and promotions.” Yum shares were not yet active in premarket trade, but are up 24% in the year so far, while the S&P 500 has gained 6%.

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Google is abandoning its efforts to build a modular smartphone, according to a report by Reuters on Thursday night. Alphabet Inc.’s Google had touted its ambitious Project Ara as recently as May at a developers conference, and had hoped to ship an early version this fall. While the concept of a customizable smartphone with a variety of plug-in features was appealing, the effort was apparently too expensive and complicated. “This was a science experiment that failed, and they are moving on,” TECHnalysis Research analyst Bob O’Donnell told Reuters.

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Samsung Electronic Co. Ltd. will recall its new Samsung Galaxy Note 7 smartphones, according to a report late Thursday. The Korean news agency Yonhap reported that the tech giant would recall the devices within a week after reports that some phones had exploded while being charged. The heralded smartphone debuted last month, but Samsung said on Wednesday that it would halt deliveries “as devices are undergoing additional quality inspection tests.” The Korean electronics company is the chief rival to Apple Inc. in the smartphone market: According to IDC, Samsung owned smartphone market share of 22.4% in the second quarter, while Apple had 11.8%. Samsung’s recall, which Yonhap said is expected to be officially announced this weekend or early next week, is not expected to affect the rest of the Galaxy line of smartphones.

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Dean Foods Co. late Thursday said Ralph Scozzafava, the company’s executive vice president and chief operating officer, will replace Chief Executive Gregg A. Tanner effective Jan. 1. Tanner will remain advisor to the company through the stockholders meeting in May, Dean Foods said. Scozzafava joined the food and beverage company in October 2014 as chief commercial officer. Shares of Dean Foods were flat in late trading Thursday after ending the regular session down 0.9%.

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Sales at Gap Inc. fell 2% to $1.17 billion in August, with sales at its Banana Republic brand falling the most, off 10% for the month, the company said in a statement late Thursday. Sales at Old Navy rose 1%, while sales at the eponymous Gap stores fell 5%. “While we are pleased with the continued progress at Old Navy, we remain focused on improving results across our global brands,” Gap said. In the same statement, the San Francisco-based company said it was “still assessing” the impact of a fire that broke out earlier this week in one building at a Gap distribution center in Fishkill, New York. Gap shares fell 1.2% after hours and ended the regular Thursday session down 1.3%.

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Hewlett Packard Enterprise Co. shares Thursday reached their highest prices since Hewlett-Packard split up after a report that the company is looking to sell its software business in a multibillion-dollar deal. Reuters reported that HPE was negotiating with private-equity firm Thoma Bravo LLC and seeking a price of $8 billion to $10 billion, after Thoma Bravo beat out other private-equity suitors. The enterprise-focused spinoff of the former Hewlett-Packard built its software unit through acquisitions, including the ill-fated purchase of Autonomy for more than $10 billion, a deal that has led to HPE accusing Autonomy of fraud. Chief Executive Meg Whitman is looking to sell the unit to focus on hardware like networking, servers and storage, Reuters reported. HPE shares, which were down on the day before the report hit, closed with a 3.2% gain at a record closing high of $22.16.

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Smith & Wesson Holding Corp. shares fluctuated between losses and gains in the extended session Thursday after the gun maker topped Wall Street estimates for its quarterly results and outlook. Smith & Wesson shares were choppy after hours and were last down 0.8% at $29.32 following an initial rise. The company reported adjusted fiscal first-quarter earnings of 62 cents a share on revenue of $207 million. Analysts surveyed by FactSet had forecast earnings of 54 cents a share on revenue of $198.2 million. Smith & Wesson expects adjusted earnings of 53 cents to 57 cents a share on revenue of $220 million to $230 million for the fiscal second quarter, and $2.38 to $2.48 on revenue of $900 million to $920 million for the year. Analysts estimate 36 cents a share on revenue of $165.4 million for the quarter, and $1.94 a share on revenue of $776.7 million for the year. The muted response after hours may have stemmed from the stock’s 5.1% gain during the regular session and 35% rise year-to-date.

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Nvidia Corp. , which has experienced strong gains since announcing efforts in autonomous driving and deep learning, received another bump Thursday after announcing a partnership with Baidu Inc. to build a driverless car. The chipmaker has been working with the Chinese tech firm on artificial intelligence efforts since 2012, according to The Wall Street Journal, and will now develop a full autonomous-driving platform in concert with Baidu, which has permission to test its driverless cars in California. Nvidia gained 3% in Wednesday trading to set a record closing high of $63.15; Baidu added 3.2% in U.S. trading.

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Shares of Lululemon Athletica Inc. skidded in Thursday’s extended session after the yoga apparel company posted earnings that fell short of Wall Street’s target and issued a tepid outlook. Lululemon reported its second-quarter earnings rose to $53.6 million, 39 cents a share, from $47.7 million, or 34 cents a share, a year earlier. Excluding certain items, Lululemon would have earned 38 cents a share. Revenue grew 14% to $514.5 million and total comparable sales, which include both store and direct to consumer sales, increased 4%. Analysts surveyed by FactSet had forecast the yoga-wear maker to earn 38 cents a share on revenue of $516 million. In the third quarter, the company expects earnings per share of 42 cents to 44 cents and projected revenue of $535 million to $545 million which are on the lower end of the Street’s projected ranges. Lululemon shares shed more than 7% after hours.

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