Category: Stock Market News

Baker Hughes on Friday reported that the number of active U.S. rigs drilling for oil climbed by 2 to 766 rigs this week. The oil-rig count tallied a fall of 1 rig last week, after two-straight weeks of gains. The total active U.S. rig count, which includes oil and natural-gas rigs, was also up 8 at 958, according to Baker Hughes. September West Texas Intermediate crude was little changed from the level it traded at before the data. It was up 63 cents, or 1.3%, at $49.67 a barrel on the New York Mercantile Exchange.

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Wells Fargo Securities analyst Bonnie Herzog said Friday that a new Food and Drug Administration plan to lower nicotine levels in cigarettes could be a long-term opportunity for makers of reduced-risk products like Altria Group Inc. and Philip Morris International Inc. . Shares of cigarette producers plunged after the FDA announcement, with Altria plummeting 9.6%, Philip Morris declining 0.4% and British American Tobacco plunging 7.2% in extremely heavy midday trade. Altria and Philip Morris, however, have a “unique competitive advantage” with smokeless iQOS devices. Philip Morris said “iQOS heats the tobacco just enough to release the flavorful nicotine-containing vapor but without burning the tobacco.” Even so, one medical journal study found that smoke from heat-not-burn cigarettes have 85% of the nicotine in conventional cigarettes. “We see this as an opportune entry point for long-term investors and would recommend building positions on today’s broad weakness,” Herzog said. “We also note that PM/MO’s premarket tobacco product application with the FDA to commercialize iQOS in the U.S. remains under review.” Altria shares have dropped 6.9% over the last three months and Philip Morris shares have risen 5.8%, compared with a 3.6% rise in the S&P 500 .

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Align Technology Inc. shares surged 9% Friday to lead S&P 500 gainers, after the maker of Invisalign dental braces blew past second-quarter earnings estimates. San Jose, California-based Align said late Thursday it had net income of $69.2 million, or $85 cents a share, in the quarter, up from $50.1 million, or 62 cents a share, in the year-earlier period. Revenue rose to $356.5 million from $176.9 million. The FactSet consensus was for EPS of 72 cents and revenue of $344 million. North American shipments rose 27.6% while international shipments jumped 37%. The company said Invisalign shipments to the teen market rose 37.6%, after hitting a milestone of 1 million teen patients. The company said it now expects net revenue of $355 million to $360 million in the third quarter, and EPS of 78 cents to 81 cents. The FactSet consensus is for EPS of 81 cents and revenue of $359 million. Leerink analysts welcomed the progress made in the key teen market. “Our recent diligence suggests that orthodontists see Invisalign potentially capable of addressing 60+% of their Teen cases, which would be well-above our 8% estimated penetration into Align’s North American teen TAM (“fully loaded” ~3.94M cases) by 2020,” they wrote in a note. Align shares have gained 77% in 2017, while the S&P 500 has gained 11%.

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Shares of Redfin Corp. debuted Friday on the Nasdaq with a bang, opening at $19.56 at 11:05 a.m. ET, which was 30% above the $15 initial public offering price. The stock has since added to gains be up 35% in morning trade. The real-estate company, which mixes online technology with traditional agents, had priced its IPO above the previously expected range of $12 to $14. The company sold 9.23 million shares to raise over $138 million, and granted underwriters the option to buy an additional 1.38 million shares. The stock was listed on the Nasdaq Global Select Market under the ticker symbol “RDFN.” The stock debuted on a day that the SPDR Real Estate Select Sector ETF was up 0.1% and the S&P 500 was down 0.4%.

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Align Technology Inc. shares surged 8% Friday, after the maker of Invisalign dental braces blew past second-quarter earnings estimates. San Jose, California-based Align said late Thursday it had net income of $69.2 million, or $85 cents a share, in the quarter, up from $50.1 million, or 62 cents a share, in the year-earlier period. Revenue rose to $356.5 million from $176.9 million. The FactSet consensus was for EPS of 72 cents and revenue of $344 million. North American shipments rose 27.6% while international shipments jumped 37%. The company said Invisalign shipments to the teen market rose 37.6%, after hitting a milestone of 1 million teen patients. The company said it now expects net revenue of $355 million to $360 million in the third quarter, and EPS of 78 cents to 81 cents. The FactSet consensus is for EPS of 81 cents and revenue of $359 million. Leerink analysts welcomed the progress made in the key teen market. “Our recent diligence suggests that orthodontists see Invisalign potentially capable of addressing 60+% of their Teen cases, which would be well-above our 8% estimated penetration into Align’s North American teen TAM (“fully loaded” ~3.94M cases) by 2020,” they wrote in a note. Align shares have gained 77% in 2017, while the S&P 500 has gained 11%.

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The Food and Drug Administration on Friday announced a new plan to lower the nicotine levels in cigarettes to non-addictive levels. Because almost 90% of adult smokers started smoking before the age of 18, lowering nicotine levels could decrease the likelihood that future generations become addicted to cigarettes and allow more currently addicted smokers to quit, the FDA said. The news crushed the stock of cigarette producers including British American Tobacco , Altria Group and Philip Morris International .

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The final reading of the University of Michigan’s consumer sentiment survey for July was lifted to 93.4 from a preliminary 93.1. That’s a decline, however, from June’s level of 95.1. The difference on the expectations index between Democrats and Republicans was 45 index points, the University of Michigan said.

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Bojangles’ Inc. shares sank 10.1% in early Friday trading after second-quarter revenue missed expectations and the company cut guidance. Net income reported late Thursday was $8.6 million, or 22 cents per share, down from $10.0 million last year, or 27 cents per share. Adjusted EPS was 23 cents, beating the 22-cent FactSet consensus. Revenue was $134.4 million, up from $131.6 million but below the $135.0 million FactSet consensus. System-wide same-restaurant sales were down 1.4%. Company-operated comps were down 3.3% while franchised restaurants were down 0.1%. Bojangles now sees fiscal-year 2017 revenue of $549.0 to $553.0, down from previous guidance of $560.0 to $569.0, and adjusted EPS of 81 cents to 84 cents, down from a previous 87 cents to 93 cents. System-wide same-store sales are expected to be negative low-single digits versus previous guidance of negative low-single digits to flat. RBC Capital Markets maintained its sector perform rating on Bojangles shares, but cut the price target to $16 from $20, writing in a note that competitive discounting is a risk. Analysts at SunTrust Robinson Humphrey maintained their buy rating, but also cut the price target to $21 from $24. “Bojangles is pivoting toward value shortly and we expect the promotional environment to become more balanced in coming months, both of which should drive accelerating same-store sales in the second half of 2017 and 2018,” SunTrust analysts wrote. Bojangles shares are down nearly 25% for the year so far while the S&P 500 index is up 10.3% for the period.

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The Treasury Department on Friday announced that it will begin to wind down the myRA program. A program created under the Obama administration, myRA was intended for people who don’t have workplace savings programs. The Treasury Department said the program, which cost nearly $70 million since it was created, was not cost effective. Participants in the myRA program are being notified of the upcoming changes, including information on moving their myRA savings to another Roth IRA. Some 20,000 people were enrolled in the program, according to media reports.

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The consumer-discretionary sector fell on Friday, a day after Amazon.com reported disappointing quarterly results that sent shares of the online retail giant sharply lower. The sector, as measured by the Consumer Discretionary Select Sector SPDR ETF fell 1% in its biggest one-day percentage drop since July 6. Amazon is the largest component of the ETF by far, accounting for nearly 16% of the portfolio, according to FactSet data. Shares of Amazon fell 4.2%, their biggest one-day slide since October. Despite the declines on the day, the ETF remains up 12% for 2017 thus far, while Amazon is up more than 30%. In its results, Amazon reported a 77% plunge in second-quarter earnings, though sales came in ahead of forecasts. Also weighing on the sector was Mattel Inc. and Goodyear Tire & Rubber Co. , both of which also sold off sharply following their own results. Mattel was down 8.8% while Goodyear tumbled 13%.

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