Category: Stock Market News

U.S. stocks opened with slight losses on Tuesday, as investors closely watched the tense situations with North Korea and Syria, which could drive sentiment in coming days. The Dow Jones Industrial Average dipped 0.2% to 20,630. The S&P 500 lost 0.2% to 2,352. The Nasdaq Composite Index fell 0.2% to 5,871. Major indexes are within a few percentage points of their all-time highs, hit last month, but investors are looking for new catalysts to push shares decisively higher from here. In addition to political issues, market participants are looking ahead to the upcoming earnings season, which could determine whether the multimonth rally in stocks will be justified by corporate America’s economic activity. The worst performing sector of the day was financials, which dropped 0.4%, and utilities, which shed 0.7%. Among the most active stocks on the day, United Continental Holdings Inc. dropped 2% as the airline continued to deal with the fallout of having a passenger forcibly dragged off a plane.

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Shares of Cytori Therapeutics Inc. plunged 34% toward a record low in early-morning Tuesday, after the developer of burn treatments priced a stock offering at a deep discount. The pricing comes a day after the stock soared 26% as the company received Food and Drug Administration approval for its burn clinical trial. Earlier Tuesday, the company said it priced an public offering of 8.6 million common shares at $1.10 each, which is 36% below Monday’s closing price of $1.72, and be below its previous record closing price of $1.36 hit on Dec. 28, 2016. With 23.6 million shares outstanding through Monday, according to FactSet, the offering would increase the shares outstanding by 36.5%. The company expects gross proceeds of $9.5 million from the offering, which it plans to use for working capital. The stock has tumbled 25% year to date, while the S&P 500 has gained 5%.

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Loews Corp. said Tuesday it will buy plastic packaging maker Consolidated Container Company for $1.2 billion from Bain Capital Private Equity. The deal is expected to close in the second quarter, and will be funded with about 50% cash on hand, and 5% debt at Consolidated Container (CCC). “We have been analyzing the packaging industry for some time because it fits our key acquisition criteria: It is a fragmented industry that generates strong cash flows and we believe it is unlikely to be subject to major technological disruption,” said Loews Chief Executive James Tisch. Bain had acquired CCC from Vestar Capital Partners in 2012 for an undisclosed amount. Loews’s three publicly-traded subsidiaries are CNA Financial Corp. , Diamond Offshore Drilling Inc. and Boardwalk Pipeline Partners LP (BWP), and a private subsidiary, Loews Hotels & Co. Loews’s stock, which was still inactive in premarket trade, has gained 1.4% year to date while the S&P 500 has tacked on 5.3%.

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Shares of American Airlines Group Inc. climbed 1.1% in premarket trade Tuesday, after the air carrier raised its first-quarter outlook for a key traffic metric. Capacity for the month declined 0.9% from a year ago to 23.0 billion available seat miles, while traffic fell 1.2% to 18.8 billion revenue passenger miles. Load factor slipped to 81.5% from 81.7% a year ago. The company raised its guidance for first-quarter total revenue per available seat miles (TRASM) to an increase of 2% to 4% from a previous outlook of up 1.5% to 3.5%. American Airlines lifted its outlook for adjusted pre-tax margin to 4% to 6% from 3% to 5%. The stock has tumbled 9.4% year to date through Monday, while the NYSE Arca Airline Index has eased 0.2% and the S&P 500 has gained 5.3%.

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Laptop Magazine said Apple Inc. has fallen from its top position on its 10 best and worst brands ranking for 2017 to fifth place, after the iPhone maker drew “modest” review scores. The publication evaluates the 10 biggest laptop brands and decides which offer the best combination of quality, innovation, support, design and value. “Because of its modest review scores, expensive products and lack of ports, Apple fell all the way down to fifth place after receiving top honors every year since the Best and Worst Brands debuted in 2010,” the magazine wrote. Lenovo took top spot, followed by Asus, Dell and HP . Apple tied with Acer for fifth place on the list. Lenovo “leaped into first place on the strength of its many highly-rated laptops, groundbreaking technologies and vastly improved customer support,” the magazine wrote. Apple shares were flat in premarket trade, but have gained 24% in 2017, while the Dow Jones Industrial Average has gained 4.5%.

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Starbucks Corp. said Tuesday that it will offer an insurance plan for the parents of eligible full-time workers in mainland China that covers critical illness. The Starbucks China Parent Care Program will extend to more than 10,000 parents, the company said. Parents must be below the age of 75 to qualify, and other conditions may apply. The program will cover the treatment of 30 common critical illnesses among the elderly in China. The Starbucks Caring Unites Partners Fund launched in China in 2010, which provides financial assistance to workers during times of hardship, and found that more than 70% are concerned with their parents’ health. Single workers, who make up 80% of the staffers in China, are concerned about their ability to cover long-term care costs. Starbucks has more than 2,600 stores across 127 cities and nearly 40,000 employees in China. Starbucks shares are inactive in premarket trading, and are up 4.4% for the year so far.

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Shares of online business reviewer Yelp Inc. climbed 2.6% in premarket trade Tuesday, after Pacific Crest upgraded the stock to the equivalent of buy and said it has an “underappreciated core franchise.” Analysts led by Brad Erickson said competitive concerns about Yelp’s relevance are overdone, “while self-serve’s ease and utility are underappreciated.” Self-serve is a tool that allows businesses drive their own advertising. The analysts said his channel checks suggest that Yelp is insulated from Google and delivering value to its customers. The company is well positioned to attract a part of the more than $60 billion in local ad spending that is shifting online, he said. Erickson raised his 2017 and 2018 revenue estimates. Shares are down 14% in 2017, while the S&P 500 has gained 5%.

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United Airlines parent United Continental Holdings Inc.’s stock price target was raised at Cowen & Co., which cited upbeat traffic data, but made no mention of the incident over the weekend in which a passenger was dragged off a plane. The air carrier reported late Monday March traffic that rose 3%, while load factor declined slightly. Analyst Helane Becker raised her first-quarter earnings-per-share estimate to 42 cents from 24 cents, compared with the FactSet consensus of 35 cents. Becker said that while capacity increased more than expected, it was because of a better completion factor. “We expect the company to guide to sequential improvement in unit revenue from 1Q17 to 2Q17,” Becker wrote in a note to clients. The stock, which slumped 2.4% in premarket trade, has lost 1.9% year to date through Monday, while the NYSE Arca Airline Index has eased 0.2% and the S&P 500 has gained 5.3%.

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Conyers Park Acquisition Corp. and Atkins Nutritionals Inc. have agreed to merge and create a new holding company called The Simply Good Foods Co. with an enterprise value of about $856 million. Atkins is owned by affiliates of private-equity firm Roark Capital Group. The new entity will be listed on the Nasdaq under the ticker symbol “SMPL”. The deal will be funded using a mixture of cash, stock and debt. Atkins owners will receive $730 million in total, including 10.3 million shares of Simply Good Foods valued at $10 a share. Conyers Park has $402.5 million in cash in its trust account, as well as commitments for $100 million stock private placement at $10 a share. The deal is expected to close in June. Conyers shares were halted premarket, but have gained 2% in 2017, while the S&P 500 has gained 5%.

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Supervalu Inc. said late Monday it will acquire grocery distributor Unified Grocers for $114 million. Under the agreement, approved by both company boards, Supervalu will also assume and pay off $261 million in United Grocer debt. The companies expect the deal to close in the mid-to-late summer. Shares of Supervalu rose 2.6% to $3.89 after hours.

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