Category: Stock Market News

Coca-Cola Co.’s stock slumped 2.3% in morning trade, making it the biggest percentage decliner among Dow Jones Industrial Average components, after the beverage giant met fourth-quarter earnings expectations but provided a downbeat outlook for 2017. Revenue beat expectations, but reported revenue of $9.41 billion was the lowest quarterly total reported since the third quarter of 2009. Analyst Stephen Powers at UBS reiterated his buy rating on Coke, but expressed concern that growth seen during the quarter was “wholly pricing and mix driven,” as concentrate volumes fell. Wells Fargo analyst Bonnie Herzog said she remained “cautious” on Coke, with a rating of market perform, given the outlook for “minimal” profit growth through 2018. The stock has now lost 5.2% over the past 12 months, while the SPDR Consumer Staples Select Sector ETF has gained 7.4% and the Dow has rallied 25.8%.

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Standard & Poor’s on Thursday downgraded Neiman Marcus by three notches to CCC-plus from B-minus, moving it deep into junk territory, saying its poor operating performance in recent quarters has weakened its credit metrics. The outlook is negative, meaning the agency could downgrade again in the medium term. “Trends such as weak mall traffic, highly promotional retail apparel environment, and cautious consumer spending continue to weigh heavily on Neiman Marcus’ operating performance and EBITDA,” said credit analyst Helena Song. “We believe these meaningful industry headwinds, both secular and cyclical, will likely hinder meaningful EBITDA recovery, and as such we project adjusted leverage in the low 10x range and interest coverage in the high-1x area over the coming year.” The negative outlook offers a one-in-three chance it could downgrade again over the next year or so, it said. Fitch Ratings said in January that it expects the retail sector to replace oil and gas as the most distressed sector in 2017, forecasting the retail-only default rate will jump to as high as 9% in 2017 from its current 1% trailing 12-month level.

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Data from the U.S. Energy Information Administration showed that supplies of natural gas fell by 152 billion cubic feet for the week ended Feb. 3. That was in line with the decline of 151 billion expected by analyst polled by S&P Global Platts. Total stocks now stand at 2.559 trillion cubic feet, down 325 billion cubic feet from a year ago, but 45 billion cubic feet above the five-year average, the government said. The data included “reclassification” from working gas, which is available to the market, to base gas, which is not. That resulted in a decrease for working gas stocks of about 5 billion cubic feet in the Pacific region, the EIA said. March natural gas rose 1.4 cents, or 0.5%, from Wednesday’s settlement to $3.14 per million British thermal units. It traded at $3.169 before the data.

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United Parcel Service Inc. said it’s raising its quarterly dividend to 83 cents a share. The company’s last quarterly dividend paid on Nov. 30 was 78 cents a share. The new dividend is payable March 8 to shareholders of record as of Feb. 21. UPS shares were up 0.8% in early trade and have gained 10% in the last 12 months, while the S&P 500 has gained 24%.

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Acorda Therapeutics Inc. shares surged 9.0% in early morning trade after the company said its drug showed an improvement in motor function for patients with Parkinson’s disease in a late-stage clinical trial. The drug, CVT-301 is inhalable and was tested during “off” periods, or when patients aren’t responding as well to medication. The phase 3 trial enrolled 339 participants, with two dose levels of the drug and a placebo arm. The study had 11 serious adverse effects total, including three in the placebo arm of the trial, and one patient committed suicide, which was judged not to be related to the drug, the company said. Acorda shares have surged 11.3% over the last three months, compared with a 6.3% rise in the S&P 500 .

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U.S. stocks opened modestly higher on Thursday, with the Nasdaq inching toward its third-straight record, after a spate of strong earnings reports helped lift the broader market. The S&P 500 index gained two points, or 0.1%, to 2,296.63. The Dow Jones Industrial Average climbed 26 points, or 0.1%, to 20,081. The Nasdaq Composite Index advanced three points, or 0.1%, to 5,686. Viacom Inc. rose after beating earnings and revenue forecasts, while Coca-Cola shares retreated after profits met expectations but its outlook fell short. CVS Health Corp. shares jumped after beating earnings and revenue forecasts. Dunkin’ Brands Group Inc. rose after posting a fourth-quarter profit. Twitter Inc. shares slipped after posting lackluster quarterly results.

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Gannett Co. Inc. shares rose nearly 9% in premarket trade on Thursday after the USA Today owner reported fourth-quarter earnings that were better than Wall Street had forecast. Gannett posted net income of $24.6 million, or 21 cents per share, improved compared with last year’s $20.4 million, or 17 cents during the same quarter a year ago. Adjusted per-share earnings for the quarter were 50 cents, well above FactSet’s 39 cents consensus. Revenue for the quarter hit $867.0 million, up from $739.3 million in the year-earlier period, and above FactSet’s consensus of $849.0 million. Gannett’s print advertising and circulation demand continued to decline in the quarter, with print advertising revenue at USA Today falling 15.3% in the US and 14.2% in the U.K. Gannett shares are down more than 41% in the trailing 12-month period, while the S&P 500 Index is up nearly 24%.

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Kellogg Co. shares are up 1% in Thursday premarket trading after the food company reported fourth-quarter earnings that beat estimates. Kellogg had a net loss of $53 million, or a loss of 15 cents per share, compared with a loss of $41 million, or 12 cents per share, for the same period last year. Adjusted EPS was 92 cents per share, beating the 85-cent FactSet consensus. The EPS decline was driven mainly by a charge for deconsolidating its Venezuela subsidiary, the company said. Sales for the quarter were $3.10 billion, down from $3.14 billion, but ahead of the $3.07 billion FactSet estimate. Kellogg also announced that it will eliminate its Kellogg direct store delivery selling and distribution system, which will affect about 60% of the U.S. Snacks segment. That portion of the snacks business will move to the retailer warehouse distribution system, which is used for the rest of the U.S. snacks business and all other North America businesses. The transition will be primarily executed in the second and third quarters. Kellogg sees a 2017 sales decline of 2% on a currency-neutral basis. Kellogg shares are up 3% for the past year, while the S&P 500 index is up nearly 24% for the last 12 months.

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American Airlines Group Inc. reported Thursday that January travel demand declined slightly from a year ago despite an increase in seat supply. Traffic slipped 0.3% to 17.0 billion revenue passenger miles, while capacity increased 1.2% to 21.7 billion available seat miles. That pushed the load factor down to 78.6% from 79.7%. Domestically, traffic fell 1.7% to 9.66 billion RPMs, while capacity increased 0.8% to 12.04 billion ASMs, to knock load factor down to 80.2% from 82.3%. The air carrier affirmed its first-quarter outlook of total revenue per available seat mile (TRASM) growth of 2.5% to 4.5%. The stock, which was still inactive in premarket trade, has rallied 24% over the past 12 months, while the NYSE Arca Airline Index has soared 43% and the S&P 500 has climbed 24%.

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Tempur Sealy International Inc. said Thursday it has adopted a stockholder rights plan, a tactic often used by companies to stave off a hostile takeover. The news comes just weeks after the mattress company’s stock suffered its biggest one-day selloff in nearly nine years on the news that it had terminated all contracts with major customer Mattress Firm. That came after Mattress Firm and its South African owner Steinhoff International demanded significant changes to supply agreements. With its stock so low, Tempur Sealy could become a target for an interested buyer. Under the rights plan, the company is distributing one right for each outstanding share as a dividend on Feb. 20. The company said the plan “is intended to protect Tempur Sealy and its stockholders from the actions of third parties that the Board of Directors determines are not in the best interests of Tempur Sealy and its stockholders, and to enable all stockholders to realize the long-term value of their investment in Tempur Sealy.” Shares were slightly higher in premarket trade, but have lost 20% in the last 12 months, while the S&P 500 has gained 24%.

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