Category: Stock Market News

Shares of Rambus Inc. tanked in Monday’s extended session after the technology licensing company issued a weak outlook for the current quarter. Rambus reported its first-quarter earnings shrank to $1.88 million, or 2 cents a share, from $9.5 million, or 8 cents a share, a year earlier. On an adjusted basis, the company earned 13 cents a share. Revenue fell to $72.7 million from $72.9 million. Analysts surveyed by FactSet had forecast earnings of 5 cents a share on revenue of $73.3 million. Rambus projected second-quarter revenue of $72 million and $77 million, below analysts’ outlook of $78.7 million. Shares skidded 9.9% in after-hours trading.

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International Business Machines Corp. rose in Monday’s extended session after the technology giant turned in better-than-expected earnings but posted an year-on-year drop in revenue for a 16th straight quarter. IBM reported its first-quarter earnings slid to $2.01 billion, or $2.09 a share, from $2.33 billion, or $2.35 a share, a year earlier. Excluding charges and items, Big Blue would have earned $2.35 a share. Revenue declined to $18.68 billion versus $19.59 billion. Analysts surveyed by FactSet had forecast adjusted earnings of $2.09 a share on revenue of $18.29 billion. IBM shares climbed 1.3% in after-hours trading.

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The Dow Jones Industrial Average on Monday closed above the key 18,000 mark for the first time since July as better-than-expected corporate earnings offset the disappointment over the failure of oil producers to limit crude output during a meeting in Doha, Qatar, over the weekend. However, companies like Hasbro Inc. and PepsiCo Inc. , which reported early Monday, turned in robust quarterly earnings, helping to soothe investors’ sentiment. The Dow Jones Industrial Average gained 106 points, or 0.6%, to end at 18,004, while the S&P 500 rose 13 points, or 0.7%, to close at 2,094. The Nasdaq advanced 21 points, or 0.4%, to finish at 4,960.

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Nordstrom Inc. said on Monday that it expects to cut between 350 and 400 jobs as it undergoes changes to its operating model. The changes are estimated to save about $60 million in fiscal 2016. Most of the positions will be among the corporate center and regional support teams, with cuts to be completed by the end of the second quarter. The retailer will first look at closing unfilled job openings, according to a release. Laid off employees will receive separation pay and benefits. Nordstrom shares are up 0.8% in Monday trading, but down 31.8% over the past year. The S&P 500 is up 0.6% for the past year.

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Gold futures closed fractionally higher Monday, but momentum for the precious commodity and other metals remained strong in the wake of a failed attempt to freeze oil output by some of the world’s largest producers on Sunday. Traders believe that the metal is likely to trade higher amid worries about global growth and slumping crude prices . June gold settled 40 cents, or less than 0.1%, higher at $1,235 an ounce. The upbeat close for the yellow metal comes even as the Dow Jones Industrial Average climbed, touching an intraday level of 18,000 on Monday–a point not reached by the blue-chips benchmark since July, suggesting growing optimism around risky assets like stocks.

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Imax Corp. said Monday that Walt Disney Co.’s “The Jungle Book” took in $20 million on 901 3-D screens this weekend, making it the biggest-ever Imax opening for a PG-rated movie. The movie theater operator said the movie’s domestic take was $10.3 million on 376 Imax screens, while the movie brought in $9.7 million on 525 screens internationally. Imax’s stock surged 3%, putting it on course to close at the highest level since Jan. 11. it has lost 8.2% year to date, while the S&P 500 has gained 2.2%. Overall, “Jungle’s” total weekend box office was about $103.6 million, according to Box Office Mojo, or well above expectations of around $80 million.

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S&P Ratings Services on Monday warned of rising default risks at Chinese state-owned companies as the government pursues its restructuring to transition to a consumption-driven economy. The reforms are likely to most negatively affect companies in capital-intensive sectors, such as steel, mining, building materials, and shipbuilding, said S&P credit analyst Christopher Lee in a statement. The analyst warned that debt at some of the largest state-owned enterprises have reached a “critical level” with debt at about five times earnings before interest, taxes, depreciation and amortization. “We believe the leverage of SOEs will continue to rise in 2016 as a weak topline is not fully offset by cost cuts and capex reduction,” he said. China is in the process of revamping its economy to be less reliant on the manufacturing sector but the process is expected to be a painful one for the country as it is expected to result in an economic slowdown. Economists are projecting China’s gross domestic product growth to slow further in 2016 following a 6.9% expansion in 2015.

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Loxo Oncology Inc. stock was up as much as 15.6% in Monday morning trade after announcing positive phase 1 trial results for its cancer drug LOXO-101. The company said the drug showed results for five different cancers, and five of seven patients with a cancer mutation called TRK gene fusions showed a “confirmed partial response.” The trial enrolled 43 patients that were treated with the drug at five dose levels. Loxo stock was trading at $29.61 late Monday morning, compared with Friday’s closing price of $25.92. Loxo shares have swelled 44.9% in the past three months, compared with an 11% rise in the S&P500.

Related: Almost half of venture-backed IPOs this year are losers

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Citigroup Inc.’s stock shed 0.9% in morning trade Monday, bucking the gains in financial sector and the broader stock market, after the bank was downgraded at Keefe, Bruyette & Woods, which cited concerns over relative relative returns and valuation. Analyst Brian Kleinhanzl cut his rating to market perform from outperform, but kept his stock price target at $51, which is 14% above current levels. Meanwhile, the S&P 500 index was up 0.3% and the SPDR Financial ETF gained 0.2% in morning trade, while shares of J.P. Morgan Chase & Co. climbed 0.4%, of Bank of America Corp. rose 0.5% and of Wells Fargo & Co. tacked on 0.4%. “We are downgrading shares of Citigroup since we believe returns will remain range-bound near term and shares are not expected to outperform peers,” Kleinhanzl wrote in a note to clients. Citigroup’s stock surged 11% last week, after it was one of the few banks that beat first-quarter earnings and revenue expectations, and was the only the bank that has its “living will” approved unanimously. It has lost 14% year to date, while the financial ETF has slipped 3.7% and the S&P 500 has gained 2.2%.

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Shares of Walt Disney Co. surged 2.4% to a three-month high in morning trade Monday, after the “The Jungle Book” box office take in its opening weekend was well above expectations. Disney’s stock was by far the best performer among components of the Dow Jones Industrial Average , with the second-biggest gainer–J.P. Morgan Chase & Co.’s stock –up just 0.9%. “Jungle” took in $103.6 million this weekend, according to Box Office Mojo, compared with expectations of around $80 million. “‘The Jungle Book’ will be the talk of the town for the next couple weeks,” analyst Mike Hickey at Benchmark wrote in a note to clients. “It’s an opening number that exceeds all expectations despite the pre-release buzz.” Disney’s stock has now run up 13% since closing at a 16-month low of $88.85 on Feb. 10. It is still down 4.2% year to date, while the Dow is up 2.8%.

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