Category: Stock Market News

Fiat Chrysler Automobiles NV said Tuesday it is working to clarify issues related to diesel emissions technology stemming from a U.S. Justice Department complaint filed earlier Tuesday. The company is reviewing the complaint and it is “disappointed” that the department chose to file the lawsuit, Fiat Chrysler said in the statement. “The company intends to defend itself vigorously, particularly against any claims that the company engaged in any deliberate scheme to install defeat devices to cheat U.S. emissions tests,” it said. Fiat Chrysler last week announced it had developed updated emissions software calibrations that it believed addressed concerns from federal and California regulators, it said. The company has formally filed for diesel emissions certification for its 2017 model year Jeep Grand Cherokee and Ram 1500 diesel vehicles, it said. Subject to the permission from regulators, Fiat Chrysler plans to install the same modified emissions software in 2014-2016 Jeep Grand Cherokee and Ram 1500 diesel vehicles, the company said. “FCA US believes this will address the agencies’ concerns regarding the emissions software calibrations in those vehicles,” it said. Shares of Fiat Chrysler fell 3.4%.

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Uber Technologies Inc. owes New York City drivers millions of dollars, after the company incorrectly calculated the commission it takes from fares, The Wall Street Journal reported Tuesday. Uber typically takes a 25% commission from fares and incorrectly calculated the amount before taking sales tax and an injury compensation fund fee into consideration. The Wall Street Journal reported that Uber would refund drivers about $900 each, which includes the original amount plus interest. The Wall Street Journal calculated that the mistake would cost Uber at least $45 million, based on the 50,000 drivers in the New York Independent Drivers Guild.

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Shares of grain trader Bunge Ltd. jumped 16% Tuesday, after The Wall Street Journal said the company has been approached by commodities giant Glencore Plc for a possible takeover. It’s unclear whether talks have advanced and no deal may materialize, but if one is agreed it would be large, said the paper. Bunge has a $10 billion market value, including debt, while its enterprise value is about $15 billion. Bunge shares have gained 12% in 2017, while the S&P 500 has gained 7%.

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Shares of Herbalife Ltd. slumped 5.2% in afternoon trade Tuesday, pulling back from a more than 3-year closing high in the previous session, amid reports that the nutritional supplements company’s president of China operations was suddenly removed. The company was not immediately available for comment. China Securities Journal reported, based on a Google translation, that Herbalife China President Li Yanliang was removed after a decade in charge. The report said the removal was “sudden,” as Herbalife’s first-quarter report released late on May 4 showed that China-region sales grew the fastest at 17%, compared with the worldwide total growth of 1%. Through Monday, the stock had run up 18% since May 4 to close Monday at the highest level since Jan. 22, 2014. The stock has now soared 44% year to date, while the S&P 500 has gained 7.1%.

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Shares of “Grand Auto Theft” maker Take-Two Interactive Software Inc. rallied 4% Tuesday, after better-than-expected earnings offset the bad news of a delay in the release of a much-anticipated new video game. “Although we are disappointed Red Dead Redemption 2 is getting pushed out to FY19, we are pleasantly surprised to see an EPS guidance for FY18 that looks to be about $1.40-$1.65, which is what we had thought management would use for its initial view with RDR2,” MKM Partners analyst Eric Handler wrote in a note. MKM rates Take-Two as buy, with a stock price target of $80, equal to 11% above current trading levels. Handler welcomed the company’s bigger-than-expected revenue for its fiscal fourth quarter. Take-Two shares have gained 46% in 2017, while the S&P 500 has gained 7%.

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Shares of Nokia Corp. jumped 5.1% toward a 16-month high in midday trade Tuesday, as investors cheered the news that the Finland-based network infrastructure company said it would receive and upfront cash payment and additional payments from Apple Inc. as part of the settlements of lawsuits against each other. The deal allows Apple to resume selling Nokia’s digital health products in Apple stores. Canaccord Genuity analyst T. Michael Walkley raised his stock price target on Nokia to $7.00 from $5.50. Since the settlement came much sooner than his expectation that it would take “well into 2018,” he added back about 250 million euro worth ($280.2 million) of licensing revenue from Apple into his estimates for 2018, leading to the higher stock price target. Walkley said the settlement also removes 100 million euro ($112.1 million) in annual legal costs. Nokia’s stock, which has run up 35% year to date, was on track for the highest close since Jan. 29, 2016. In comparison, Apple’s stock has rallied 33% year to date, while the Dow Jones Industrial Average has gained 6.0%.

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The S&P 500 on Tuesday has reclaimed its level prior to last week’s broad unraveling of U.S. equity-index benchmarks on Wednesday. The S&P 500 index intraday move put it recently at 2,400.86, up 0.3%, compared with a close of 2,400.67 last Tuesday, highlighting relative resilience for the stock market that was roiled by negative headlines about the White House less than a week ago. The Dow Jones Industrial Average was trading up 0.2% at 20,941, while the Nasdaq Composite Index climbed 0.2% at 6,142. Tuesday’s trade puts the broad-market S&P 500 just about two points shy of record close and five points short of an intraday all-time high. The Dow is still about 50 points from its pre-collapse level, while the Nasdaq is about 25 points short of Tuesday’s close. The three benchmarks are shooting for their fourth straight session of gains–their longest win streaks since late February, according to FactSet data.

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Alexion Pharmaceuticals Inc. shares dropped 9.2% to $104.89 in very active morning trade Tuesday after the company announced departures of its chief commercial officer, chief financial officer and two executive vice presidents. The company just appointed a new chief executive officer, Ludwig Hantson, in late March, and CFO Dave Anderson started at the company in December. “These changes appear to be the plan of the recently appointed new CEO, Ludwig Hantson, and we believe signal his intention to make a complete break with the company’s past leadership,” said Leerink analyst Geoffrey Porges, adding that after the shake-up, “none of the management team that built the Soliris business, or presided over the value-destroying Synageva deal in 2015, remain in place…These changes are not a complete surprise, given the signals that have been coming from new CEO, but will alarm many investors given the concern that there may be other ‘shoes to drop’ in terms of disclosure of additional underlying issues with the core business and operations.” Still, Porges reiterated an outperform rating for Alexion. Two executives, CCO Carsten Thiel and Executive Vice President, Chief Human Resources Officer Clare Carmichael, will be leaving the company “to pursue new opportunities” starting June 1, the company said. Thiel will be replaced by Brian Goff, who has worked in biopharma for more than 25 years at companies including Johnson & Johnson and Baxter . CFO Anderson will resign at the end of August and Executive Vice President, Head of Research & Development Martin Mackay will be retiring at the end of this year, the company said, with searches underway for the open positions and a new head of human resources. Alexion shares have dropped 19.8% over the last three months, compared with a 1.5% rise in the S&P 500 .

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Wal-Mart Stores Inc. said Tuesday that it was planning investments in Florida through January 2018 that will create 800 jobs with the opening of nine new stores across the state. The discount retail giant said it also plans to announce in the coming months the official grand opening of its e-commerce distribution center in Davenport, which currently employs over 550 people and has plans to hire at least 1,000 more people over the next year. Separately, the company confirmed plans to begin construction of a new distribution center for perishable goods in Cocoa, which is expected to employ more than 450 people when operational. The stock, which was up 0.4% in midday trade, has climbed 14% year to date, while the SPDR Consumer Staples Select Sector ETF has gained 8.0% and the Dow Jones Industrial Average has advanced 5.9%.

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Oil service stocks took a hit Tuesday, highlighted by the 4.3% selloff in Helmerich & Payne Inc. shares , after Goldman Sachs soured on the sector’s valuations amid concerns that rig count growth will “flatten out” over the next few years. Analyst Waqar Syed cut H&P’s rating to sell from neutral, and slashed his stock price target to $45, which is 21.5% below current levels, from $63. Syed said he believes rig count growth should plateau, after more than doubling over the past year, given budget constraints for exploration and production companies, the fact that pressure pumping capacity isn’t keeping pace at which wells are being drilled and because of improving well productivity. As a result, Syed cut his stock price target on Nabors Industries Ltd. to $15.25 from $17.50, Halliburton Co. to $56 from $61, Schlumberger Ltd. to $87 from $90 and Weatherford International Ltd. to $5 from $6.50. The VanEck Vectors Oil Services ETF fell 0.5% in morning trade and has tumbled 17% year to date, while the S&P 500 was up 0.1% on Tuesday, and has gained 7.1% so far this year.

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