Category: Stock Market News

Netflix Inc. shares jumped nearly 9% after the company reported adding a second-quarter record 5.2 million subscribers. For the second quarter, Netflix reported net income of $65.60 million, or 15 cents per share, compared with $40.76 million, or 9 cents per share during the year-earlier period. FactSet’s earnings per share consensus was for 16 cents. Revenue for the quarter hit $2.79 billion, up from $2.11 billion during the same period a year ago and above FactSet’s $2.76 billion consensus. The streaming giant passed the 100 million subscriber milestone, adding 1.1 million domestic subscribers and 4.1 million international subscribers. FactSet had forecast that Netflix would add 631,000 subscribers in the U.S. and Canada and 2.6 million overseas. Shares of Netflix have gained nearly 31% in the year to date, while the S&P 500 index is up nearly 10% in the year.

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Oil prices settled lower Monday pressured by a report from the Energy Information Administration that shows a monthly rise in U.S. shale-oil production. The government agency sees a climb of 113,000 barrels a day in August output from seven major shale plays, compared with July. August WTI crude fell 52 cents, or 1.1%, to settle $46.02 a barrel on the New York Mercantile Exchange.

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Shares of cemetery and funeral home operator StoneMor Parnters L.P. slid more than 10% Monday, after the company said it is in default on its revolving credit agreement after failing to file its annual 10-K with the Securities and Exchange Commission by a July 15 deadline. The delay was caused by an accounting review that has not yet been completed. Trevose, Pennsylvania-based StoneMor said that makes it likely that it will miss a separate SEC deadline for its quarterly 10-Q for the March period. “The Partnership has communicated with all its lenders that it will be seeking a waiver or other relief to extend the time for filing the Form 10-K and expects to seek similar relief to extend the time for filing the Second Quarter 10-Q,” the company said in a statement. StoneMor said it still expects the review to lead to a net decrease in deferred revenue and selling costs and an increase in partners’ capital on its balance sheet. It does not expect any material impact on cash flows for the three years ended December 31, 2016. StoneMor is the only publicy traded death care company that is structured as a partnership. Shares are down 10% for 2017 so far, while the S&P 500 has gained 10%.

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VMware Inc. stock gained Monday morning after a report said that the software company is in talks with Amazon.com Inc.’s cloud business to expand their partnership into software for corporate data centers. The Information reported Monday, based on an anonymous source, that VMware and Amazon Web Services are discussing developing software for corporate data centers that would allow companies better access to public-cloud resources like AWS while keeping some information on their own servers. The hybrid-cloud software approach would be a first for Amazon on such a large scale, and could allow VMware, an important software component for many data centers, to address a larger market of companies that want a hybrid-cloud approach. The two rivals are already working on a partnership that would allow AWS customers to access the VMware public cloud. Neither company confirmed the talks with The Information, though VMware cloud exec Mark Lohmeyer said, “there will definitely be opportunities to create more integration points between VMware and AWS over time.” VMware jumped after the report landed about a half-hour into Monday’s trading session, and was up about 2.5% in midday trading; Amazon had gained about 0.9% as the S&P 500 and other broad indexes tracked gains of about 0.1%.

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Shares of mining and metals companies got a boost Monday from rising copper prices, after Chinese GDP and industrial production data beat expectations. Copper for September delivery rose 1.7% to $2.7355 a pound on the Comex division of the New York Mercantile Exchange, their highest level since early March. Gold was also higher with August contracts up 0.5% at $1,233.50 a troy ounce. Adding to the updraft, Jefferies on Friday said it expects a significant increase in capital returns from metals and mining companies this earnings season as balance sheets are strong and cash is abundant. Jefferies named Freeport McMoRan as one of its top picks. Freeport stock surged 3.8% to lead S&P 500 gainers. Newmont Mining rose 1.2%, and Southern Copper Corp. gained 2.3%. Rio Tinto ADRs were up 1%. The iPath Bloomberg Copper Subindex Total Return ETN was up 1.1%, while the S&P 500 was flat.

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The second quarter is typically a soft one for Netflix Inc. subscriber additions, but Canaccord analyst Michael Graham believes the streaming giant will far exceed subscriber expectations. Graham, who rates Netflix a buy with a $175 price target, is forecasting that Netflix will report domestic subscriber additions of 1.1 million, compared with analysts consensus of 631,000, according to FactSet. While that would likely be driven by the timing of content releases, it would still be significant as Netflix’s growth in the U.S. has slowed. “We believe Netflix is firing on all cylinders, with a robust original content pipeline buoying domestic subscribers, expanded localization efforts increasing international penetration and long-term building blocks being put in place to solidify sustainable growth,” Graham wrote in a note to investors. “While our net add estimates are meaningfully above consensus, we think the company can hit our expectations given a strong Q2 slate.” Last year during the same second-quarter period, Netflix reported adding 1.7 million subscribers, which was below Wall Street expectations of 2.5 million adds. Shares of the streaming company were pummeled in after-hours trading following that earnings report. Netflix will report its earnings for the second quarter after the market closes on Monday. Netflix shares have gained more than 29% in the year to date. By comparison, the S&P 500 index is up nearly 10%, while the Dow Jones Industrial Average up more than 9% and the tech-heavy Nasdaq Composite index is up more than 17%.

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Shares of Apple Inc. surged 0.8% in morning trade Monday, enough to pace the Dow Jones Industrial Average’s gainers, after Morgan Stanley raised its price target, to be the third highest among the 44 analysts surveyed by FactSet. The stock’s price gain of $1.23 was adding about 8.5 points to the price of the Dow’s, which was down 14 points. Analyst Katy Huberty bumped her price target up to $182 from $177. The new target is 21% above current levels, 12% above the average target of the 44 analysts surveyed by FactSet of $162.12. When Apple reports on Aug. 1, Huberty expects the company to provide a “weaker-than-consensus” outlook for its fourth quarter ending in September, because of the slightly later iPhone launch than typical–October shipment rather than the usual September. But that delay “creates a dynamic of much better-than-normal December and March quarter seasonality, providing an attractive set up for the stock looking beyond the September guide,” Huberty wrote in a note to clients. The stock has rallied 5.9% over the past three months, while the tech-heavy Nasdaq 100 has climbed 8.4% and the Dow Jones Industrial Average has gained 4.8%.

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KKR & Co. said Monday that Joe Bae and Scott Nuttall would be appointed co-presidents and co-chief operating officers. Both men have more than 20 years of experience at the firm, and will be responsible for day-to-day operations. Alex Navab will retire as Head of Americas Private Equity, and Todd Fisher, chief administrative officer, will depart KKR to pursue other opportunities, the firm announced. KKR shares were slightly higher in early trade, and have gained 26% in 2017, while the S&P 500 has gained about 10%.

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U.S. stocks opened little-changed on Monday, with the main indexes hovering near record levels set last week. Investors will focus on earnings reports this week, which started off with banks reporting mixed results last week. The S&P 500 was unchanged at 2,458. The Dow Jones Industrial Average was flat at 21,623. The Nasdaq Composite index ticked up 5 points, or 0.1%, to 6,317. Among early movers, BlackRock, Inc dropped more than 2% after quarterly results missed estimates.

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Multi-Color Corporation. said Monday it has signed an agreement to acquire the labels division of Constantia Flexibles for about $1.3 billion in cash and stock. The division is part of Constantia Flexibles GmbH, an Austrian provider of flexible packaging and labels. The combined annual revenue of the two businesses is about $1.6 billion, the companies said in a statement. The deal “brings together Constantia Labels’ high performing Food and Beverage business with Multi-Color’s strong Wine and Spirit, and Home and Personal Care platforms, and emerging global position in Healthcare,” said the statement. Multi-Color is expecting the deal to be “meaningfully accretive” to per-share earnings in fiscal 2019, the first full year of combined results. It is expected to close in the third quarter of fiscal 2018. Multi-Color said it still expects June quarter core EPS of about 80 cents. Multi-Color shares were halted for the news premarket, but have gained 6% in 2017, while the S&P 500 has gained about 10%.

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