Category: Stock Market News

The federal government ran a budget deficit of $88 billion in May, the Treasury Department reported Monday, up from $53 billion in the same month a year ago. Spending was $329 billion in the month, compared to $277 billion in May 2016. Receipts for May were $240 billion, up from $225 billion a year ago. The Treasury said that the monthly deficit would have been much narrower if not for one additional Wednesday in May 2017 and a shift of timing in benefit payments. For the fiscal year to date, the deficit is up 7%. The budget year runs from October through September.

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From:: Stock Market News

The recent selloff in Amazon.com Inc.’s stock , amid a broad pullback in technology stocks, has cost Founder and Chief Executive Jeffrey Bezos enough to knock him back down to being the third richest human, according to the Bloomberg Billionaires Index. Bezos owns 79.9 million shares of Amazon, or 17% of the e-commerce giant’s shares outstanding, according to FactSet. With the stock down down $10.95, or 1.1%, on Monday, after shedding $31.96, or 3.2%, on Friday, the value of Bezos’s holding has dropped $3.43 billion. Based on Friday’s closing prices, Bezos is worth $83.9 billion, behind Microsoft Corp. Co-Founder Bill Gates at $89.2 billion and Spain’s fashion tycoon Amancio Ortega at $84.6 billion, according Bloomberg.

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Coherus BioSciences Inc. shares dropped 27.2% to $15.03 in midday trade Monday after the company said that the Food and Drug Administration failed to approve its drug. The drug, CHS-1701, is a biosimilar version of Amgen Inc.’s Neulasta , which helps prevent infections for patients receiving chemotherapy. The FDA asked for a sample reanalysis and “certain additional manufacturing related process information,” but did not ask the company to do a clinical study, Coherus said. The company said that the information requests would probably cause a delay to market of about 13 months, but it plans to work with the FDA to get CHS-1701 approved. Biosimilar drugs are expected to bring down drug prices and save the U.S. health care system billions of dollars, but few biosimilars have been approved since the FDA created a pathway for approval seven years ago. Coherus shares have dropped 36.1% over the last three months, compared with a 2.2% rise in the S&P 500 .

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J.C. Penney Co. Inc. said Monday that it will preview a collection of dresses, shoes and crossbody handbags from the Libby Edelman fashion brand at 500 of its stores starting July 14. A complete fall lineup including boots, totes, jackets and scarves will launch September 8. Libby Edelman is co-creator of the Sam & Libby and Sam Edelman brands. J.C. Penney shares are up nearly 3% in Monday trading, but down nearly 40% for the year so far. The S&P 500 index is up 8.3% for 2017 to date.

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Gymboree’s Chapter 11 bankruptcy filing lifts the Fitch U.S. retail sector 12-month loan default rate to 2.7% from 1.7%, the ratings agency said Monday. Gymboree has had a high level of indebtedness since a 2010 leveraged buyout transaction, and the children’s retailer faced $1 billion in debt maturities over the next 22 months, as of March 14. Fitch expects Gymboree to emerge from bankruptcy as a smaller company after store closures, but facing competition from companies like Children’s Place Inc. and department stores. “Fitch is forecasting the [U.S. retail sector default] rate to rise to 9% by year end 2017, which would include a filing by heavily indebted Sears Holdings Corp. ($2.5 billion of term loans outstanding) that swings the rate by about 4%,” the Fitch note said. “Fitch’s expectation of increasing retail defaults stems from increased discounter (including off-price and fast-fashion apparel) and online penetration, along with shifts in consumer spending toward services and experiences. These factors have created a highly competitive retail environment and accelerated adverse trends in mall-based shopping.” Other retailers on Fitch’s list of Loans of Concern or Bonds of Concern are Claire’s Stores Inc., Nine West Holdings Inc. and True Religion Apparel Inc. The SPDR S&P Retail ETF is down nearly 7% for the year so far while the S&P 500 index is up 8.4% for the period.

See also: J.C. Penney, Gymboree and J. Crew at risk – and it’s not all Amazon’s fault

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Alibaba Group Holding Inc. flipped from losses to gains in Monday’s session, despite a rough morning for tech stocks, after MKM Partners increased its price target on the stock and said its cloud offering is poised to dominate the Chinese market. MKM Partners analyst Rob Sanderson hiked his 12-month price target to $177 from $155 and extolled Alibaba’s opportunity in e-commerce as well as enterprise technology in the world’s most populous country. “The company’s strategy extends well beyond eCommerce or its ecosystem of online properties; Alibaba aspires to digitize all business in China and serve billions of consumers globally,” Sanderson wrote in a note stemming from the company’s bullish analyst day last week. Sanderson also wrote a separate note on Alibaba’s cloud business after attending a cloud computing conference in China over the weekend, calling the company’s Alicloud offering “the largest pool of computing resources in Asia.” Alibaba shares, which were trailing Friday’s closing price early in the session, moved to daily gains of more than 1.5% after the notes arrived about an hour into Monday’s trading session.

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Netflix Inc.’s stock dipped into correction territory in early morning trade on Monday before paring some losses, as it led the FANG stocks — Facebook Inc. , Amazon.com Inc. , Netflix and Alphabet Inc. (Google) — in their second straight session of declines. Netflix shares fell as much as 6% on Monday from Friday’s close. The stock hit an intraday low of $148.31, down 10.6% from the June 8 record high of $165.88. The stock has bounced slightly since then, to be down 2.9% at $153.38, or 7.5% below the record close. Many on Wall Street define a correction as a decline of at least 10% to up to 20% on a closing basis from a significant peak. Declines of 20% or more are considered bear markets. Netflix shares have gained 23.8% in the year to date, while the S&P 500 index is up 8.4% during the same period.

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Attorney General Jeff Sessions will testify before the Senate Intelligence Committee on Tuesday in an open session, the panel announced Monday. It is the same committee that former FBI Director James Comey appeared before last week, and Sessions is expected to be questioned as part of the panel’s investigation into Russian efforts to interfere in last year’s election. Sessions has recused himself from the Justice Department’s Russia probe.

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U.S. stocks fell in early trading on Monday, with the technology sector set to extend a decline that began in Friday’s session. The Dow Jones Industrial Average fell 11 points, or 0.1%, to 21,260. The S&P 500 lost 5 points to 2,427, a decline of 0.2%. The Nasdaq Composite Index lost 56 points to 6,152, a decline of 0.9%. The Technology Select Sector SPDR ETF shed 1.3%, contributing to the outsize decline in the Nasdaq, which is heavily weighted toward tech names. Among the most active stocks in the sector, Apple Inc. fell 3.2% while Netflix Inc. fell 2.5% and Facebook Inc. slid 1.2%. Amazon.com Inc. was down 1.3%. Outside the tech sector, investors were also looking ahead to the Federal Reserve, which is widely expected to announce an interest-rate hike on Wednesday.

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Alleging violation of constitutional anti-corruption clauses, District of Columbia and Maryland’s attorney generals plan to announce a lawsuit against President Donald Trump on Monday, according to media reports. The suit will claim that Trump violated a constitutional provision called the emoluments clause, which states U.S. officials can’t accept gifts or benefits from foreign governments. “The emoluments clauses command that… the president put the country first and not his own personal interest first,” said Maryland Attorney General Brian E. Frosh (D), in comments to the Washington Post. Along with D.C. Attorney General Karl A. Racine (D), they say Trump has failed to separate his duties as president from his private businesses.

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