Category: Stock Market News

The European Central Bank, as expected, left interest rates unchanged at its policy meeting on Thursday. In a statement, the ECB said it expected rates “to remain at the present or lower levels for an extended period of time, and well past the horizon of the net asset purchases.” The central bank also said it was also confirming that monthly asset buys of 80 billion euros a month are intended to run until March 2017, “or beyond” if necessary, and in any case until [the Governing Council] sees a sustained adjustment in the path of inflation consistent with its inflation aim.” ECB’s main refinancing rate stands at 0%, while the deposit rate paid on money parked overnight at the bank remains at minus 0.4%. The rate on the ECB’s marginal lending facility remains at 0.25%. ECB President Mario Draghi’s news conference is scheduled for 2:30 p.m. Frankfurt time, or 8:30 a.m. Eastern.

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General Motors Co.’s stock ran up 5.4% in premarket trade Thursday toward a three-month high, after the car maker reported second-quarter profit and sales that were well above expectations and raised its full-year outlook. Earnings for the latest quarter rose to $2.9 billion, or $1.81 a share, from $1.1 billion, or 67 cents a share, in the same period a year ago. Adjusted earnings per share came in at $1.86, beating the FactSet consensus of $1.52. Revenue rose to $42.4 billion from $38.2 billion, above the FactSet consensus of $38.2 billion. Global vehicle sales were flat at 2.4 million. For 2016, GM raised its adjusted EPS outlook to $5.50 to $6.00 from $5.25 to $5.75; the FactSet consensus is $5.66. “Our results were generated by strong retail sales in the U.S., record sales in China and a continued emphasis on improving the performance of our operations worldwide,” said Chief Executive Mary Barra. The stock has declined 7.4% year to date through Wednesday, while the S&P 500 has tacked on 6.3%.

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Theranos Inc. is appointing two new executives to head regulatory and compliance efforts, the company said Thursday. The company has also created a compliance and quality committee to oversee the efforts. Dave Wurtz, previously a senior director of compliance at ThermoFisher Scientific, was named vice president, regulatory and quality, and Daniel Guggenheim, previously an assistant general counsel for regulatory law at McKesson Corp., was named chief compliance officer. Both will report to Elizabeth Holmes, the chief executive officer. The appointments come after U.S. regulators have banned Holmes from operating a medical laboratory for at least two years after issues with blood testing at Theranos.

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Biogen Inc.’s stock surged 5.3% in premarket trade Thursday, after the biotechnology company beat second-quarter earnings and revenue expectations and provided an upbeat full-year outlook. That offset the announcement that Chief Executive George Scangos will leave after six years at the company, after a successor is found. Earnings for the quarter ended June 30 rose to $1.05 billion, or $4.79 a share, from $927.3 million, or $3.93 a share, in the same period a year ago. Adjusted earnings per share came in at $5.21, above the FactSet consensus of $4.67. Revenue increased 12% to $2.89 billion from $2.59 billion, beating the FactSet consensus of $2.79 billion. For 2016, Biogen expects adjusted EPS of $19.70 to $20.00, above the FactSet consensus of $18.90. Revenue is expected to be $11.2 billion to $11.4 billion, surrounding the FactSet consensus of $11.29 billion. The stock has tumbled 14% year to date through Wednesday, while the S&P 500 has gained 6.3%.

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Travelers Cos. Inc. said Thursday it had net income of $664 million, or $2.24 a share, in the second quarter, compared with $812 million, or $2.53 a share, in the year-earlier period. Adjusted per-share earnings came to $2.20, above the FactSet consensus of $2.04. Revenue rose to $6.785 billion from $6.710 billion, also above the FactSet consensus of $6.353 billion. Earnings were pressured by catastrophe and non-catastrophe weather-related losses, as well as lower net investment income in the low interest-rate environment, the insurer said. Shares were not yet active in premarket trade, but are up 3.7% in the year so far, while the Dow Jones Industrial Average has gained almost 7%.

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Shares of Southwest Airlines Co. dropped 2.4% in premarket trade Thursday, after the air carrier reported second-quarter profit and revenue that missed expectations and provided a downbeat outlook for the current quarter. Earnings for the quarter ended June 30 rose to $820 million, or $1.28 a share, from $608 million, or 90 cents a share, in the same period a year ago. Excluding non-recurring items, adjusted earnings per share came in at $1.19, below the FactSet consensus of $1.21. Revenue increased to $5.38 billion from $5.11 billion, missing the FactSet consensus of $5.40 billion. For the third quarter, Southwest expects Revenue per available seat mile (RASM) to decline in the 3%-4% range, and it expects unit costs to increase by about 2%. The company expects to launch a $250 million accelerated share repurchase program in the third quarter. The stock has lost 2.4% year to date through Wednesday, while the S&P 500 has gained 6.3%.

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Russian track and field athletes have lost an appeal to let them compete in the 2016 Rio Olympics after the Court of Arbitration for Sport on Thursday upheld a ban. In November, Russian athletics was barred from competition by the International Association of Athletics Federation (IAAF) following a report that found evidence of widespread state-sponsored doping. The Russian Olympic Committee and 68 athletes appealed the decision to CAS, but after hearing both sides, the court rejected the appeal. “As a consequence, the CAS Panel confirmed that the ROC is not entitled to nominate Russian track and field athletes to compete at the Rio 2016 Olympic Games considering that they are not eligible to participate under the IAAF competition rules,” the court said in its statement. The International Olympic Committee is considering a total ban on all Russian competitors amid reports of state-sponsored doping. With only 15 days until the opening ceremony in Rio, that means Russia still doesn’t know whether any of their sportspeople will be able to take part.

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Komatsu Ltd. has agreed to buy U.S. mining-equipment maker Joy Global Inc. in a $2.89 billion deal. The Japanese construction machinery maker said it’s paying $28.30 per share for Joy Global, an 18% premium over the company’s closing price of $23.55 on Wednesday. Komatsu plans to finance the takeover through funds on hand and bank loans and sees no need to increase capital at this stage. “The acquisition is in line with the growth strategy of the plan which calls for the company to strengthen the core mining equipment business in an effort to achieve sustainable growth,” Komatsu said in a statement Thursday. The deal is expected to close in mid-2017. Shares of Joy Global were unchanged premarket, while Komatsu rose 2.3% in Tokyo.

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Tesla Motors Inc. co-founder and CEO Elon Musk released his “Master Plan, Part Deux” in a blog post Wednesday night, outlining his vision for the electric-car and battery-storage company’s future. His four points of emphasis were: create stunning solar roofs with seamlessly integrated battery storage; expand the electric vehicle product line to address all major segments; develop a self-driving capability that is 10X safer than manual via massive fleet learning; enable your car to make money for you when you aren’t using it.

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Select Comfort Corp. shares fell in the extended session Wednesday after the maker of Sleep Number beds topped Wall Street expectations on earnings but not on revenue. Select Comfort shares fell 11% to $21 after hours. The company reported second-quarter earnings of 3 cents a share on revenue of $276.9 million. Analysts surveyed by FactSet had forecast earnings of a penny a share on revenue of $283.5 million. Select Comfort reiterated its full-year earnings forecast of $1.25 to $1.45 a share, while analysts are looking for $1.27 a share. The company also said it was increasing its share buyback program by $300 million.

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