Category: Stock Market News

Shares of J.C. Penney Co. Inc. dropped 1.1% in premarket trade Monday, after the department store chain was downgraded at R.W. Baird, which cited concerns over earnings growth and valuation. Analyst Mark Altschwager cut his rating to neutral after being at outperform for the past year. He slashed his stock price target to $5, which is 9.9% above Friday’s closing price of $4.55, from $8. Altschwager said he upgraded J.C. Penney last May because he saw a trading opportunity as the company implemented growth initiatives, lowered costs and de-risked the balance under a talented new management team. “We remain encouraged by management’s new direction for J.C. Penney and by success to-date on these initiatives,” Alschwager wrote in a note to clients. “However, topline progress has been neutralized by intensified industry headwinds (Amazon and off-price taking share, channel shift away from brick & mortar, wallet-share-shift away from apparel), leaving earnings growth more dependent on aggressive [cost] cuts…and asset sales…and making any valuation premium to the sector difficult to justify.” The stock has plunged 45% year to date through Friday, while the SPDR S&P Retail ETF has slipped 4.4% and the S&P 500 has gained 6.8%.

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Owens Corning said Monday it has reached an agreement to acquire cellular glass insulation products maker Pittsburgh Corning for $560 million in cash. Owens Corning, which makes insulation, roofing and fiberglass composites, expects the deal to close in the third quarter. The transaction “will further expand Owens Corning’s commercial and industrial product offering and grow our presence in Europe and Asia,” said Julian Francis, president of Owens Corning’s insulation business. Pittsburgh Corning has more than 1,100 employees in 17 countries, and has plants in the U.S., Belgium, Czech Republic and China. Owens Corning shares were not yet active premarket, but have gained 18% in 2017, while the S&P 500 has gained about 7%.

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Thermo Fisher Scientific Inc. said Monday it has agreed to acquire Patheon N.V. for $35 a share, or $7.2 billion including $2 billion of net debt. Thermo Fisher, which offers services to help with research and laboratory productivity, said it expects the deal to be “immediately and significantly” accretive to adjusted per-share earnings, adding 30 cents in the first full year after close. Patheon offers complex development and manufacturing services (CDMO) to biopharmaceutical companies. The combination will give Thermo Fisher a foothold in the high-growth CDMO market, which it estimates is worth about $40 billion. Patheon has about 9,000 employees worldwide and generated 2016 revenue of about $1.9 billion. The deal is expected to close by year-end. Thermo Fisher has committed debt financing from Goldman Sachs and expects to finance the deal with about $5.2 billion of debt and $2 billion of equity. Patheon shares jumped 34% premarket on the news. Thermo Fisher was not yet active, but has gained 22% in 2017, outperforming the S&P 500 , which has gained about 7%.

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Moody’s Corp. said Monday it will buy Dutch business intelligence company Bureau van Dijk for 3 billion euro, or the equivalent of $3.27 billion. Moody’s said the deal, which is expected to close late in the third quarter, will be funded through cash held offshore and new debt financing. Moody’s expects the deal to add to adjusted earnings per share in 2018 and to GAAP EPS in 2019. Bureau van Dijk is currently owned by investment firm EQT. “Bureau van Dijk is a high growth information aggregator and distributor that positions Moody’s at the center of a unique network of global risk data,” said Moody’s CEO Raymond McDaniel. “This acquisition provides significant opportunities for Moody’s Analytics to offer complementary products, create new risk solutions and extend its reach to new and evolving market segments.” Moody’s stock, which was still inactive in premarket trade, has soared 22% year to date while the S&P 500 has gained 6.8%.

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Apple Inc. has acquired Lattice Data Inc., a Silicon Valley company that specializes in machine learning and artificial intelligence, according to a report Saturday by TechCrunch. The deal, which closed a coupe of weeks ago, was worth about $200 million, TechCrunch reported, and about 20 Lattice engineers have been absorbed into the tech giant. Apple issued its typical statement regarding purchases Sunday, saying it “buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans.” Lattice was founded in 2015, and uses its technology to turn “dark data,” such as raw text and images, into more structured, usable information.

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Shares of Avis Budget Group Inc. fell in Friday’s extended session after the rental car company said Chief Financial Officer David Wyshner is leaving to pursue other opportunities. Avis has named Martyn Smith to serve as interim CFO until a permanent successor is appointed. Avis Budget shares dropped 2.1% after hours.

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Progressive Corp. said late Friday its board of directors has authorized the company to buy back up to 25 million of its common shares, replacing a June 2011 program. The new program does not have an expiration date, the insurer said. Shares of Progressive were flat in after-hours trading and ended the regular session down 0.6%.

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David Tepper’s hedge fund Appaloosa L.P. made only a few notable changes to its U.S. equity holdings during the first quarter, while the value of its holdings increased 7.9%, compared with a 5.5% gain in the S&P 500 during the same time. Among the notable changes, Appaloosa sold the entire 5.08 million-share stake it held in J.C. Penney Co. Inc. it had as of Dec. 31, and owned a new 100,000-share stake in Snap Inc. as of March 31. In addition, Tepper nearly tripled his stake in Southwest Airlines Co. to 3.09 million shares, and added a new investment in Symantec Corp. of 1.55 million shares. He added a 534,327-share bet on AK Steel Holding Corp. , while unloading his Arch Coal Inc. holding of 27,178 shares.

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The Dow industrials and S&P 500 both snapped a streak of three weeks of gains Friday, closing lower for the session and week, while the Nasdaq finished higher for a fourth week of gains. President Donald Trump’s firing of FBI Director James Comey, as well as a rough patch of corporate results mostly from retailers, contended with an otherwise strong earnings season. The Dow Jones Industrial Average declined 22.81 points, or 0.1%, to close at 20,896.61, with General Electric Co. and Merck & Co. the largest decliners, for a 0.5% drop on the week. The S&P 500 index fell 3.54 points, or 0.2%, to finish at 2,390.90, with the industrials and financials sectors leading losses. The S&P 500 ended the week down 0.4%. The Nasdaq Composite Index rose 5.27 points, or less than 0.1%, to finish at 6,121.23 for a weekly gain of 0.3%.

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Brooks Brothers, the apparel retailer known for button-down shirts and other professional clothing, says it has recently been alerted to a possible security incident at certain Brooks Brothers and Brooks Brothers outlets in the U.S. and Puerto Rico. Customers who shopped at those stores between April 4, 2016 and March 1, 2017 have been notified, the company said Friday. Brooks Brothers says a forensic investigation indicates that an unauthorized individual installed malicious software that can collect card information on some of the company’s payment processing systems. The company says the issue has been resolved and is no longer impacting transactions. The SPDR S&P Retail ETF is down 1.7% in Friday trading, and down 4.3% for the year so far. The S&P 500 index is down 4.3% for 2017 to date.

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