Category: Stock Market News

Oil futures pared some of their losses after data from Baker Hughes showed that the number of active U.S. rigs drilling for crude fell by 3 to 351 as of Friday. Meanwhile, the total U.S. rig count fell 3 to 440. May crude futures were at $40.58 a barrel on the New York Mercantile Exchange, down 92 cents, or 2.2%. It was trading as low as $40.30 before the data.

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From:: Stock Market News

Oil futures pared some of their losses after data from Baker Hughes showed that the number of active U.S. rigs drilling for crude fell by 3 to 351 as of Friday. Meanwhile, the total U.S. rig count fell 3 to 440. May crude futures were at $40.58 a barrel on the New York Mercantile Exchange, down 92 cents, or 2.2%. It was trading as low as $40.30 before the data.

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Fitch Ratings on Friday downgraded Macy’s Inc.’s long-term issuer default rating to BBB from BBB-plus on concerns the department store chain will struggle with a plan to boost sales. The rating is now two notches above speculative-grade, or “junk” status. The outlook is stable, Fitch said in a statement. The action “reflects the lack of visibility into a sales acceleration that would meaningfully improve profitability after a 14% EBITDA decline in 2015,” the agency said. Fitch projects a 5% decline in 2016. Fitch is expecting the weakness in the mid-market clothing sector to continue as sales continue to shift online, weighing on growth. As a result, it expects leverage to remain elevated in the high 2 times range, which compares with the 2.2 times to 2.3 times range maintained between 2012 and 2014. It expects the company to use cash to buy back shares instead of repaying debt to keep its shareholders happy. Macy’s is currently looking into real-estate opportunities, but Fitch expects any change in its capital structure would be credit neutral at best. Shares were last up 1.7% and are up 15% in the year so far, while the S&P 500 has gained 1.8%.

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Bats Global Markets Inc. shares surged in their first day of trade after the company priced its initial public offering at $19 a share, the high end of its range. Shares opened up 20% at $22.88 and climbed to as high as $23 in the first ten minutes of trading. The exchange operator, which specializes in exchange-traded funds, had attempted to go public two years ago, but was thwarted by an embarrassing software glitch. The stock is trading on the BATS exchange using that acronym as its symbol. The company sold 13.3 million shares to raise $252.7 million late Thursday, after upsizing the deal from an original 11.2 million. Investors are hoping a successful debut could help reopen the IPO market, which has been all but dead since the beginning of the year amid volatile market conditions. Morgan Stanley and Citigroup were the lead underwriters.

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U.S. stocks opened little changed on Friday, but the main indexes were still on track to post weekly gains. Investors grappled with lower oil prices, earnings report from Citigroup Inc. and mixed economic data on Friday. The S&P 500 was flat at 2,082. The Dow Jones Industrial Average was up 10 points at 17,936. Meanwhile, the Nasdaq Composite was off by 3 points, or less than 0.1% at 4,942 at the open.

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Shares of Ensco PLC tumbled 11% on heavy volume in premarket trade Friday, after the oil services company said it priced an its upsized public share offering 13% below Thursday’s closing price. Volume of 15 million shares five minutes before the open is already above the full-day average of about 11.3 million shares. The company said late Thursday that it was offering 50 million shares for sale to the public, but said Friday that offering increased to 57 million shares. The company also offered the underwriters of the offering an option to buy up to an additional 8.55 million shares. The offering was priced at $9.25, well below Thursday’s closing price of $10.59. Analyst Matthew Marietta at Stephens Inc. said in a research note that he had expected to offering to price at a discount of about 5%, or around $10 a share. The number of shares offered, excluding the option for underwriters, would increase the total shares outstanding, which was about 235.3 million shares according to FactSet, by 24%.

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From:: Stock Market News

Shares of Ensco PLC tumbled 11% on heavy volume in premarket trade Friday, after the oil services company said it priced an its upsized public share offering 13% below Thursday’s closing price. Volume of 15 million shares five minutes before the open is already above the full-day average of about 11.3 million shares. The company said late Thursday that it was offering 50 million shares for sale to the public, but said Friday that offering increased to 57 million shares. The company also offered the underwriters of the offering an option to buy up to an additional 8.55 million shares. The offering was priced at $9.25, well below Thursday’s closing price of $10.59. Analyst Matthew Marietta at Stephens Inc. said in a research note that he had expected to offering to price at a discount of about 5%, or around $10 a share. The number of shares offered, excluding the option for underwriters, would increase the total shares outstanding, which was about 235.3 million shares according to FactSet, by 24%.

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Charles Schwab Corp.’s stock gained 0.9% in premarket trade Friday, after the discount brokerage giant reported first-quarter profit and revenue that rose from year ago levels, with revenue beating expectations. Earnings increased to $412 million, or 29 cents a share, from $302 million, or 22 cents a share, in the same quarter a year ago, matching the FactSet consensus for earnings per share of 29 cents. Revenue grew 16% to $1.76 billion, above the FactSet consensus of $1.75 billion. Profit margin improved to 37.1% from 31.7%, while return on average common stockholders’ equity increased to 13% from 10%. Total client assets at the end of the quarter was $2.56 trillion, up 1% from last year. “The ongoing effect of the Fed’s initial interest rate hike in December has provided a glimpse of Schwab’s earnings power as rates normalize, with our diversified revenue streams generating strong first quarter revenue growth and our steady expense discipline continuing,” said Chief Financial Officer Joe Martinetto. The stock has dropped 13% year to date through Thursday, while the S&P 500 has gained 1.9%.

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Sears Canada Inc. said Friday that its chief financial officer, E.J. Bird, is stepping down to pursue other opportunities, effective June 30. He has been CFO since March 2013. A search is underway for a successor. Billy Wong, senior vice president of finance, will work with Bird until his departure to aid in the transistion. Sears Canada shares are inactive in premarket trading, and down 63% over the past year. The S&P 500 is down 1.1% for the last 12 months.

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Shares of Polycom Inc. soared 8.8% in premarket trade Friday, after the business communications company agreed to be acquired by Mitel Networks Corp. in a cash and stock deal valued at $1.96 billion. Under terms of the deal, Polycom shareholders will receive $3.12 in cash and 1.31 Mitel shares for each Polycom share they own. Based on Thursday’s closing prices, the bid values Polycom shares at $13.44 each, or a 9.5% premium. On Thursday, Polycom’s market capitalization was $1.64 billion, while Mitel’s was $951.9 million. Mitel expects the deal, which is expected to close in the third quarter, to add to earnings in 2017. After closing, the combined company will be based in Ottawa, Canada. Elliott Management, which owns 6.6% of Polycom’s outstanding shares and 9.7% of Mitel’s stock, said it supported the deal. Polycom’s stock has dropped 2.5% year to date, while Mitel’s stock has gained 2.5% and the S&P 500 has advanced 1.9%.

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