Category: Stock Market News

Alphabet Inc. was initiated with an overweight rating and $1,030 stock price target Friday at Pacific Crest Securities. Analyst Andy Hargreaves said Alphabet’s current valuation underestimates the sustainability of Google’s search and YouTube businesses. He believes YouTube could launch a multichannel video programming service in 2017. Shares of Alphabet rose 0.5% to $828.03 in premarket trade. They’ve risen 0.3% in the past three months and 15% in the past year. The S&P 500 , meanwhile, is up 6% in the past three months and 22% in the past year. The average rating on the stock is the equivalent to buy, while the average price target is $960.59, according to a survey of roughly 30 analysts surveyed by FactSet.

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U.S. stocks opened higher Friday as investors largely avoided big bets ahead of Donald Trump’s inauguration as the nation’s 45th president. The main indexes were on track to end the week with modest losses, however. The S&P 500 opened up 8 points, or 0.3%, at 2,271. The Nasdaq Composite began the session up 21 points, or 0.4% higher, at 5,562. The Dow Jones Industrial Average added 76 points, or 0.4%, to 19,809 at the open.

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Keane Group Inc. , an oil-field services company, priced its initial public offering at the high end of its range Thursday night. Keane priced its offering at $19 a share and will be selling 15.7 million shares, while its selling stockholder, Cerberus Capital Management LP, will be selling 11.06 million shares. Keane will not receive proceeds from the shares sold by the stockholder. Shares are expected to start trading on the New York Stock Exchange Friday under the symbol “FRAC.”

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The U.S. video game industry generated $30.4 billion in revenue in 2016, according to new data from the Entertainment Software Association and NPD Group. Sales include everything from hardware, software, peripherals and in-game purchases and 2016’s gross is just above the $30.2 billion generated in 2015. Consumer spending on console platforms, such as Sony Corp.’s PlayStation 4 and Microsoft Corp.’s XBox One, was driven by Activision Blizzard Inc.’s “Call of Duty: Infinite Warfare,” Electronic Arts Inc.’s “Battlefield 1” and Take-Two Interactive Software Inc.’s “NBA 2K17.” NPD Group pointed out the Pokemon craze that re-upped in 2016 with the Pokemon Go mobile game and release of Pokemon Sun and Moon, which garnered the highest launch month consumer spend in the history of the franchise, according to a news release. “Growth in entertainment software consumer spend was seen across the mobile, PC, virtual reality, subscription, portable and digital console segments,” NPD Group industry analyst Mat Piscatella said in a statement. “Consumers have more options to purchase and enjoy entertainment software than ever before, while developers have more and easier ways to delivering that content. No matter the delivery platform, entertainment software has never been more engaging, diverse or accessible.”

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Grayscale Investments has filed to list its Bitcoin Investment Trust on the New York Stock Exchange in a $500 million initial public offering, according to documents submitted to the Securities and Exchange Commission on Friday. Shares of the trust, which presently trades over the counter, have been trading at a premium to the bitcoin price. The trust, which back in 2013 and exclusively invests in bitcoin, is one of the only options available to institutional investors wishing to gain exposure to the currency. The Bank of New York Mellon will serve as the transfer agent for shares of the fund, and Xapo Inc., a bitcoin wallet and vault company, will serve as custodian of the trust’s bitcoins. The application comes as the SEC is mulling whether to approve two proposed bitcoin exchange-traded funds. If approved, they would be the first ETFs exclusively focused on bitcoin.

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Johnson & Johnson’s Ethicon Endo-Surgery said early Friday it has acquired privately-held medical device maker Megadyne Medical Products Inc. The company did not detail the deal’s financial terms. Megadyne makes electrosurgical tools used in operating rooms, and will complement Ethicon’s advanced energy devices, the company said. Electrosurgical devices are used in nearly four out of every five surgeries, according to Ethicon. Johnson & Johnson shares have slumped 0.6% over the last three months, compared with a 5.7% rise in the S&P 500 .

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As it stands, Netflix Inc. is properly valued, according to analysts at Citi. The global streaming company had one of its best quarters to date on Wednesday, reaching an intraday high after posting domestic and international subscriber gains that were better than expected. Lead Citi analyst Mark May raised his 12-month price target on the stock to $145 from $120, which is nearly 5% above Thursday’s closing price, but he maintained his neutral rating. “While we are positive on Netflix’s long-term positioning and the growth of OTT video, we believe shares are pricing in the company’s opportunities both in the U.S. and internationally,” May wrote in a note to clients. For further outperformance, investors would need to ascribe “far more value” to the new international markets where Netflix has launched, where execution in unproven, according to May. Netflix shares are up more than 28% in the trailing 12-month period, outperforming the S&P 500 Index , which is up nearly 22% during the same time frame.

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American International Group Inc. said Friday it has entered an adverse development reinsurance agreement with a unit of Warren Buffett’s Berkshire Hathaway Inc. . The agreement, which allows the insured party to shift the timing of losses that have already occurred, as well as ones incurred but not yet reported, to the insurer in return for a premium, covers 80% of AIG’s U.S. commercial long-tail exposures for 2015 and before, including the biggest part of AIG’s casualty exposures during that period. AIG will pay a premium of $9.8 billion by June 30, with interest set at 4% a year from Jan. 1, 2016 to date of payment. Berkshire unit National Indemnity Company is assuming 80% of the net losses and net allocated loss adjustment costs on the subject reserves in excess of the first $25 billion. The unit’s overall limit of liability is $20 billion. AIG is currently completing its fourth-quarter reserve review and will publish it with its year-end earnings. The company is expecting a material prior year adverse development charge for the fourth quarter. AIG shares were not yet active premarket, but have gained 20% in the last 12 months, while the S&P 500 has gained about 21%.

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Ford Motor Co. disclosed Friday that it will record a pre-tax $3 billion loss in 2016 related to remeasurement of its pensions plans and other postretirement benefit (OPEB) plans, as lower discount rates offset asset gains. Of the total, $900 million of the loss is associated with its U.S. pension plans, $1.9 billion is with pension plans outside of the U.S and $200 million is with OPEB plans globally. Including the remeasurement loss, the auto maker expects its the underfunded status of its pension plans to increase to $8.9 billion a year-end 2016 from $8.2 billion in 2015, and of its OPEB plans to rise to $5.9 billion from $5.7 billion. Ford said the loss will cut its 2016 after-tax net income by about $2 billion, but it still expects to meet its guidance of $10.2 billion in adjusted pre-tax profit. The stock, which was unchanged in premarket trade, has gained 4.5% over the past 12 months, while the S&P 500 has rallied 22%.

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Bristol-Myers Squibb Co. shares sunk 7.2% in pre-market trade Friday after the company said it wouldn’t try for accelerated approval in first-line lung cancer for its combination of Opdivo and Yervoy. The company said the decision was made “based on a review of the data available at this time,” and said it would say no more “in order to protect the integrity of ongoing registrational studies.” Leerink analyst Seamus Fernandez said the development was a “clear setback for BMY,” especially given a fall approval by rival drugmaker Merck in first-line lung cancer. The combination of Opdivo and Yervoy is seen by many as Bristol’s best approach to lung cancer, and the company has four clinical trials underway. “Regardless of the data used to inform this update, it is obvious that it did not meet the threshold for a filing and BMY confirmed to us that MRK’s surprise filing did not influence this decision,” Fernandez said. Bristol shares have risen 10.2% over the last three months, compared with a 5.7% rise in the S&P 500 .

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