Category: Stock Market News

Oil futures were up slightly Friday after data showed the number of U.S. oil rigs rose again this week. The U.S. oil rig count rose by 10 to 662 this week, oilfield services firm Baker Hughes reported Friday. The oil-rig count has risen every week this year but one. West Texas Intermediate crude for May delivery on the New York Mercantile Exchange was up 8 cents, or 0.2%, at $50.43 a barrel, little changed from its level ahead of the data. Oil is on track for a 5% weekly climb but is down nearly 7% for the month, weighed by concerns over rising U.S. output and uncertainty over the durability of an agreement by other major producers to curb production.

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Soybean futures fell Friday, poised for a their lowest settlement since October after the U.S. Department of Agriculture said prospective plantings of the crop are likely to reach a record this year. Soybean planted area for 2017 is estimated at a record high of 89.5 million acres, up 7% from last year, according to the USDA’s Prospective Plantings report. The report showed that farmers are “signaling their intentions to plant more soybean acres than ever before,” said Sal Gilbertie, president and chief investment officer at Teucrium Trading LLC. “But those new soybean acres are being added at the expense of corn acres, which is sending corn prices higher by more than 1% post report,” he said. Gilbertie also noted that wheat farmers “intend to plant the lowest number of wheat acres,” based on records from the USDA. May soybeans traded at $9.505 a bushel in Chicago, down 1.3%. Prices have been trading around a five-month low for the past week. May corn was at $3.64 a bushel, up 1.9%. May wheat rose 2.2% to $4.30 a bushel.

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Shares of Biogen Inc. rose Friday, while Forward Pharma A/S shares were halted after falling almost 20%, after Biogen was reported to have won a patent ruling. The U.S. Patent Office ruled in favor of Biogen in a patent interference proceeding related to its multiple sclerosis drug Tecfidera, according to Evercore ISI analyst Umer Raffat. Biogen paid Forward Pharma $1.25 billion in February related to the patent that covers ways of treating MS patients. Raffat said Biogen would have been on the hook for royalty payments of about $300 million annually starting in 2021, if it had lost the patent ruling. Biogen shares were up 1.2% Friday, but have gained just 4% year-to-date, while the S&P 500 has gained almost 6%.

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Car rental stocks got a shot in the arm Friday, when MKM Partners said negative sentiment on the sector has swung too far. MKM analysts listed four factors to support its thesis, including what it called a “major disconnect” between car rental and other travel stocks as its relates to expectations for travel trends. Travel stocks, such has hotels, timeshare, cruise and airline stocks, have gained since the November presidential election, on expectations that corporate travel is set for a rebound. Hotel stocks, for example, have climbed 28% since the election, while car rental stocks have slumped. MKM further believes used car fundamentals are better than the market is assuming, noting January and February are always tough months to extrapolate fleet cost changes because volumes are low and this year, tax refunds have been delayed. Avis Budget Group Inc. stock is currently trading at a free cash flow yield of close to 20% and historically, 16% is a good entry point, the analysts wrote. And pricing trends are set to reach an inflection point in April and set up well for the summer period. Avis shares were up 0.1%, after falling nearly 20% in the year to date. Hertz Global Holdings Inc. rose 1.5%, after a 17% decline in the year so far. The S&P 500 has gained about 6% year-to-date.

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Apple Inc.’s stock inched up 0.1% in morning trade Friday, to sit just below of Wednesday’s record close of $144.12, after Canaccord Genuity boosted its price target, given his optimism regarding the technology giant’s upcoming iPhone 8. Analyst Michael Walkley, who rates the stock a buy, raised his price target to $165, which is about 15% above current levels, from $154. “Given our expectations for compelling new features and form factors for the iPhone 8 products, we are raising our estimates given our expectations for stronger upgrade sales to the loyal iPhone consumer base,” Walkley wrote in a note to clients. “We also believe the impressive installed base should drive strong iPhone replacement sales and earnings, as well as cash flow generation to fund strong long-term capital returns.” The iPhone is expected to be released in September. Apple shares have soared 24% year to date, while the Dow Jones Industrial Average has tacked on 4.7%.

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Shares of Amazon.com Inc. rallied 1.1% toward a third-straight record high, and fifth-straight gain, after a Loop Capital issued a bullish research note on the e-commerce giant. The stock has now run up 4.8% this week, and over 18% so far this year, while the technology-heavy Nasdaq 100 Index has climbed 12% year to date and the S&P 500 has gained 5.7%. Analyst Blake Harper at Loop Capital initiated coverage of Amazon at buy, on the belief Amazon will continue to be the market-leading online retailer and cloud-based services provider. He set his stock price target of $1,100, which is 24% above current levels, and the third highest of the 46 analysts surveyed by FactSet. “We view the company as a giant optimization engine for physical and digital distribution, with an innovation philosophy that should enable it to succeed in multiple new markets,” Harper wrote in a note to clients. “We expect the cloud business–Amazon Web Services (AWS)–to be spun off in the future, with a potential value of over $200 billion.”

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AT&T Inc.’s focus on unlimited data plans appears to have hurt first-quarter results more than previously expected, said analyst Jeffrey Kvaal at Instinet, who responded by trimming his stock price target and his 2017 earnings forecasts. Kvaal said the elimination of overage fees, combined with more promotional activity, has lowered the average-revenue-per-user (ARPU) trajectory for the company, as well as its rivals. He cut his stock price target to $45 from $46 and his 2017 adjusted EPS estimate to $2.92 from $2.98. The FactSet EPS consensus is $2.94. “We believe AT&T is aggressively pushing unlimited. With the elimination of overage fees and plan optimization, service revenue will most likely not return to growth until 4Q at the earliest,” Kvaal wrote in a research note. He kept AT&T’s rating at buy, however, saying he preferred the company to its peers given its “relatively lesser exposure to wireless.” AT&T’s stock edged up 0.1% in morning trade, while shares of Verizon Communications Inc. slipped 0.1% and of T-Mobile US Inc. and of Spring Corp. were little changed. The S&P 500 eased 0.1%.

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U.S. stocks opened slightly lower on Friday, as investors found few reasons to keep pushing shares higher following an extended rally that has taken major equities to repeated records, including a record close for the Nasdaq on Thursday. The Dow Jones Industrial Average fell 0.2% to 20,689. The S&P 500 dropped 0.2% to 2,364. The Nasdaq Composite Index lost 0.2% to 5,904. All three are set for solid gains for the first quarter, and the Dow is on track to post its sixth straight quarterly gain, the longest such streak since 2006. However, the blue-chip average, unlike the S&P 500 and the Nasdaq, will post a weekly decline at current levels. Among the most active stocks, BlackBerry Ltd. gained 8.5% after giving a positive outlook.

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Goldman Sachs downgraded Diageo Plc stock to sell from neutral on Friday, and said it expects slowing U.S. spirits growth and pricing pressure to rein in growth. In the last three months, U.S. spirits value growth has slowed to 3% from 5% in the 2016 calendar year, analysts wrote in a note. While some of the factors behind the slowdown may be temporary ones, such as delayed tax refunds, price/mix has been slowing since late 2015, they wrote. “Diageo’s price/mix appears to have followed a similar path (now below the market) and yet it has underperformed US growth by 250 basis points (3m average),” said the note. “With the US forming 31% of fiscal 2016 sales, we believe Diageo’s medium-term target of mid-single-digit organic sales growth will be difficult to achieve (GSe: 2.6%, FY17-19), despite better global scotch and emerging market growth.” Diageo shares were down about 1% in London but are up 8% in the year so far. The FTSE 100 has gained 3% in the year to date and the S&P 500 has gained almost 6%.

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Verizon Communications Inc. said Friday it is changing its operating structure to focus on three areas, media and telematics, network and technology and customer and product operations. As part of the new structure, the telecoms company is hiring former Ericsson Chief Executive Hans Vestberg as executive vice president for the network and technology team. He will initially be based in Sweden and report to Verizon CEO Lowell McAdam. Marni Walden is EVP for media and telematics and John Stratton will head up customer and product operations. The media and telematics business will house the assets of Yahoo, giving Verizon more than 1.3 billion digital media users, generating $7 billion of revenue. The structure “will give us greater organizational agility to continue to lead the market with our wireless and fiber services, scale and expand our media and telematics businesses, and maintain the leadership in network reliability and new technology that is a Verizon trademark,” said McAdam. Shares were flat premarket, but are down 8% in the year so far, while the S&P 500 has gained almost 6%.

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