Category: Stock Market News

Oil prices climbed Wednesday, settling at their highest level in about six weeks after the Energy Information Administration reported a third-straight weekly drop in U.S. crude supplies. August WTI crude rose 72 cents, or 1.6%, to settle $47.12 a barrel on the New York Mercantile Exchange. That was the highest settlement since June 6, according to FactSet data.

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Shares of AEterna Zentaris Inc. more than doubled on heavy volume in afternoon trade Wednesday, after the biotechnology company received a favorable ruling by regulators regarding its treatment for growth hormone deficiency in adults, Macrilen. Volume exploded to 38.9 million shares in recent trade, compared with the full-day average of about 260,000 shares. The company said late Tuesday that the Food and Drug Administration accepted the new drug application (NDA) seeking approval of Macrilen as a “complete response.” The FDA granted a Prescription Drug User Fee Act (PDUFA) date of Dec. 30. “We remain confident that the FDA will approve our NDA and, therefore, we are moving forward with our preparations to launch the product in the first quarter of 2018,” said Chief Executive David Dodd. The stock has still lost 30% year to date, while the iShares Nasdaq Biotechnology ETF has climbed 20% and the S&P 500 has gained 10%. The FDA had issued a “complete response letter” (CRL) on Nov. 5, 2014 saying it couldn’t approve the NDA in its present form because the clinical trial didn’t by itself support the indication. The stock closed at a split-adjusted $129.00 the day before the CRL was announced.

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Amazon.com Inc. has added a new feature in its app called Spark, a social network that allows Prime members to shop for items that are discussed. Spark is part of the Amazon iPhone app in the U.S. An Android version is planned. The social network asks users for interests, then feeds content based on those responses. Users can also share a product or story. When customers see something they like, they can tap in Spark to find it on the Amazon site. A shopper’s history will not be visible. Amazon has introduced a number of products and services in recent weeks, including Amazon Wardrobe. Amazon shares are up 0.4% in Wednesday trading and up 37.2% for the year so far. The S&P 500 index is up 10.3% for 2017 to date.

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Moody’s Investors Service placed McCormick & Co. Inc.’s A2 rating on review for a possible three-notch downgrade Wednesday, after the company unveiled plans to acquire Reckitt Benckiser Group Plc.’s food division for $4.2 billion. If the deal closes as currently outlined, it will involve a significant amount of debt that will raise McCormick’s leverage and send its debt/EBITDA ratio to about 5.4 times, said the rating agency. McCormick would actually use $3.7 billion of debt to fund the deal and it would take it several years to come back to its pre-deal credit profile. “McCormick is acquiring iconic, market leading brands with higher profitability than its existing business, but is tripling its debt to do so” said Dominick D’Ascoli, Vice President – Senior Analyst at Moody’s. “This significant increase in financial leverage overshadows the benefits of the acquisition and results in a credit profile that is no longer consistent with its prior rating.” McCormick shares slid 5.2% on the news. The S&P 500 was up 0.4%.

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Apple Inc.’s stock edged up 0.4% in morning trade Wednesday, but that slight gain put it on track to match the longest win streak in three years. The stock is headed for the ninth-straight gain, the longest such streak since the nine-day stretch ending Aug. 25, 2014. There hasn’t been a 10-session win streak since Oct. 18, 2010. J.P. Morgan analyst Rod Hall reiterated on Wednesday his overweight rating and price target of $165, which is 9.6% above current levels. He said that production of new iPhone to be released in the fall appear to be off to a slow start, but he believes those concerns are already reflected in the stock price. “Importantly, we do not believe that Apple’s production schedule is still changing materially with most current delay reports simply dated reverberations of decisions Apple made back in the spring,” Hall wrote in a note to clients. Apple’s stock has now climbed 5.6% during its current win streak, but was still 3.5% below the May 12 record close of $156.10. Year to date, it’s up 30%, while the Dow Jones Industrial Average had gained 9.3%.

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Shares of Scripps Networks Interactive Inc. were up 14% during intraday trade on Wednesday, after a Wall Street Journal report Tuesday night that the media company was in talks to merge with Discovery Communications Inc. . Shares of Discovery were up nearly 4%. The potential tie-up not only makes sense, but could be coming at just the right time, according to MKM Partners analyst Eric Handler. A Scripps acquisition would give Discovery increased relevance and scale, and would be beneficial to Scripps shareholders, Handler wrote in a note to investors. “The possible acquisition of Scripps should prove beneficial for Discovery, and create a company with revenue of roughly $10.5 billion and EBITDA of more than $4 billion,” Handler wrote. “The timing of this potential transaction could be coming at a good time for Scripps, which is seeing erosion in its ratings trends, especially with HGTV, while investment spending for new initiatives remains elevated.” Shares of Discovery are down nearly 2% in the year to date, while Scripps shares have gained more than 16% in the year and the S&P 500 index has gained more than 10%.

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AMC Networks Inc. said on Wednesday it’s proposing a public offering of $500 million of senior notes. The cable network, home to “The Walking Dead,” plans to use a portion of the debt to repay about $450 million in loans, as well as pay fees and expenses related to the debt offering. AMC plans to use the remaining debt for general corporate purposes. AMC shares were up more than 5% intraday on Wednesday and have gained more than 14% in the year to date, while the S&P 500 index is up more than 10% on the year.

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The Dow Jones Transportation Average dropped 71 points, or 0.7%, to buck rally in the broader stock market, with the selloff in railroad stocks and United Airlines’ parent United Continental Holdings Inc. shares accounting for the bulk of the weakness. United’s stock fell $3.33, or 4.2%, in morning trade in the wake of disappointing unit revenue guidance. That was shaving about 20 points off the Dow transports, which is a price-weighted index. Shares of CSX Corp. slumped $2.91, or 5.3%, after investors questioned how the railroad operator beat earnings expectations. That selloff knocked the Dow transports down by about 18 points. In sympathy, shares of Norfolk Southern Corp. shed $2.33, or 1.9%, and Union Pacific Corp.’s stock have up $1.42, or 1.3%, to cut a combined 23 points from the Dow transports. Meanwhile, the Dow Jones Industrial Average rose 12 points, or less than 0.1%, while the S&P 500 tacked on 0.2% and the Nasdaq Composite gained 0.4%. The Dow transports are headed for a third-straight loss, after reaching a record high on July 14.

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Oil prices extended their earlier gains Wednesday to hit fresh session highs after data from the U.S. Energy Information Administration showed that domestic crude supplies fell by 4.7 million barrels for the week ended July 14. That topped the forecast for a decline of 3 million barrels by analysts surveyed by S&P Global Platts. The American Petroleum Institute had reported late Tuesday a rise of 1.6 million barrels. Gasoline stockpiles also fell by 4.4 million barrels, while distillate stockpiles declined by 2.1 million barrels last week, according to the EIA. August crude rose 66 cents, or 1.4%, to $47.06 a barrel on the New York Mercantile Exchange. It traded at $46.67 before the supply data.

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The Dow Jones Industrial Average on Wednesday was being pressured by a sharp drop in shares of International Business Machines Corp., in early trade. IBM’s stock , down 4.3%, was cutting about 45 points from the price-weighed blue-chip Dow after the technology giant reported a year-over-year sales decline for the 21st consecutive quarter, disappointing Wall Street. Wednesday’s early share decline for IBM puts it on track for its worst single-day drop since April 19, when shares tumbled nearly 5% after the Armonk, N.Y. based company reported disappointing first-quarter results. Overall, the Dow is trading at break-even levels at 21,579, with a gain UnitedHealth Group Inc.’s stock helping to lift the gauge. More broadly, the S&P 500 index , up 0.3%, and the Nasdaq Composite Index , advancing 0.4%, were both trading in record territory. IBM’s share decline is particularly biting for investors as the tech sector has staged a notable rebound since tumbling to recent lows on June 9. On Tuesday, the tech-heavy Nasdaq booked its first record close since June 8.

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