Category: Stock Market News

Oil prices turned a bit lower Wednesday after data from the U.S. Energy Information Administration showed that domestic crude supplies fell by 900,000 barrels for the week ended April 28. That was well below the 4.2 million-barrel drop reported by the American Petroleum Institute late Tuesday, according to sources. Analysts polled by S&P Global Platts forecast a larger decline of 2.25 million barrels. Gasoline stockpiles edged up by 200,000 barrels, while distillate stockpiles were down 600,000 barrels last week, according to the EIA. The S&P Global Platts survey had forecast modest increases for both products. June crude fell 13 cents, or 0.3%, to $47.53 a barrel on the New York Mercantile Exchange. It traded at $48.89 before the supply data. [Updated to correct forecasts for crude products.]

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S&P Global downgraded Guitar Center’s rating to CCC-plus from B-minus on Wednesday and said the company has underperformed its expectations. The biggest retailer of musical instruments in the world is unlikely to improve its credit metrics meaningfully ahead of early 2019 debt maturities and its capital structure is unsustainable given thin EBITDA interest coverage, high leverage and weak cash flow, the agency said in a statement. The outlook is negative, meaning S&P could downgrade the rating again in the medium term. “The downgrade reflects our view that strategic operating initiatives will be insufficient to meaningfully improve revenue and profits ahead of looming sizable debt maturities in early 2019, especially in light of a challenging retail environment that we expect to continue,” said credit analyst Samantha Stone. The company has $615 million of 6.5% notes that mature in April of 2019, that were last trading at 83 cents on the dollar, according to MarketAxess. Guitar Center has a total debt burden of $1.6 billion, taken on as part of an $2.1 billion LBO by Mitt Romney’s former private-equity firm Bain Capital in 2007. Moody’s Investors Service earlier this month revised the outlook on its B2 rating on the retailer to negative.

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Facebook Inc. CEO Mark Zuckerberg announced Wednesday that the company will hire 3,000 people globally to its community operations team to monitor posts that are flagged by the community as being inappropriate. The team will nearly double from 4,500 today. In a post on Facebook, Zuckerberg said it was responding to a number of incidents of people hurting themselves – and others – live on Facebook in videos. “We need to respond quickly,” he said. This follows a number of incidents on Facebook in recent months and the spread of fake news on the website. Earlier this month, a man in Cleveland shot a stranger and streamed it live on Facebook, prompting outcry and pledges from Facebook to do more to address the issue. Shares of Facebook fell 0.5% to $152 in morning trade. They’ve gained 16% in the past three months and nearly 30% in the past year, outperforming the S&P 500 , up 4% and 16%, respectively.

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TV streaming platform Hulu, jointly owned by Walt Disney Co. , 21st Century Fox Inc. , Comcast Corp. and Time Warner Inc. , said during its advertising Upfront on Wednesday it’s launching its live TV service and at the same time adding channels from Scripps Networks Interactive Inc. to the service. Hulu Chief Executive Mike Hopkins said during the company’s presentation in New York that the deal with Scripps gives Hulu live and on-demand access to the HGTV, Food Network and Travel Channel when Hulu’s live streaming service launches in beta on Wednesday. Scripps joins Fox, Disney, NBCUniversal, CBS, Turner Networks and A&E Networks in providing channels to Hulu’s live service. Live TV streaming platforms have increasingly become a focus in the landscape with companies competing to meet viewers where they are by giving them the content they want most — live TV has been the last bastion of broadcast and cable TV. Hulu’s live TV service, at $40 per month, joins offerings like Sling TV from Dish Network Corp. , DirecTV Now from AT&T Inc. and even Google Inc.’s YouTube TV.

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U.S. stocks fell in early trading on Wednesday, a day after Apple Inc. reported disappointing revenue and gave a sales forecast that was below expectations. The Dow Jones Industrial Average fell 44 points, or 0.2%, to 20,906. The S&P 500 lost 7 points to 2,384, a decline of 0.3%. The Nasdaq Composite Index slid 22 points to 6,073, a drop of 0.4%. The tech-heavy Nasdaq was particularly pressured by Apple , the largest U.S. company by market capitalization, which fell 1.5%. Trading is expected to be subdued as investors await a closely watched policy update from the Federal Reserve, which will be released at 2 p.m. Eastern. While the Fed is expected to keep rates on hold, investors will scrutinize the accompanying statement for clues about the pace of future rate increases.

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Shares of Akamai Technologies Inc. tumbled 13% in premarket trade Wednesday, after the content delivery service’s disappointing revenue outlook, amid continued weakness in its media business, prompted analyst downgrades. The stock was on track to open at a 6 1/2-month low. The company reported late Tuesday first-quarter earnings and revenue that beat expectations, but said on a conference call after the results that current-quarter revenue was expected to be $597 million to $609 million, which was below the FactSet consensus of $623 million at the end of April. Analyst Greg Miller at SunTrust Robinson Humphrey downgraded Akamai to hold from buy and slashed his stock price target to $54 from $82. “Accordingly, even with security outperforming, we believe headwinds and lack of visibility prevent us from continuing to recommend the stock,” Miller wrote in a note to clients. D.A. Davidson analyst Mark Kelleher cut his rating to neutral from buy, saying weak outlook contradicted his previous belief that its core media business was growing rapidly. He cut his stock price target to $57 from $76. The stock had lost 6.3% year to date through Tuesday, while the S&P 500 has gained 6.8%.

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General Mills Inc. said Wednesday that the board elected Jeff Hermening chief executive officer of the company, effective June 1. Hermening will also serve on the company’s board. He succeeds Jen Powell, who has been CEO since 2007. He will continue as chairman until his retirement, which is expected within the next year. Harmening has been with the company for 23 years, most recently serving as chief operating officer, a title he held since July 1, 2016. General Mills shares are up 0.3% in premarket trading, but down 9.5% for the year to date. The S&P 500 index is up 6.8% for 2017 so far.

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The New York Times Co. shares gained 3.5% in premarket trade on Wednesday after the media company reported improved first-quarter earnings that were better than Wall Street expected. Net income for the quarter came in at $13.18 million, or 8 cents per share, that’s after a loss of $8.27 million, or 5 cents during the same period a year ago. Adjusted earnings were 11 cents per share, above the FactSet consensus of 7 cents. Revenue for the quarter hit $398.80 million, compared with $379.52 million in the year-earlier period. FactSet had forecast revenue would hit $382.00 million. The New York Times saw circulation revenue increase 11.2%, while advertising revenue fell 6.9%. The company said revenue from print advertising was down 17.9% in the quarter while digital advertising revenue rose 18.9%. Digital advertising accounted for 38.2% of the company’s total advertising revenue. “These results show the current strength and future potential of our digital strategy not just to reach a large audience, but also to deliver substantial revenue,” said New York Times Chief Executive Mark Thompson in a statement. “Despite continued pressure on print advertising, we were able to grow overall revenues by 5% in the quarter.” The New York Times said it expects digital-only subscriptions to slow compared to previous quarters and it expects total advertising revenue to decrease in the low- to mid-single digits. Shares of the New York Times Co. have increased 7.5% in the year so far and 14.9% over the course of the last 12 months. By comparison, the S&P 500 index has gained 6.8% in the year to date and 15.9% in the prior 12 months.

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WASHINGTON (MarketWatch) – The Treasury Department said Wednesday it is conducting an “internal review” of the possibility of issuing ultralong bonds with maturities greater than 30-years. In a statement, the department said it was meeting with “a broad variety of market participants” to assess the costs and benefits of the bonds with 50-year and 100-year maturities. Following the review, Treasury said it will provide an update on the potential for ultra-long issuance, but did not provide a specific timetable. Treasury Secretary Steve Mnuchin said earlier this week that ultralong bonds “could absolutely make sense.”

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Shares of Groupon fell 10% in premarket trade Wednesday after the company reported a decline in sales that fell widely short of expectations. The company reported a loss of $24.4 million, or 4 cents a share, compared with a year-earlier loss of $49.1 million, or 8 cents a share. Excluding one-time items, Groupon reported non-GAAP earnings of a penny a share, ahead of the one-cent loss analysts on average surveyed by FactSet had been expecting. Revenue for the period fell 3% to $673.6 million from $698.4 million in the year-earlier period, widely missing the consensus view of $722 million. The company added 500,000 new customers in North America, bringing total active customers in North America to 31.6 million, and 48.3 million customers globally. The daily deals site reiterated its full-year gross profit guidance in the range of $1.3 billion and $1.35 billion. As of Tuesday’s close, shares of Groupon had been up 14% in the past three months and 18% in the past year. The S&P 500 is up 4% and 16%, respectively. This was Groupon’s first sales miss in five quarters.

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