Category: Stock Market News

U.S. stocks opened mostly lower on Friday, after a government report showed the U.S. economy grew at a slower pace than expected during the second quarter. Also, the Bank of Japan delivered a smaller-than-expected round of additional stimulus, disappointing investors. Among individual stocks, investors cheered stronger-than-expected earnings by Google-parent Alphabet Inc. and Amazon.com Inc. . But poor results in the energy sector, most notably from energy giants Exxon Mobil Corp. and Chevron Corp. weighed on sentiment. The Dow Jones Industrial Average lost 42 points, or 0.2%, to 18,414, the S&P 500 index shed a point, or less than 0.1% at 2,169, while the Nasdaq Composite Index added 9 points, or 0.2%, to 5,164.

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WASHINGTON (MarketWatch) — The U.S. economy grew at a tepid 1.2% annual rate in the second quarter, held down by a large decline in business investment, the Commerce Department said Friday. The second quarter gain was well below the 2.6% rate economists surveyed by MarketWatch had forecast. Adding to the sense of weakness, first quarter growth was also revised down to a 0.8% annual rate from the prior estimate of a 1.1% gain. Lackluster growth could derail the Federal Reserve’s intentions to raise interest rates at a gradual pace. The weaker than expected growth could also make the economy a bigger issue in the presidential election campaign.

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Chevron Corp. shares slid 1.5% in premarket trade after the company swung to a loss for the second quarter as it booked impairment and other charges. Chevron said it had a net loss of $1.5 billion, or 78 cents a share in the quarter, after earnings of $571 million, or 30 cents a share, in the year-earlier period. The number includes $2.8 billion of impairment and other non-cash charges, partially offset by gains on asset sales of $420 million. Revenue tumbled to $29.3 billion from $40.4 billion. The FactSet consensus was for EPS of 32 cents and revenue of $28.3 billion. “The second quarter results reflected lower oil prices and our ongoing adjustment to a lower oil price world,” Chief Executive John Watson said in a statement. Shares have gained 13% in the year to date, while the S&P 500 has gained 6%.

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Seres Therapeutics Inc. shares cratered 78% in pre-market trade Friday after the company said interim phase 2 trial results for its colon infection treatment weren’t statistically significant. The company’s chief executive officer, Roger Pomerantz, called the results “unexpected” in light of a previous phase 1b trial and other supporting data. The treatment, SER-109, is intended for multiply recurrent Clostridium difficile infection, which is commonly spread in hospitals and other health care institutions. Shares of Seres rose 21.2% over the last three months, compared with a 5.1% rise in the S&P 500 .

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Skullcandy Inc. said Friday that it determined that Mill Road Capital Management’s $6.05 a share buyout bid for the headphone maker was superior to the one from Incipio LLC. Skullcandy has told Incipio that it intends to terminate the merger agreement; Incipio has until 11:59 p.m. ET on Aug. 2 to respond with another proposal. Skullcandy received Mill Road’s cash bid on Monday, which was above Incipio’s per-share bid of $5.75, just before the end of the agreed on go-shop period. Skullcandy’s stock, which was still inactive in premarket trade, has soared 27% year to date, while the S&P 500 has gained 6.2%. At Thursday’s closing price of $6.03, Skullcandy’s market capitalization was $173.1 million, according to FactSet.

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Exxon Mobil Corp. shares fell 2.6% in premarket trade Friday, after the company’s second-quarter profit and revenue fell short of analyst estimates. Exxon said it had net income of $1.7 billion, or 41 cents a share, in the quarter, down from $4.19 billion, or $1.00 a share, in the year-earlier period. Revenue fell to $57.7 billion from $74.1 billion. The FactSet consensus was for EPS of 64 cents and revenue of $58.0 billion. Chief Executive Rex Tillerson said the numbers “reflect a volatile industry environment.” Shares have gained 16% in the year so far, while the Dow Jones Industrial Average has gained just 6%.

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NextEra Energy Resources LLC said Friday it has reached an agreement to sell Pennsylvania gas generating assets to Starwood Energy Group Global LLC for $760 million. NextEra said it expects to book proceeds of about $255 million after repayment of the existing project related financing. The deal is expected to close in the fourth quarter. “This transaction is part of our ongoing strategy to further optimize our power generation assets, while recycling capital into our growing long-term contracted asset portfolio,” said Chief Executive Armando Pimentel. Shares were not yet active in premarket trade, but are up 23% in the year to date, while the S&P 500 has gained 6%.

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Xerox Corp. said Friday it had net income of $155 million, or 15 cents a share, in the second quarter, up from $12 million, or 1 cent a share, in the year-earlier period. Excluding one-time charges, EPS came to 30 cents, ahead of the FactSet consensus of 25 cents. Revenue fell 4% to $4.4 billion, matching the FactSet consensus. “Our services segment delivered substantial margin expansion and continued revenue growth in document outsourcing,” Chief Executive Ursula Burns said in a statement. “Document technology revenue declines moderated and margin improved driven by cost and productivity initiatives.” The company said it is making progress with its plan to separate into two publicly traded companies, and expects the costs of the split to come to $175 million to $200 million pretax, down from earlier estimate of $200 million to $250 million. The company is expecting third=quarter adjusted EPS of 26 cents to 28 cents a share, compared with the current FactSet consensus of 28 cents. Shares were not yet active in premarket trade, but are down 7% in the year so far, while the S&P 500 has gained 6%.

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Merck & Co. reported Friday second-quarter earnings that rose to $1.21 billion, or 43 cents a share, from $687 million, or 24 cents a share, in the same period a year ago. Excluding non-recurring acquisition and divestiture-related costs, adjusted earnings per share came to 93 cents, beating the FactSet consensus of 91 cents. Revenue rose to $9.84 billion from $9.79 billion, above the FactSet consensus of $9.78 billion, with pharmaceutical revenue increasing 2% and animal health revenue growing 7%. Sales of Merck’s top selling drug, Januvia/Janumet, increased 2% to $1.63 billion, beating the FactSet consensus of $1.61 billion. Looking ahead, the drug maker expects 2016 revenue of $39.1 billion to $40.1 billion, surrounding the FactSet consensus of $39.49 billion. 2016 EPS is expected to be $3.67 to $3.77, compared with the FactSet consensus of $3.72. The stock, which was still inactive in premarket trade, has climbed 11% year to date, while the Dow Jones Industrial Average has gained 5.9%.

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Two police officers in San Diego, Calif., were shot late Thursday, according to the San Diego Police Department, which said on its Twitter page that it already has one suspect is custody. A search is underway for other possible suspects and the police department advised Southcrest neighborhood residents “to shelter in place.” The officers were taken to the hospital, but their condition wasn’t immediately available, according to the San Diego Union-Tribune newspaper. The incident comes after the July 7 ambush killing of five Dallas Police Department officers by a 25-year-old sniper who said he was angry about black men being shot to death by police officers.

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