Category: Stock Market News

U.S. stocks opened higher on Tuesday, after two-day slump that was driven by the selloff in technology shares. The Nasdaq Composite, which fell nearly 3% over the past two sessions was set to recover some of the losses. Gains on Wall Street were tepid, however, as investors wait for the Federal Reserve’s policy meeting with many expecting a rate hike on Wednesday. The S&P 500 opened 6 points, or 0.3%, higher at 2,435. The Nasdaq Composite was up 37 points, or 0.6%, to 6,213 at the open. The Dow Jones Industrial Average began the session up 40 points, or 0.2%, at 21,276. Among the biggest gainers, NVIDIA Corp jumped about 3% at the open. The stock is up more than 200% over the past 12 months.

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Shares of Alibaba Holdings Group LTD. were climbing 2% in premarket trade Tuesday after the stock’s price target was raised to $190 from $160 at Raymond James. The analysts increased their price target after increasing their fiscal year 2018 revenue and profit estimates, saying they have “increased confidence” in Alibaba’s retail segment revenue growth, particularly as Taobao evolves. Alibaba recently held an analyst day and said it expects revenue growth of 45% to 49% in 2018. Overall, the analysts are bullish on the stock, as Alibaba is showing strong revenue growth and margins, leadership in the cloud and they believe the company will narrow its losses in its investment areas such as digital media. Additionally, they say Alibaba’s valuation is attractive at about 20 times its 2018 core commerce earnings per share. They reiterated a strong buy rating. Shares of Alibaba have gained 32% in the past three months, compared to the S&P 500’s gain of 2.4%.

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Eli Lilly & Co. shares rose 1.5% in premarket trade Tuesday after the company said its pain drug with Pfizer Inc. has received fast track designation from the Food and Drug Administration, which is intended to hasten the development and approval of drugs for serious conditions. Pfizer shares were up 0.2% premarket. The drug, tanezumab, got the designation for chronic pain in patients with osteoarthritis and chronic low back pain. Tanezumab is currently in late-stage development, and results from clinical trials are expected to start being released in 2018, the companies said. If approved, the drug could be a much-needed new tool for doctors amid a national opioid crisis. The drug is also being studied in patients with cancer pain. Eli Lilly shares have dropped 3.9% over the last three months, and Pfizer shares have dropped 4.1%, compared with a 2.4% rise in the S&P 500 .

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The recent sharp selloff in the technology sector appears to be on hold, as the “FAANG” stocks are bouncing nicely ahead of Tuesday’s open. Shares of Facebook Inc.’s rose 0.8% premarket, after shedding 4.1% the past two sessions; Apple Inc. climbed 1.1%, after tumbling 6.2% the previous two sessions; Amazon.com Inc. tacked on 0.9%, after losing 4.5% the past two sessions; Netflix Inc. rallied 1.8% after dropping 8.7% the past two sessions; and Google parent Alphabet Inc. advanced 0.7% after declining 4.2% the previous two sessions. The technology-heavy Nasdaq 100 started selling off on Friday, and extended losses on Monday, with many market watchers blaming profit taking amid concerns over high valuations and geopolitical uncertainty. The index had lost 3.0% the past two sessions, while the S&P 500 had eased just 0.2%. Nasdaq 100 futures were up about 0.3% in recent trade.

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Sears Holdings Corp. said Tuesday that it will eliminate 400 full-time positions at corporate offices and in support roles. Sears said the majority of the positions will be at the Hoffman Estates headquarters, but described the job cuts as global. The struggling retailer first eliminated job openings and reduced contract workers before making cuts to full-time positions. Sears said in April that it would make cost reductions of $1.25 billion in fiscal 2017, and says its actions have created $1.0 billion in annualized cost savings to date. Sears has taken a number of steps to reduce its debt burden in recent months to turn around the company. Sears shares are inactive in Tuesday premarket trading, but are down 41.5% for the past year. The S&P 500 index is up nearly 17% for the last 12 months.

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United Parcel Service Inc. said it will create 575 new full-time equivalent jobs in Indiana with the building of a new $260 million package processing facility in Plainfield, and with improvements to existing buildings in Castleton. The package delivery giant said a portion of the new 893,000-square-foot facility will open this fall. “Central Indiana is a logistics gateway for efficient transportation networks that enhance UPS reliability and service,” said Kevin Church, president of UPS’s Ohio Valley District. The stock, which was still inactive in premarket trade, has lost 5.0% year to date, while the Dow Jones Transportation Average has gained 3.8% and the S&P 500 has climbed 8.5%.

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Shaw Communications Inc. announced Tuesday a deal to sell its wholly-owned subsidiary ViaWest Inc. to Peak 10 Holding Corp. for C$2.3 billion, or the U.S. dollar equivalent of $1.68 billion. Shaw expects net proceeds of C$900 million, or $580 million, from the sale of ViaWest, a provider of provides colocation, cloud computing and security and compliance services, which it bought in 2014. Shaw’s stock, which was still inactive in premarket trade, has climbed 6.8% year to date, while the S&P 500 has gained 8.5%.

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Cheesecake Factory Inc. shares were down 6.1% in Tuesday premarket trading after the restaurant chain issued a downward revision of its second-quarter guidance. Cheesecake Factory now expects second-quarter same-restaurant sales to decline about 1%, compared with previous guidance for an increase of 1% to 2%. The FactSet consensus is for a 1.7% increase. Cheesecake Factory expects the same-store sales decline to hurt second-quarter margins and earnings per share. The company has seen “more volatility in the week-to-week sales trends, indicative of uncertainty on the part of many consumers,” said Chief Executive David Overton in a statement. “Specifically, we have seen pockets of softness as we moved through the quarter, notably in the East and Midwest where we also faced unfavorable weather that reduced patio usage.” Cheesecake Factory shares are down 5.7% for the last three months while the S&P 500 index is up 2.4% for the period.

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Scotts Miracle-Gro Co. cut its profit and sales outlook for the year, with the lawn and garden products company citing a sharp decline in performance in the mass retail segment. The company now expects 2017 earnings per share in the range of $4.00 to $4.20, down from previous guidance of $4.10 to $4.30. U.S. consumer segment sales are now expected to grow 3% to 4% from a year ago, down from its previous projection of 6%-to-7% growth. The company said it has stepped up share repurchase activity in recent weeks, and expects to buy back $250 million to $275 million worth of its shares on a full-year basis. “While we still have 30 percent of the season in front of us, it’s become clear that we’ll fall short of our original plans on both the top and bottom line,” said Chief Executive Jim Hagedorn. “The contingency plans we’ve put in place will help partially offset the sales shortfall we’ve seen thus far, but we are unwilling to cut too deeply if the impact begins to affect our planning for next season.” The stock, which was still inactive in premarket trade, has slumped 12% year to date, while the S&P 500 has gained 8.5%.

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Zimmer Biomet Holdings Inc. said the U.S. Food and Drug Administration has closed out a warning letter issued relating to the musculoskeletal health care company’s manufacturing facility in China. “The successful clearance of the Warning Letter related to our Zhejiang, China manufacturing facility is a measure of the progress we have made in our ongoing quality and operational excellence journey,” said Zimmer Chief Executive David Dvorak. The stock, which was still inactive in premarket trade, has run up 21% year to date, while the S&P 500 has gained 8.5%.

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