Category: Stock Market News

U.S. stocks opened lower Thursday as central banks around the globe were indicating a desire to exit from ultra-easy monetary policies that prevailed during the heart of the 2008-’09 financial crisis. The Dow Jones Industrial Average fell 0.2% at 21,424, the S&P 500 index slipped 0.4% at 2,423, while the Nasdaq Composite Index declined 0.6% at 6,114, after posting Wednesday’s best performance among the U.S. equity benchmarks. Wall Street has closely followed recent central bankers’ comments about the strength of the global economy, with recent remarks from the European Central Bank lifting expectations that policy makers may be ready to close a chapter in longstanding monetary-easing programs, which have supported prices in bonds and stocks around the world. Minutes from the ECB released Thursday indicated that the central bank was worried about how best to communicate increasing confidence on the eurozone economy without roiling markets. Those minutes, coming after the Federal Reserve’s minutes on Wednesday, helped to drive bond prices lower and yields higher. The 10-year German bond yield hit an 18-month high at 0.54%, while the 10-year Treasury not climbed to 2.37% on the day. On the economic front, a reading of private-sector employment showed that employers added a seasonally-adjusted 153,000 jobs during the month, below the 180,000 jobs that a consensus of economists had forecast. Meanwhile, initial jobless claims in the period between June 25 and July 1 increased 4,000 to a seasonally adjusted 248,000. Economists use these numbers to get a feel for the official nonfarm-payrolls report due on Friday, with the consensus estimate at 179,000 new jobs created in June. In corporate news, shares of Tesla Inc. extended Wednesday’s decline after the electric car maker’s Model S failed to receive a top safety award. Shares of General Electric slumped after the EU’s antitrust watchdog said GE may have misled regulators when the EU was reviewing its $1.65 billion deal with LM Wind Power.

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Shares of General Electric Co. slumped 1.8% in premarket trade Thursday, after J.P. Morgan slashed its price target, citing an uncertain outlook and a lack of growth potential. Analyst C. Stephen Tusa reiterated his bearish underweight rating on the industrial conglomerate, and cut his stock price target to $22, which is 20% below Wednesday’s closing price of $27.35, from $27. The stock traded at $26.85 ahead of the open; the stock hasn’t closed below $27 since Oct. 5, 2015. Tusa said the GE narrative “is as open and undefined as it’s been in decades,” with the new CEO likely to set the course over the second half of the year on a material restructuring that includes setting portfolio priorities, a change in the capital allocation strategy and new long-term growth targets. While a fresh start is expected under John Flannery, who will become CEO on Aug. 1, but “we don’t see a quick or easy fix to the current predicament,” Tusa wrote in a note to clients. “Unlike other resets where the multiple expands, we don’t see the future growth potential as a catalyst here, and are cutting our price target to $22 and remain [underweight].” The stock has dropped 13.5% year to date through Wednesday, while the Dow Jones Industrial Average has gained 8.7%.

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BeiGene Ltd. shares surged 12.6% in premarket trade Thursday on news of its cancer collaboration with Celgene Corp. . BeiGene will receive $263 million in upfront licensing fees, and is eligible for up to $980 million in milestone payments and royalties, the companies said, and Celgene will acquire 5.9% of BeiGene’s shares at $59.55. BeiGene shares closed at $52.27 on Wednesday. Under the deal, the companies will work to develop and commercialize BeiGene’s cancer drug BGB-A317 in solid tumor cancers in much of the world (except Asia but including Japan), while BeiGene will retain development and commercialization rights for the drug in some other areas. BeiGene will also acquire Celgene’s China commercial operations and exclusively license Celgene drugs that have been approved in China. The deal is expected to close in the third quarter. Celgene shares have surged 7.2% over the last three months and BeiGene shares have surged 41.2%, compared with a 3.2% rise in the S&P 500 .

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Liberty Interactive Corp. said Thursday that it is acquiring the remaining 61.8% stake in HSN Inc. in a deal that equates to a total enterprise value of $2.6 billion. The acquisition is an all-stock transaction. HSN will become a wholly-owned subsidiary attributed to the QVC Group tracking stock. HSN Inc. consists of the multichannel retailer HSN and Cornerstone, a portfolio of home and apparel brands including Garnet Hill and Frontgate. After the deal closes, HSN headquarters will remain in St. Petersburg, FL, and QVC chief executive Mike George will remain in his position. HSN shareholders will receive fixed consideration of 1.65 shares of Series A QVC stock for every share of HSN stock. Liberty Interactive plans to issue 53.4 million shares of QVC Series A common stock. The acquisition is expected to be complete in the fourth quarter of 2017. HSN shares are halted until 8:30 am ET, but are down 36.6% for the last year. Liberty Interactive shares are down 3.4% for the past 12 months. The S&P 500 index is up nearly 16% for the last year.

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Sanmina Corp. said Thursday that it will appoint Chief Financial Officer Bob Eulau as chief executive officer, effective Oct. 2. He will replace current CEO Jure Sola, who will assume the role of executive chairman on Oct. 2. Sola has been CEO since 1991, and Eulau has been CFO since September 2009. “Bob and I have collaborated for the last eight years and he has been instrumental in the successful transformation of Sanmina, making this a perfect time for him to become Sanmina’s next chief executive officer,” Sola said. The electronics contract manufacturer’s stock, which was still inactive in premarket trade, has gained 4.4% year to date through Wednesday, while the S&P 500 has climbed 8.7%.

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Fred’s Inc. said Thursday that June sales were lower than expected, and are expected to hurt fiscal second-quarter results to the point that the drug store chain no longer expects improvement from the sequential first quarter. Total sales for the month fell 5.3% from a year ago to $197.5 million, while same-store sales declined 1.6%. company said combined pharmacy same-store sales increased 3.5%, but front store sales continued to face headwinds in consumer consumables categories, and with cooler than average temperatures hurting summer seasonal sales. “Our lower than anticipated June sales and the headwinds we are facing will impact our second quarter results, and we no longer expect sequential improvement from the first quarter,” said Chief Executive Michael Bloom. The stock, which was still inactive in premarket trade, has plunged 60% year to date through Wednesday, while the SPDR S&P Retail ETF has lost 8.5% and the S&P 500 has gained 8.7%.

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Costco Wholesale Corp. shares are up 2.5% in Thursday premarket trading after the company reported June sales of $12.17 billion, up 7% from $11.33 billion the year before. Same-store sales for the five weeks ending July 2 were up 6% in total, and 6.5% in the U.S. For the 44 weeks ending July 2, sales were $104.28 billion, up 6% from $98.51 billion year over year. Costco’s stock is down 1.3% for the year so far while the S&P 500 index is up 8.7% for the period.

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American International Group Inc. said it has named Peter Zaffino as its new chief operating officer, effective August 1. Zaffino comes to the role from Marsh LLC, a unit of insurance brokerage Marsh & McLennan Cos. Inc. , where he was chief executive. Zaffino has also done stints at Guy Carpenter & Co. and at a GE Capital portfolio company. He will have a base salary of $1.25 million, a short-term annual bonus target of $3 million and an annual long-term incentive award of $4.25 million. The executive will also receive a signing-on bonus of $15 million, partly in the form of stock options. AIG shares were slightly lower premarket, but are down 3.8% in 2017, while the S&P 500 has gained 8.7%.

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Shares of Egalet Corp. plunged 27% toward a record low in premarket trade Thursday, after the developer of pain treatment drugs announced a public offering of common stock. The company said late Wednesday the size of the offering was subject to market conditions. The company had 25.6 million shares outstanding as of May 10. Egalet said it plans to use the proceeds of the offering to support commercial sales and marketing with respect to Arymo ER (morphine sulfate) extended-release tablets for oral use, Sprix (ketorolac tromethamine) nasal spray and Oxaydo (oxycodone HCI) tables and for general corporate purposes. The stock was trading at $1.85, below the previous record close of $2.14 on June 1. The stock has plummeted 67% year to date through Wednesday, while the SPDR S&P Pharmaceuticals ETF has climbed 11% and the S&P 500 has gained 8.7%.

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L Brands Inc. shares fell 3.9% in Thursday premarket trading after it announced June sales of $1.21 billion, a 6% decline from a year ago. L Brands portfolio includes Victoria’s Secret and Bath & Body Works. Same-store sales for the five weeks ending July 1 fell 9%. The company said exiting the swim and apparel categories hurt total company and Victoria’s Secret same-store sales by 7 percentage points and 10 percentage points respectively. Sales of $4.42 billion for the 22 weeks ending July 1 were a 6% decline from the $4.73 billion the year prior. Same-store sales for the period fell 9%. L Brands shares are down 21% for the last year while the S&P 500 index is up nearly 16% for the period.

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