Category: Stock Market News

Shares of Ciena Corp. sank 4.8% in active morning trade Wednesday, after Deutsche Bank downgraded the optical networking company a week before it’s scheduled to report fiscal second-quarter results. Analyst Vijay Bhagavath cut his rating to hold from buy on concerns the stock will be range bound in the near term given expectations of that weak margin trends and sales in Europe and Latin America will be balanced with strong results from its cloud business. He cut his stock price target to $23 from $28. “Prudent to stay on the sidelines on this ‘volatile’ optical story,” Bhagavath wrote in a note to clients. The stock has averaged a one-day post-earnings move of 13.2% over the past six quarters, including an average 12% gain on the three up days and an average 14.4% decline on the three down days. The downgrade makes Bhagavath only the fifth of the 25 analysts surveyed by FactSet to not have a bullish rating on Ciena. His price target is now tied for second lowest; the lowest is Drexel Hamilton’s Greg Mesniaeff’s $22 target, according to FactSet. Ciena’s stock has lost 5.1% year to date, while the S&P 500 has gained 7.1%.

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Data from the U.S. Energy Information Administration showed that domestic crude supplies fell by 4.4 million barrels for the week ended May 19. That was the seventh weekly drop in a row reported by the EIA. The American Petroleum Institute late Tuesday reported a fall of 1.5 million-barrel, according to sources, while analysts polled by S&P Global Platts forecast a fall of 2.8 million barrels. Gasoline stockpiles declined by 800,000 barrels, while distillate stockpiles were down 500,000 barrels last week, according to the EIA. July crude traded at $51.58 a barrel, up 11 cents, or 0.2%, on the New York Mercantile Exchange. It traded at $51.51 before the supply data.

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Shares of T. Rowe Price Group Inc. slid 3.6% in morning trade Wednesday, after UBS flipped to bearish from bullish amid concerns over new regulatory rules going into effect next month. Analyst Brennan Hawken cut his rating on the provider of financial advisory services to sell from buy, and slashed his stock price target to $61, which is 11% below current levels, from $77. Based on the negative impact of the 2010 rule that increased transparency into 401K fees, the Labor Department’s fiduciary rule, which is scheduled to go into effect June 9, should lead to outflows from target date funds, increase expenses and accelerate a shift toward passive investing. The fiduciary rule will require financial advisors to act in the clients’ best interest. “TROW has a solid domestic franchise with strong investment performance but we see these positives as more than offset by the overhang from the DOL rule, headwinds from corporate 401K lawsuits and shifts toward passive,” Hawken wrote in a note to clients.

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Democrats on the House Financial Services Committee on Wednesday asked Deutsche Bank for information on whether the accounts of President Donald Trump and his family had any ties to Russia. “Deutsche Bank’s pattern of involvement in money laundering schemes with primarily Russian participation, its unconventional relationship with the President, and its repeated violations of U.S. banking laws over the past several years, all raise serious questions about whether the Bank’s reported reviews of the mirror trading scheme and Trump’s financial ties to Russia were sufficiently robust,” the lawmakers wrote in the letter to Deutsche Bank CEO John Cryan. Democrats say that the chairman of the committee, Rep. Jeb Hensarling, has not responded to their request to use the full investigative powers to examine Deutsche Bank’s Russian money-laundering operation.

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U.S. stocks opened with modest gains Tuesday, with the main indexes hovering near record levels set last week. But trading was subdued as investors refrained from making big bets ahead of minutes from the Federal Reserve’s latest meeting, which could quell doubts about a June interest-rate increase. The S&P 500 opened 2 points, or 0.1%, higher at 2,400. The Nasdaq Composite was up 11 points, or 0.2%, to 6,150 at the open. The Dow Jones Industrial Average began the session flat at 20,937. Among the best performers on Wall Street, Intuit Inc. soared to open in record territory after it raised its profit and revenue outlook for the year.

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Campbell Soup Co. said Wednesday that it has invested $10 million in Chef’d, an online meal kit marketplace, making it the largest investor and giving Campbell a seat on the board. The investment is part of a Series B round of funding for Chef’d. Other investors include Fresh Direct. Campbell said it will benefit from e-commerce insights and data on shopping behavior. The companies will test product innovation and fulfillment tactics over the course of a three-year agreement. Campbell projects that e-commerce food and beverage sales will reach $66 billion by 2021. Campbell Soup shares are down 0.2% in premarket tradings, and down 4.6% for the last year. The S&P 500 index has gained 15.5% for the past 12 months.

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Advance Auto Parts Inc. shares are down 5.8% in Wednesday premarket trading after the company reported first-quarter earnings and sales that missed estimates. Net income was $108.0 million, or $1.46 per share, down from $158.8 million last year, or $2.16 per share. Adjusted EPS was $1.60, missing the $2.16 per share FactSet consensus. Revenue was $2.89 billion, down from $2.98 billion last year and below the $2.95 billion FactSet consensus. Same-store sales fell 2.7% versus the FactSet consensus for a 1.2% decline. Same-store sales were hurt by shifts in New Year’s Day to the first quarter of 2017 and winter demand to December, said Chief Executive Tom Greco in a statement. Advance Auto Parts shares are down nearly 17% for the year so far while the S&P 500 index has gained 7.1% for the period.

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Universal Health Services Inc. shares dropped 4.9% in premarket trade Wednesday after BuzzFeed News reported that a federal investigation into the company now includes the FBI and Department of Defense. The subject of the investigation is whether the hospital management company, which is the largest behavioral health provider in the U.S., keeps patients at its psychiatric facilities for too long to increase revenues, according to BuzzFeed News. Universal Health Services has previously denied BuzzFeed News reports of improper patient treatment at its psychiatric facilities. Universal Health Services shares have dropped 5.7% over the last three months, compared with a 1.3% rise in the S&P 500 .

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Shares of U.S.-listed Chinese companies inched higher in premarket trade Wednesday, as investors shrugged of the downgrade of China’s credit rating. Alibaba Group Holding Ltd.’s stock ticked up 0.2%, while shares of Baidu Inc. tacked on 0.2% and JD.com Inc. edged up 0.2% and Sina Corp. gained 0.6%. Meanwhile, the iShares China Large-Cap ETF ticked 0.1% lower. Moody’s Investors Service cut China’s rating overnight to A1 from Aa3, the first downgrade of the country since 1989. The Shanghai Composite initially fell more than 1% after the downgrade, but bounced to close up 0.1%.

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Chico’s FAS Inc. reported a fiscal first-quarter net profit that rose to $33.6 million, or 26 cents a share, from $31.1 million, or 23 cents a share, in the same period a year ago. The FactSet consensus for earnings per share was 29 cents. The women’s apparel retailer said revenue dropped to $583.7 million from $643.0 million, missing the FactSet consensus of $624.8 million. Overall same-store sales declined 8.7%, compared with the FactSet consensus of a 2.2% decline, amid big misses at Chico’s and White House Black Market stores and an inline performance at Soma. The company expects 2017 same-store sales to decline in the “mid single-digit” percentage range, while the FactSet consensus was for a decline of 1.7%. The stock, which was still inactive in premarket trade, has tumbled 23% year to date, while the SPDR S&P Retail ETF has lost 8% and the S&P 500 has gained 7.1%.

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