Category: Stock Market News

NetApp shares rose late Wednesday after the Sunnyvale, Calif., data management and storage company swung to a profit in the fiscal first quarter. NetApp said it earned $64 million, or 23 cents a share, in the quarter, versus a net loss of $30 million, or 10 cents loss a share, in the year-ago period. Adjusted for one-time items, the company earned $129 million, or 46 cents a share, in the quarter, compared with $89 million, or 29 cents a share, a year ago. Revenue reached $1.29 billion in the quarter, down from $1.34 billion a year ago. Analysts polled by FactSet had expected adjusted earnings of 36 cents a share on sales of $1.26 billion. NetApp said it expects fiscal second-quarter revenue between $1.27 billion to $1.42 billion, and per-share earnings between 51 cents to 56 cents. NetApp shares had ended the regular Wednesday session down 0.4%.

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Cisco Systems Inc. finished off its fiscal year with an earnings beat, the networking giant announced Wednesday, but it also announced a restructuring that will include the elimination of 5,500 jobs. Cisco reported quarterly earnings of $2.8 billion, or 56 cents a share, on sales of $12.64 billion; after adjusting for share-based compensation and other costs, the company claimed profit of 63 cents a share. Analysts on average predicted adjusted earnings of 60 cents a share on sales of $12.57 billion, according to FactSet. Cisco also announced a restructuring that will eliminate about 7% of the company’s global workforce, with cuts focused on “lower growth areas of our portfolio,” a return to a pattern of layoffs at the end of the fiscal year that Cisco skipped in 2015. Cisco has seen growth in its leading networking-equipment business stall in recent quarters, and has looked to cloud software and other efforts to make up for it. Cisco stock fell about 1% in immediate late trading after closing with a 1.3% decline at $30.72.

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Barnes & Noble Inc.’s stock plunged 12% in active afternoon trade, after the bookseller’s surprise ousting of its chief executive officer prompted a downgrade at Gabelli & Co. Volume of 2 million shares was more than triple the full-day average. The company said late Tuesday that it determined Ronald Boire, who became CEO effective Sept. 8, 2015, was “not a good fit.” Gabelli analyst John Tinker cut his rating to hold from buy. “The firing is a major surprise, as Mr. Boire hosted Barnes & Noble investor meeting on June 23 at which a new store strategy was officially announced with enhanced restaurants including table service and alcohol,” Tinker wrote in a note to clients. He noted that the next CEO named by the company would be the fifth in four years. Despite Wednesday’s selloff, the stock is still up 44% over the past three months, while the S&P 500 has gained 6.4%.

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U.S. stocks were trading mostly in the green Wednesday, after paring losses following the Federal Open Market Committee’s July meeting minutes, which suggested that the U.S. policy-setting committee members were inclined to hike rates sooner than later. However, investors appeared to dismiss the view that the central bank would hike rates as early as its next meeting in September. After paring losses immediately after the minutes were released at 2 p.m. Eastern Time, the S&P 500 index was trading flat at 2,180, the Dow Jones Industrial Average gained 20 points, or 0.1%, to 18,570, while the Nasdaq Composite Index was at break-even at 5,228.

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WASHINGTON (MarketWatch) — In addition to a discussion over the near term direction of interest rates, Federal Reserve officials debated what they called the monetary policy implementation framework for the longer term, according to minutes released Wednesday. These issues, like the selection of counterparties or types of collateral to accept, and the overall size and composition of the Federal Reserve’s balance sheet, may both be influenced by, and themselves influence, incentives and activity in financial markets, the Fed said. The Fed also had a desire to reduce the perceived stigma associated with borrowing at the discount window, particularly in periods of financial strain. No decisions were made at the meeting, and Federal Reserve Chairwoman Janet Yellen asked the staff to continue its work and noted that policymakers would review further analysis at a future meeting.

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Gold futures settled lower Wednesday, pulling back from the two-week high they settled at a day earlier. Prices initially extended their decline in electronic trading after the settlement, then rose as minutes from the Federal Reserve Open Market Committee’s July meeting showed that the central bank officials were split over the need for further interest-rate hikes in the near future. Gold for December delivery settled at $1,348.80 an ounce Wednesday, down $8.10, or 0.6%, from Tuesday. It was at $1,354.90 in electronic trading shortly after the release of the Fed minutes.

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WASHINGTON (MarketWatch)– Federal Reserve officials at their July meeting were relieved their worst fears about the economy did not materialize but disagreed this meant they should resume lifting interest rates in the near future, according to minutes released Wednesday. Worries about the impact of the vote by the U.K. to leave the European Union proved unfounded, and the June employment report relieved concerns about the weaker numbers in May. Many officials said it was appropriate to wait for additional information before deciding another rate hike was warranted, while two pushed for an immediate increase.

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AT&T Inc. said Wednesday that it will launch new data plans that end data overage charges for wireless customers on August 21. Customers that use all of their high-speed data will have their data usage reduced to a maximum of 128 kbps for the rest of their billing cycle. The new Mobile Share Advantage Plans will include features of the previous Mobile Share Value Plans, including unlimited domestic talk and text, but include more data at a lower cost per megabyte than some other AT&T plans. New plans start at 1 GB for $30 per month and go up to 30 GB at $135 per month. AT&T now also offers a new 25GB plan for $190 per month for four smartphone lines, down from $235 per month. And the 30GB plan is now $215 per month for four lines, down from $285 per month. AT&T shares are down 0.6% in Wednesday trading, but up 21.8% for the past year. The S&P 500 Index is up 3.4% for the same period.

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WASHINGTON (MarketWatch) — The U.S. economy looks like it has slowed to a steady state where growth is below a 2% trend rate, the unemployment rate doesn’t fall much and inflation is tame, St. Louis Fed President James Bullard said on Wednesday. This “new narrative” suggests rate can stay low, Bullard said in a speech at Washington University in St. Louis. He said this “new narrative” calls for short-term interest rates to rise only to 0.63%. The Fed presently targets rates in a range between 0.25% and 0.5%.

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Mobileye N.V.’s stock slumped 1.3% toward a six-week low in afternoon trade Wednesday, after shedding 2.7% the previous session. Analyst Alexander Potter at Piper Jaffray said some of that decline could be blamed on Ford Motor Co. , which announced Tuesday its plans to deliver fully autonomous vehicles for ride sharing in 2021. “[Mobileye] was a notable absence from the company’s press release…,” Potter wrote in a note to clients. He reiterated his overweight rating on the stock, saying the news only seems like a negative at first glance. “We would be buying any pullback, as we believe the window remains open for Ford to base its eventual self-driving platform at least partially–if not fully–on [Mobileye’s] approach,” Potter wrote. “Despite Ford’s interest in circumventing [Mobileye], Ford remains a [Mobileye] partner for lower-level automation; there’s nothing precluding a deeper relationship.” The stock is now trading below where it closed on July 26, after Mobileye said it would no longer work with Tesla Motors Inc. . The stock has soared 24% over the past three months, while the S&P 500 has gained 6.3%.

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