Stock Market News

Dow industrials dragged lower in late-morning trade as IBM’s stock drop cuts 40 points

The Dow Jones Industrial Average on Friday morning was being dragged lower on the back of a sharp decline in shares of International Business Machines Corp. The Dow component was down 3.7%, or about $6.14, which translates to a more than 40-point weight on the blue-chip benchmark. The slide in IBM’s shares occurred despite fourth-quarter results that topped Wall Street estimates, and returning to revenue growth. IBM’s shares has beaten earnings expectations for 13 straight quarters but its stock has still suffered. A $1 swing in any one of the Dow’s components translates to a $6.83-point move in the benchmark. The Dow was most recently flat, with Armonk, N.Y.-based technology company anchoring the average lower. The S&P 500 index was up 0.2% at 2,803, while the Nasdaq Composite Index was showing a 0.2% gain at 7,311.

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ADT’s stock opens below IPO price, which was already well below expectations

ADT Inc.’s stock opened at $12.65 on the NYSE at 10:21 a.m. ET, or 9.6% below the initial public offering price of $14. Since the open, the stock has traded in a range of $12.55 to $12.97. The home security services company’s IPO had priced late Thursday well below the expected range of $17 to $19. The company sold 105 million shares in the IPO, before options granted to underwriters, to raise $1.47 billion, and to give the company a $10.5 billion valuation. ADT’s IPO comes at a time when the Renaissance IPO ETF has gained 5.5% over the past three months and the S&P 500 has rallied 9.4%.

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IBM’s stock slump is a 40-point drag on the Dow industrials in late-morning trade

The Dow Jones Industrial Average on Friday morning was being dragged lower on the back of a sharp decline in shares of International Business Machines Corp. The Dow component was down 3.6%, or about $6, which translates to a roughly 40-point weight on the blue-chip benchmark. The slide in IBM’s shares occurred despite fourth-quarter results that topped Wall Street estimates, and returning to revenue growth. IBM’s shares has beaten earnings expectations for 13 straight quarters but its stock has still suffered. A $1 swing in any one of the Dow’s components translates to a $6.83-point move in the benchmark. The Dow was most recently down 33 points with the lion’s shares of that decline coming from the Armonk, N.Y.-based technology company. The S&P 500 index was up 0.1% at 2,800, while the Nasdaq Composite Index was showing a 0.1% gain at 7,303.

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GE stock’s 5-day plunge of 15% is its worst run in 9 years

General Electric Co.’s stock tumbled 3.6% in morning trade Friday, putting it on track to suffer the worst five-day stretch since the depths of the Great Recession, in the aftermath of the company’s disclosure of a surprise massive loss in its legacy insurance business. The stock, which was trading at the lowest level seen since Dec. 2, 2011, has now plunged 15.0% amid a five-session losing streak. That would be the biggest five-day percentage decline since it plunged 17.0% in the five days ending March 6, 2009, which was the day after it closed at a 16 1/2-year low of $6.66. On Monday, GE said it take a fourth-quarter after-tax charge of $6.2 billion and make a $3 billion capital contribution to its insurance subsidiary that will grow to $15 billion by 2024. That follows GE’s transformation plan announced in November, which also helped extend price declines. The stock has now shed 48% over the past 12 months, while the Dow Jones Industrial Average has rallied 32%.

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U.S. stocks open higher, eye modest weekly gains

U.S. stock-market indexes opened slightly higher on Friday and were on track to book modest weekly gains. The S&P 500 and Nasdaq were trading above previous record closing levels, as investors shrugged off fears of a potential government shutdown. The S&P 500 rose 6 points, or 0.2%, to 2,804. The tech-heavy Nasdaq Composite index advanced by 19 points, or 0.3%, to 7,315. The Dow Jones Industrial Average rose 24 points, or 0.1%, to 26,028. All three indexes were set for weekly gains of less than 1%. Among the worst performers on Wall Street, shares of IBM sank in the wake of fourth-quarter results.

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Facebook seeing strong early traction for new video platform: analyst

A new Morgan Stanley survey found strong early interest in Facebook Watch, the company’s newly launched video platform. Morgan Stanley analyst Brian Nowak wrote Friday that 40% of Facebook Inc. use Facebook Watch weekly, while 24% of them use it daily. “We are encouraged (and admittedly surprised) by this early Watch traction as it speaks to Facebook’s ability to drive adoption of new products,” Nowak wrote. “We view Watch (and video) as the next key long-term driver of Facebook engagement and monetization.” Three-quarters of survey respondents who use Facebook Watch said they view videos shorter than 20 minutes every week through the platform, while half reported weekly viewings of videos that were longer than 20 minutes. Nowak wrote that these patterns are similar to what the firm has observed among viewers of Alphabet Inc.’s YouTube service. YouTube remains the leader for video consumption, he added. Facebook shares are up 41% over the past 12 months, while Alphabet shares have gained 38% and the S&P 500 is up 24%.

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Amazon raises the monthly Prime membership fee by nearly 20%

Amazon.com Inc. has raised the cost of its monthly Prime membership fee to $12.99 from $10.99, a nearly 20% rise. The $99 cost of the full-year Prime membership has not changed. In October, Amazon launched a Prime Student offer at $5.49 per month, which is now $6.49. Prime Video membership will stay at $8.99. Amazon said more than four million people started Prime trials or started paid memberships in one week during the holiday season. Amazon shares are up 1% in Friday trading and up 60% for the past 12 months. The S&P 500 index is up 23.6% for the period.

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IBM’s post-earnings stock selloff cuts Dow’s gain by more than half

Shares of International Business Machines Corp. sank 3.1% in premarket trade Friday, in the wake of fourth-quarter results, which would cut the Dow Jones Industrial Average’s gain by more than half. IBM’s stock price decline of $5.22 would shave about 36 points off the Dow, while Dow futures were up about 22 points. The stock’s pullback comes after it had run up 10% so far in 2018 to close Thursday at a nine-month high. A stock selloff after earnings isn’t much of a surprise, as it is on track to suffer the 12th one-day, post-earnings decline in the past 14 quarters. Meanwhile, IBM has beat earnings-per-share expectations for 13-straight quarters.

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Apple poised to beat iPhone ASP estimates: analyst

Apple Inc. shares were little changed in premarket trading Friday after analysts at Mizuho predicted that the company would beat average selling price estimates for the latest quarter when it reports results Feb. 1. “IPhone ASP expectations seem very low,” wrote Mizuho’s Abhey Lamba, who predicts an average selling price of between $780 and $790 for the device, above consensus estimates for $752. His prediction for 80 million to 81 million iPhone units sold during the December quarter also implies upside to consensus figures. “We continue to see healthy upgrade activity within the installed base which, along with better services contribution, should help the company perform,” Lamba wrote. He raised his price target on Apple shares to $175 from $160 but kept his neutral rating on the stock. Apple shares are up 50% over the past 12 months, while the Dow Jones Industrial Average is up 32%.

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Chip pricing trends could boost AMD, Nvidia and Micron results: analyst

Chip pricing trends remain strong, according to Mizuho analyst Vijay Rakesh, and he thinks that could bode well for Advanced Micro Devices Inc. , Nvidia Corp. , Micron Technology Inc. and Western Digital Corp. in the first half of the year. Sold-state drive (SSD) pricing looks “robust,” Rakesh wrote, and “should be a tailwind for Micron and WDC.” Meanwhile, regarding graphics processing unit (GPU) pricing, Rakesh thinks the trends continue to suggest “tight inventory and availability.” Accordingly, he sees upside potential for Nvidia’s and AMD’s GPU segments for the December and March quarters. “We believe it is key to understand that pricing reflects more of a stronger GPU demand and tight GPU inventory than a pricing tailwind,” he added. Nvidia shares are up 113% over the last 12 months, while AMD’s stock is up 28%. The Philadelphia Semiconductor Index has risen 49% in that time, compared with a 24% gain for the S&P 500 .

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