Category: Stock Market News

Although the S&P 500 pullback appears to have ended three sessions ago, with just a 1.6% decline from the Aug. 7 record close of 2,480.91, the number of stocks that have hit fresh 52-week lows is exceeding the number reaching new highs for the fifth-straight session. That would be the longest streak since November 2016, when the S&P 500’s pullback bottomed on Nov. 4 after a 4.8% drop over 2 1/2 months. On Tuesday, new highs outnumbered new lows by a 123-to-65 score on the New York Stock Exchange, and by a 67-to-42 margin on the Nasdaq exchange. Since the 5-day streak started, the S&P 500 has slipped just 0.4%. The index has rallied 1.1% since it closed at a one-month low last Thursday.

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A fourth individual stepped down from President Donald Trump’s manufacturing advisory council on Tuesday in the wake of his response to violence in Charlottesville, Va. The latest to exit is Scott Paul, head of the Alliance for American Manufacturing, a partnership between manufacturers and the United Steelworkers union. Paul said on Twitter it was “the right thing for him to do.” He joins the chief executives of Merck & Co. , Intel Corp. and Under Armour Inc. in quitting the council. Trump said in a tweet shortly before Paul’s that he has “many” CEOs to replace those who leave.

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Global auditing giant KPMG agreed to pay $6.2 million in penalties to settle Securities and Exchange Commission charges that it failed to properly audit Miller Energy, an oil driller that emerged from bankruptcy proceedings last year. The Securities and Exchange Commission said KMPG and a partner, John Riordan, engaged in improper professional. KPMG began auditing Miller Energy Resources in 2011 and, according to the SEC, issued a clean audit report despite the company’s allegedly grossly overstated values for key oil and gas assets. KPMG and Riordan allegedly failed to fully consider the risks of accepting Miller Energy as a client, did not properly staff the audit, and overlooked the overvaluation of certain oil and gas interests that the company had purchased in Alaska the previous year, according to the SEC. KPMG neither admitted or denied the charges but agreed to be censured, pay a $1 million penalty, pay back all the audit fees received from Miller Energy -$4,675,680-and pay $558,319 in interest. Riordan agreed, without admitting or denying the findings, to pay a $25,000 penalty and be suspended from appearing or practicing before the SEC as an accountant, which includes not participating in the financial reporting or audits of public companies. The SEC’s order permits Riordan to apply for reinstatement after two years. KPMG also agreed to significant undertakings designed to improve its system of quality control. Miller Energy was charged with accounting fraud in 2015 and later settled the charges. The company voluntarily delisted its shares in 2015 after filing bankruptcy.

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The Dow Jones Industrial Average gave up slight gains in early trade to negative on Tuesday, as shares of Home Depot pressured the equity gauge. Home Depot’s stock was down $4.40, or 2.8%, and slicing approximately 30 points from the price-weighted Dow . A price move of about $1 in any of its 30 components equates to a roughly 6.85-point tilt in the Dow. A slide in shares of Chevron Corp., falling in line with crude-oil prices , and Nike Inc. weighed on the average, combining to exert a roughly 40-point weight on the Dow. Home Depot’s share decline came even as the home-improvement retailer Home Depot Inc. raised its outlook for the second time this year as it reported better-than-expected second-quarter results. Overall, the Dow was up 10 points, or less than 0.1%, at 22,004, while the S&P 500 index was little changed at 2,465, and the Nasdaq Composite Index was off less than 0.1% at 6,337. All three major benchmarks had opened slightly higher and were on track to book their third straight gain as tensions between the U.S. and North Korea ease and as a batch of economic reports, including retail sales, came in better than expected.

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Shares of Transocean Ltd. tumbled 6.3% in active midday trade Tuesday, after the oil services company announced a stock an agreement valued at $3.4 billion, including debt, to buy Norway’s Songa Offshore in a stock and convertible debt deal. Volume reached 25.4 million shares, already well above the full-day average of 16.2 million shares. The stock hit an all-time intraday low of $7.55 earlier in the session before paring some losses. Under terms of the deal, Songa Offshore shareholders will receive consideration comprised of 50% newly issued Transocean common shares and 50% in bonds convertible into common shares. RBC Capital analyst Kurt Hallead expects Transocean to issue 128.2 million shares, including convertibles, to raise the total share count, or dilute current shareholders, by 32% to 524.7 million shares. Songa shares rocketed 29% to a 17-month high. Transocean’s stock has plunged 47% year to date, while the VanEck Vectors Oil Services ETF has shed 33% and the S&P 500 has gained 10%.

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Traders on the federal-funds futures market ramped up their bets for one more rate hike this year to above 50%, according to CME Group data. 47% of the odds were on a quarter-percentage point point hike for the Dec. 13 policy meeting, and 3.4% of the odds were for a half-percentage point hike. This was in sharp contrast to last Friday’s reading of a 37.4% chance of a bump to interest rates. The shift in sentiment in favor of monetary tightening comes in the wake of a raft of stronger-than-expected economic data led by retail sales and Fed President Dudley’s comments on Monday suggesting he would not rule out a rate hike for this year. The 2-year Treasury yield , sensitive to the outlook for central bank policy, have risen about 5 basis points this week. The increase in odds for a rate hike have also helped lift financial stocks. The Financial Select Sector SPDR ETF climbed around 1.8% this week-to-date, while Goldman Sachs rose 2.3% over the same period.

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Shares of J.C. Penney Co. Inc. dropped 3.9% in morning trade Tuesday, putting them on track to close at a third-straight record low since the department store chain reported a wider-than-expected second-quarter loss. The stock has now plunged 32.7% amid a 5-session losing streak, the worst 5-day stretch since the stock began trading in January 1972, according to an analysis of FactSet data. J.C. Penney has been trying to fend off the “Amazon effect” which has led to several bankruptcies of brick-and-mortar retailers, by closing stores and focusing on categories such as appliances, but data within the July government retail sales report suggested that Penney’s efforts may be for naught. The report said department store sales fell 3.9% from a year ago and electronics and appliance store sales declined 0.5%, while nonstore retailer sales rose 11.5%. The stock has now tumbled 56% year to date, while the SPDR S&P Retail ETF has shed 12% and the S&P 500 has gained 10%.

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Uber Technologies Inc. has agreed to 20 years of third-party audits after Federal Trade Commission said that Uber misrepresented how much access employees had to personal information on consumers and drivers. After news reports in 2014 claimed that employees were “improperly accessing consumer data,” Uber said that it would monitor employee access. However, the FTC found Uber used its automated system that monitored access for less than a year and for nine months after that “rarely monitored” employee access. Further, the FTC alleges that Uber did not securely store the data, which later led to a data breach in May 2014, when more than 100,000 names and drivers license numbers were taken. Under the agreement with the FTC, Uber said it will not misrepresent how it monitors employees’ access to the data nor how it keeps that data secure. It also says it will put a new privacy program in place and have that program audited within 180 days and then every two years after that for the next 20 years.

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The Dow Jones Industrial Average gave up slight gains in early trade to negative on Tuesday, as shares of Home Depot pressured the equity gauge. Home Depot’s stock was down $4.69, or 3%, and slicing approximately 30 points from the price-weighted Dow . A price move of about $1 in any of its 30 components equates to a roughly 6.85-point tilt in the Dow. A slide in shares of Chevron Corp., falling in line with crude-oil prices , and Nike Inc. weighed on the average, combining to exert a roughly 40-point tilt to the Dow. Home Depot’s decline came even as the home-improvement retailer Home Depot Inc. raised its outlook for the second time this year as it reported better-than-expected second-quarter results. Overall, the Dow was up 2 points, or less than 0.1%, at 21,998, while the S&P 500 index was off about 0.1% at 2,464, and the Nasdaq Composite Index was off 0.1% at 6,336. All three major benchmarks had opened slightly higher and were on track to book their third straight gain as tensions between the U.S. and North Korea ease and as a batch of economic reports, including retail sales, came in better than expected, before retreating in late-morning trade.

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Shares of Fifth Third Bancorp. rallied 2.1% in morning trade Tuesday after the regional bank disclosed a stock repurchase agreement with Goldman Sachs & Co. to buy back $990 million worth of Fifth Third’s shares. Under terms of the agreement, Fifth Third will pay Goldman $990 million on Aug. 17, and expects to receive a “substantial majority” of the shares in the agreement by that day. The transaction is expected to be settled on or before Dec. 19. At current prices, the agreement would allow Fifth Third to buy back 36.33 million shares, or about 4.9% of the shares outstanding. Fifth Third said the repurchases would be part of the 100 million share buyback program announced in March. The stock has gained 1.0% year to date, while the SPDR S&P Regional Banking ETF has lost 3.0% and the S&P 500 has climbed 10.1%.

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