Category: Stock Market News

Anthem Inc. said Thursday it plans to challenge a Department of Justice lawsuit aimed at preventing a merger with Cigna Corp. . Anthem called the lawsuit “unfortunate and misguided,” based on “a flawed analysis and misunderstanding” of the health care landscape. The company said it is also open to a settlement with the Department of Justice so long as it would allow the merger to proceed. The merger, one of two proposed by four large U.S. health insurers, is being disputed on antitrust concerns. Aetna and Humana Inc. also said Thursday they would dispute a Justice Department lawsuit in court. Anthem shares dropped 2.9% over the last month, and Cigna shares rose 5.4%, compared with a 4.0% rise in the S&P 500 .

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Natural-gas futures added to earlier gains on Thursday after the U.S. Energy Information Administration reported that supplies of the commodity rose 34 billion cubic feet for the week ended July 15. That was below the average rise of 40 billion cubic feet expected by analysts polled by S&P Global Platts. Total stocks now stand at 3.277 trillion cubic feet, up 471 billion cubic feet from a year ago and 559 billion cubic feet above the five-year average, the government said. August natural gas rose 4.7 cents, or 1.8%, at $2.705 per million British thermal units from Wednesday’s settlement. It traded at $2.664 before the data.

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Aetna and Humana Inc. said Thursday they would “vigorously” defend a planned merger against a Department of Justice lawsuit. The companies said that the merger has “tremendous value” to customers and thus “the facts do not support the basis for DOJ action.” The $34 billion merger of Aetna and Humana, and a $48 billion deal for Anthem to buy Cigna, have encountered resistance from the Justice Department on grounds of reduced competition. All four companies’ shares dropped amid reports of a planned Justice Department lawsuit. Humana shares dropped 17.1% over the last month, and Aetna stock dropped 3.2%, compared with a 4.0% rise in the S&P 500 .

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Earnings reports are undercutting the Dow Jones Industrial Average Thursday, as shares of the three components that reported since Wednesday’s close are currently the three biggest percentage decliners. Intel Corp.’s stock was the biggest loser, shedding $1.55, or 4.3%. American Express Co. shares shed $1.07, or 1.7%, while Travelers Companies Inc.’s stock lost $1.30, or 1.1%. The $3.92 combined price decline was shaving about 27 points off the price of the Dow, which was down 35 points. All three companies beat earnings expectations, but revenue fell short.

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Tyco International Plc said Thursday it expects its merger with Johnson Controls Inc. to close on September 2. The company said it will pay an accelerated dividend of 23 cents a share on August 26 to shareholders of record as of August 5. Shares rallied 4.9% in early trade, while Johnson Controls shares rose 3.6%. The S&P 500 was down 0.03%.

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European banks rose on Thursday after European Central Bank President Mario Draghi suggested using public money to tackle the level of bad loans in the eurozone banking system. The Stoxx Europe 600 banks index jumped 0.6% after trading with losses earlier in the day. Speaking at the ECB’s monetary policy news conference Draghi said a public backstop for non-performing loans would be “very useful,” but it should be agreed with the European Commission. Draghi also warned the level of bank loans is problem a for future profitability and bank lending. “We want to avoid fire sales,” he said. The comments come after concerns have risen in recent weeks that the level of bad loans at Italy’s banks could blow up the country’s financial system and threaten its membership in the eurozone. Italian banks are neck-deep in non-performing loans, with official data putting the total at around 200 billion ($220.5 billion), or around 8% of total loans. The issues have been reflected in Italian bank shares, with focus particularly on Siena-based Banca Monte dei Paschi , which is down 74% so far this year. The European Central Bank earlier this month asked BMPS to cut its gross nonperforming loan exposur to €14.6 billion by 2018 from €46.9 billion in 2015.

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Stocks opened mostly lower Thursday, putting the Dow industrials on track to end a nine-session win streak — the index’s longest such streak since March 2013. Investors focused on the European Central Bank meeting, at which benchmark interest rates were left unchanged, while a flurry of economic data in the U.S. reflected moderate but steady growth. A barrage of earnings results drove individual stocks, while a drop in oil prices also weighed on sentiment. The Dow Jones Industrial Average fell 10 points, less than 0.1%, to 18,581, the S&P 500 index lost less than a point, or less than 0.1% at 2,173, while the Nasdaq Composite Index advanced 3 points, or 0.1%, to 5,092. Among individual stocks, Southwest Airlines Co. dropped nearly 10% after weaker-than-expected earnings, while General Motors Co. jumped 4% toward a three-month high after strong quarterly results. Qualcomm shares surged 7% following quarterly results.

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Shares of Qualcomm Inc. rose 7.5% on Thursday following the company’s stronger-than-expected earnings report late Wednesday and a number of price target increases. Qualcomm’s stock target was raised to $55 from $50 at Nomura, to $67 from $59 at Pacific Crest, to $70 from $67 at Credit Suisse, to $67 from $59 at Stifel Nicolaus and to $59 from $55 at RBC Capital. The mobile-chip maker reported quarterly revenue of $6 billion on Wednesday, topping analyst expectations of $5.6 billion, according to FactSet. The stock opened at $59.80 on Thursday. It has risen 16% over the last three months, outperforming the S&P 500 , which is up 4%.

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General Mills Inc. disclosed Thursday that it will cut 420 jobs in Brazil and 440 jobs in China, as part of a restructuring of certain international product lines. The job cuts are a result of the snack giant’s plan to close a snacks manufacturing facility in Marilia, Brazil, to cease production of meals and snacks at its facility in Sao Bernardo do Campo, Brazil and to cease production of underperforming snacks at its Nanjing, China facility. The company also said in the filing that it made a “tentative decision” to close its facility in Vineland, New Jersey, which would affect 370 jobs. In addition, the company reached an agreement to sell its dry mixes plant in Martel, Ohio, which will affect 180 jobs. General Mills expects to record charges of $42 million for its moves in Brazil and China. The closure of its Vineland plant is expected to cost $67 million, while the sale of its Martel plant will lead to a loss of $11 million. The stock, which tacked on 0.6% in premarket trade, has run up 24% year to date through Wednesday, while the S&P 500 has gained 6.3%.

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European Central Bank President Mario Draghi on Thursday stressed the need to tackle the level of bad loans in the eurozone banking system, saying they are a problem for future profitability and bank lending. Speaking at the ECB’s monetary policy news conference, Draghi outlined three ways to address non-performing loans, which are particularly an issue in Italy. The central bank boss suggested a consistent supervisory approach, a development of a full-functioning NPL market and government action. “And possible also having a public backstop,” he said. “We want to avoid fire sales”. The comments come after concerns have risen in recent weeks that the level of bad loans at Italy’s banks could blow up the country’s financial system and threaten its membership in the eurozone. Italian banks are neck-deep in non-performing loans, with official data putting the total at around 200 billion ($220.5 billion), or around 8% of total loans. The issues have been reflected in Italian bank shares, with focus particularly on Siena-based Banca Monte dei Paschi , which is down 74% so far this year. The European Central Bank earlier this month asked BMPS to cut its gross nonperforming loan exposur to €14.6 billion by 2018 from €46.9 billion in 2015.

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