Category: Stock Market News

Embattled U.K. Labour Party leader Jeremy Corbyn has lost a vote of no-confidence by a wide margin, according to a report from Sky News. 172 MPs voted for the motion, Sky reported, while 40 voted against it. While the vote was nonbinding, it’s likely that several of Corbyn’s rivals will challenge him in a leadership contest. More than 40 Labour MPs on Corbyn’s front bench and in his shadow cabinet have quit since the U.K. voted to leave the European Union in a historic referendum on Thursday. Disaffected MPs charge that Corbyn did little to bolster support for the “remain” vote. The British pound trimmed its gains slightly following the reports, buying $1.3310 in recent trade.

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Wal-Mart Stores Inc. shares were nearly flat in Tuesday trading even as shares of other retailers bounced back from a broad market downturn after the Brexit vote. Since the “leave” result was announced, Wal-Mart outperformed the Dow, slipping just 0.8% while the Dow fell 4.8% in the past two days. On Tuesday, shares were nearly unchanged, even as companies like Target Corp. and Kohl’s Corp. move into positive territory. Competitors in the grocery space are, like Wal-Mart, struggling to make gains, with Whole Foods Market Inc. and Fresh Market Inc. also largely flat and Kroger Co. down 0.3%. Wal-Mart shares are up 16.7% for the year to date while the S&P 500 is down 1.2% for the same period.

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Shares of online travel services companies rallied Tuesday, after suffering sharp losses amid concerns over the fallout from the U.K. vote to leave the European Union. Expedia Inc.’s stock ran up 2.8% in morning trade, after tumbling 10% over the past two sessions while the S&P 500 was falling 5.3%. Shares of Priceline Group Inc. surged 2%, Sabre Corp. gained 1% and TripAdvisor Inc. rose 1.6%; over the past two sessions, Priceline’s stock plunged 15%, Sabre shares shed 5.7% and TripAdvisor’s dropped 9%. Of the four, Pacific Crest analyst Brad Erickson said Sabre shares are “the most attractive and defensive” after Brexit, given that its exposure to the U.K. was “almost immaterial.” He said the other three stocks, which he rates sector weight, are now more attractive after the Brexit-related selloff. Of the three, Erickson said he prefers Expedia.

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Carnival Corp.’s stock surged 4.5% in morning trade Tuesday, after the cruise operator reported fiscal second-quarter profit and revenue that rose above expectations. For the quarter ended May 31, earnings increased to $605 million, or 80 cents a share, from $222 million, or 29 cents a share, in the same period a year ago. Excluding non-recurring items, adjusted earnings per share came to 49 cents, above the FactSet consensus of 39 cents. Revenue rose to $3.71 billion from $3.59 billion, above the FactSet consensus of $3.68 billion, with passenger ticket revenue of $2.70 billion topping expectations of $2.68 billion. Looking ahead, Carnival expects third-quarter adjusted EPS of $1.83 to $1.87, below the FactSet consensus of $1.98. The company also announced a new $1 billion stock repurchase program. The stock, which had tumbled 12% in the past two sessions in the wake of the U.K.’s vote to leave the European Union, has shed 16% year to date, while the S&P 500 has gained 1.2%.

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U.S. stocks rebounded Tuesday as Wall Street attempted to steady itself after two days of brutal losses in the aftermath of the U.K.’s vote on Friday to quit the European Union. The Dow Jones Industrial Average gained 154 points, or 0.9%, to 17,294, the S&P 500 index rose 18 points, or 0.9%, to 2,018, while the Nasdaq Composite Index advanced 52 points, or 1.2%, to 4,648. A sharp rise in crude-oil prices, with U.S. benchmark West Texas Intermediate oil trading up 2.6% at $47.55 a barrel, also offered support to stock gains. The climb comes after a brutal, two-day rout in global equities that saw more than $3 trillion in value washed away following Britain’s referendum on Friday to leave the EU, known as Brexit. In stocks, pharmaceutical company Regulus Therapeutics was under pressure after the Food and Drug Administration placed one of its drugs on clinical hold. Meanwhile, embattled LendingClub Corp. said it planned on eliminating 200 jobs. The moves from the online lender come after Chief Executive Renaud Laplanche in May was pushed out after the board said it found problems with its lending practices.

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Amazon.com Inc. said Tuesday that is adding more than 50 new brands to its lineup of Dash Buttons. The wireless Dash buttons, which allow users to order a specific item by pushing a button on the small devices, are adding brands such as NERF, Campbell’s Soup and Pepperidge Farm Goldfish Crackers and Play-DOH to bring the total number of buttons to 150. Amazon said orders through Dash Button grew 70% in the past three months and the company now sees two orders placed per minute with the buttons. Shares of Amazon were up 1.3% in premarket trade.

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Apple Inc.’s stock rose 1.1% in premarket trade Tuesday, bouncing after two days of losses as part of the market turmoil in wake of the U.K. vote to leave the European Union. The stock had lost 4.2% over the past two sessions, but outperformed the Dow Jones Industrial Average , which shed 4.8%. Apple generated 2.3% of revenue over the last 12 months from the U.K., according to estimates derived from FactSet’s proprietary algorithm, and about 15% of its revenue from Europe. RBC Capital analysts had said in a recent note to clients that companies with strong cash positions and stable operating profiles, such as Apple, may do relatively well amid the Brexit uncertainty.

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Shares of Babcock & Wilcox Enterprises Inc. plunged 8.7% in light premarket trade Tuesday, after the power generation company slashed its 2016 profit outlook and said it would cut 200 jobs as part of a restructuring of its coal-fired power generation business. The company now expects 2016 adjusted earnings per share in the range of 63 cents to 83 cents, down from guidance of $1.25 to $1.45 it provided last month. The FactSet consensus is for EPS of $1.38. The company expects severance and other costs associated with the restructuring to be $55 million to $60 million over the next 12 months, and anticipates U.S. coal customers demand to be down 15% to 20% by 2017 or 2018. The stock had lost 9.3% year to date through Monday, while the S&P 500 has slipped 2.1%.

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McKesson Corp. announced Tuesday an agreement to with software and analytics company Change Healthcare Holdings Inc., in which it will combine its technology solutions business with Change Healthcare to create a new separate healthcare information technology company. McKesson will own 70% and Change Healthcare will own 30% of the new entity, with fiscal 2016 combined revenue of $3.4 billion. “This is a bold, innovative transaction that creates a company with an enhanced ability to help customers address their increasingly complex financial and clinical challenges,” said McKesson Chief Executive John Hammergren. Separately, McKesson said it was exploring strategic alternatives for its enterprise information solutions business. McKesson’s stock, which was still inactive in premarket trade, has dropped 12% year to date, while the S&P 500 has slipped 2.1%.

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Bank stocks, which took some of the hardest beatings in the wake of the U.K. vote to leave the European Union, bounced in premarket trade Tuesday as investors took a breather from the global risk-off trade for the time being. The SPDR Financial Select Sector ETF climbed 1.1% ahead of the open, after tumbling 8.1% the past two sessions. Shares of Bank of America Corp. surged 2.6%, Citigroup Inc. climbed 2.1% and J.P. Morgan Chase & Co. rallied 1.5%. Over the past two sessions, BofA’s and Citigroup’s stocks had both plunged 13% while JPMorgan’s dropped 10%. The yield on the 10-year Treasury note rose 3.6 basis points early Tuesday, after plunging about 28 basis points the past two sessions. Banks can benefit from rising longer-term interest rates, as it increases the spread they earn from funding longer-term asssets, such as loans, with shorter-term liabilities. Elsewhere, the U.S.-listed shares of the U.K.’s Barclays PLC gained 2.6%, after plummeting 37% the past two sessions.

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