Category: Stock Market News

Private-equity firm Legion Capital Corp. said Wednesday it has filed for an initial public offering. The company is planning to offer 4 million shares at $1.25 a pop. The firm is led by J. Bradley Hilton, grandson of hotelier Conrad Hilton, who has worked in private equity and venture capital since leaving Hilton Hotels just before its sale to Blackstone for just under $27 billion, the company said in a release. Hilton is joining venture capital executive and corporate attorney James Byrd and marketer Shane Hackett in Legion Capital, which uses crowdfunding and other new capital formation methods. Legion is planning to list its shares on the Nasdaq. It will use the proceeds of the IPO to grow its businesses and fund acquisitions.

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Ford Motor Co. confirmed Wednesday it plans to reduce 10% of its workforce costs in North America and Asia Pacific this year, through early retirement and special separation packages. “Full details about the voluntary packages and how the program will work will be communicated with employees in early June,” Ford said in an emailed statement to MarketWatch. The auto maker said it expects 1,400 salaried positions to be affected by the end of September, as part of its plan to reduce costs and becoming as “lean as efficient as possible.” The company said most skill teams in North American and Asia Pacific will be affected, with the exception of product development and Ford Credit, plant manufacturing, information technology and global data and analytics. Ford’s Europe and South America operations aren’t affected because they have already completed job cuts or have them under way. The Wall Street Journal had reported earlier this week, citing people briefed on the plan, that Ford was planning to slash its global workforce by 10%. The stock, which slipped 0.4% in premarket trade, has dropped 9.8% year to date through Tuesday, while the S&P 500 had gained 7.2%.

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American Eagle Outfitters Inc. shares fell 3.6% Wednesday, after the company reported weaker-than-expected profit for the first quarter and offered an outlook that lagged estimates. The teen apparel retailer said it net income of $25.2 million, or 14 cents a share, in the first quarter, down from $40.5 million, or 22 cents a share, in the year-earlier period. Adjusted per-share earnings came to 16 cents, a penny below the FactSet consensus of 17 cents. Revenue rose to $761.8 million from $749.4 million, above the FactSet consensus of $742 million. Same-store sales rose 2%, topping the FactSet consensus for a decline of 1.4%. “The first quarter results reflected mall traffic headwinds, especially early in the quarter, with improved trends over Easter and a strong digital business throughout,” Chief Executive Jay Schottenstein said in a statement. The company is now expecting same-store sales to range from flat to down in the low single digits. EPS is expected to range from 15 cents to 17 cents. The FactSet consensus is for second-quarter same-store sales to grow 0.5% and for EPS of 23 cents. Shares have fallen 15% in 2017, while the S&P 500 has gained 7%.

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Ralph Lauren Corp. said Wednesday that it has named Patrice Louvet chief executive, effective July 17. He will also be appointed to the board. Louvet will report to Ralph Lauren, who is executive chairman of the board and chief creative officer. Louvet succeeds Stefan Larsson, who stepped down from the CEO position in February. Louvet was most recently group president of global beauty at Procter & Gamble Co. , a division with 12 brands. He has more than 25 years of experience with that company. Ralph Lauren shares are down 0.6% in premarket trading, and down 18.1% for the year to date. The S&P 500 index is up 7.2% for 2017 so far.

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Qualcomm Inc. said Wednesday it has sued the four manufacturers of all Apple Inc. iPhones and iPads for breaching their license agreements and refusing to pay for using Qualcomm’s licensed technologies. The complaint, filed in the U.S. District Court for the Southern District of California, seeks an order requiring the defendants to comply with their contractual obligations to Qualcomm, as well as damages. The manufacturers being sued are FIH Mobile Ltd. and Hon Hai Precision Industry Co., together known as Foxconn, Pegatron Corp., Wistron Corp. and Compal Electronics Inc. Qualcomm said the manufacturers have started refusing to pay royalties on Apple products they produce, not because they are disputing their contractual obligations, but because they said they must follow Apple’s instructions not to pay. “It is unfortunate that we must take this action against these long-time licensees to enforce our agreements, but we cannot allow these manufacturers and Apple to use our valuable intellectual property without paying the fair and reasonable royalties to which they have agreed,” said Qualcomm General Counsel of Qualcomm. Apple’s stock slipped 0.5% in premarket trade, while Qualcomm shares fell 1.1%. Year to date, shares of Apple have run up 34%, Qualcomm has dropped 14% and the S&P 500 has gained 7.2%.

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Salix Pharmaceuticals Inc. and its parent Valeant Pharmaceuticals International Inc. and Actavis Laboratories Inc., at Actavis’ request, have agreed to stay outstanding litigation regarding Actavis’ application for approval of a generic version of Xifaxan, a treatment for irritable bowel syndrome. The parties have also agreed to extend the 30-month stay on the litigation, which was brought by Valeant against Actavis on March 23, 2016. Valeant said it also filed a Citizen Petition with the U.S. Food and Drug Administration in October, seeking changes to previously recommended standards for approval of generic versions of Xifaxan, Valeant’s best-selling drug, and one that has chalked up annual sales of $1 billion in the past. A Citizen Petition is a process that enables drug companies and individuals to seek changes in FDA health policy. “On March 16, 2017, the FDA answered the Citizen Petition and issued its revised draft guidance regarding the recommended standards for approval of ANDAs for generic versions of Xifaxan,” Valeant said in a statement. Legal action is now stayed through April of 2018 and cannot be lifted before October 31 of 2017, said the statement. “Valeant remains confident in the strength of the Xifaxan patents and will defend its intellectual property vigorously,” said the statement. Valeant shares fell 1.3% in premarket trade, and have fallen 3% in 2017 so far, while the S&P 500 has gained 7%.

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Chelsea Manning, the soldier serving time for leaking thousands of diplomatic cables and military files to Wikileaks, has been released from prison Wednesday morning after serving seven years of a 35-year sentence. A U.S. Army spokesperson confirmed Manning’s release to the BBC and other media outlets. Manning, who was born Bradley Manning, had been housed in Fort Leavenworth military prison in Kansas. Most of what remained of her longer sentence was commuted in January by then-President Barack Obama. Manning was convicted of 20 charges in connection with the leaks, including espionage. She was acquitted of the most serious charge, aiding the enemy. “For the first time, I can see a future for myself as Chelsea,” she said in a statement last week ahead of her release. “I can imagine surviving and living as the person who I am and can finally be in the outside world.”

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Johnson & Johnson said Wednesday that it, along with its Janssen Pharmaceutical Companies, plans to file for regulatory approval 10 new potential blockbuster drugs between this year and 2021. The company said it also plans more than 50 line extensions of existing and new medicines through 2021. “With a growing core business of differentiated medicines and a strong line-up of innovative products expected to launch or file over the next five years, we are leading the industry in advancing the health of patients around the world,” said J&J Chief Executive Alex Gorsky. The company is hosting an analyst meeting on Wednesday. The stock, which was still inactive in premarket trade, has rallied 11% year to date, while the SPDR S&P Pharmaceuticals ETF has climbed 8.5% and the Dow Jones Industrial Average has advanced 6.2%.

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China has installed rocket launchers on a disputed reef in the South China Sea in action it says is to ward off Vietnamese military combat divers, Reuters reported, citing a state-run defense publication. China, which has continued a military build-up on the islands it says it controls, has insisted this course is part of necessary defensive requirements. The U.S. has criticized what it has called China’s over militarization of its maritime outposts. Fiery Cross Reef is administered by China but also claimed by the Philippines, Vietnam and Taiwan.

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U.S. stock futures fell on Wednesday as doubts grew over whether U.S. President Donald Trump can push forward with his pro-agenda. Weakness for equities, seen in Asia as well, came after The New York Times reported that Trump asked former Federal Bureau of Investigation Director James Comey to stop his investigation into former National Security Adviser Michael Flynn, citing a memo from Comey. Dow Jones Industrial Average futures fell 95 points, or 0.5%, to 20,840, while S&P 500 futures dropped 12.6 points, or 0.45%, to 2,384.50. Nasdaq 100 futures fell 24.5 points, or 0.4%, to 5,699.75. Perceived haven assets rose, with gold up $6.20, or 0.5%, to $1,242.60 an ounce, and with the Japanese yen up to ¥112.54, from ¥113.01 late Tuesday. The dollar slumped Tuesday against major rivals, with the ICE Dollar Index dropping to its lowest level since the day after the U.S. presidential election. The Dollar Index weakened further to 97.99 on Wednesday. “What investors are worried about is that the impeachment could take place over in the U.S. as the odds are showing more than 50 percent for such an event after the New York Times released its article,” said Naeem Aslam, chief market analyst at Think Markets. “If such scenario does become a reality, we could literally say good bye to Trump’s reflation trade.”

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