Category: Stock Market News

Williams Cos. said late Monday it would increase its dividend by 50% to 30 cents a share, payable March 2017, adding it would target a 10%-15% annual growth “over the next several years.” In the same statement, Williams Partners LP said it was reducing its quarterly distribution for the quarter ending March 31 to 60 cent per unit, a 30% cut. The companies also announced a plan to increase Williams Cos. ownership of Williams Partners to 72%, and that Williams Cos. expects to buy additional units of Williams Partners in a private placement, funding such purchases with equity. Shares of Williams, an energy company primarily focused on natural gas processing and transportation, had ended the day down 1.5%.

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Barracuda Networks Inc. shares rallied in the extended session Monday after the cloud-computing company topped Wall Street estimates for the fiscal third quarter. Barracuda shares surged 7.2% to $25.47 after hours. The company reported adjusted third-quarter earnings of 22 cents a share on revenue of $88.8 million. Analysts surveyed by FactSet had forecast earnings of 14 cents a share on revenue of $86.6 million. Barracuda said gross billings increased 13% to $100.4 million from the year-ago quarter, and that its number of active subscribers grew 15% to 309,000.

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Consumer credit expanded at a seasonally adjusted annual rate of 7.9%, or $24.6 billion, in November, the Federal Reserve reported. Revolving credit like credit cards jumped 13.5% while nonrevolving credit such as car and student loans rose 5.9%.

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Oil futures fell Monday, with prices touching new session lows minutes before the settlement to finish at their lowest level in just over three weeks. Data from Baker Hughes released Friday revealed that the number of active U.S. oil rigs rose for a tenth straight week, pointing to the potential for further gains in U.S. crude production. The news fed concerns over the possibility of output increases from other producers, such as Libya, who are also not part of the Organization of the Petroleum Exporting Countries’ production cut agreement. February West Texas Intermediate crude fell $2.03, or 3.8%, to settle at $51.96 a barrel-the lowest finish since Dec. 16, according to FactSet data.

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Gold futures climbed Monday to end at their highest level in almost six weeks. Uncertainty surrounding the pace of the Federal Reserve’s interest-rate increases contributed to the weakness in the U.S. dollar, providing support for gold, which is traded in the greenback. February gold tacked on $11.50, or about 1%, to settle at $1,184.90 an ounce. That was the highest finish since Nov. 29, according to FactSet data.

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The economy should expand at a moderate pace around 2% next year but expectations of higher growth are likely unrealistic, said Atlanta Fed President Dennis Lockhart on Monday. “The economy today is well positioned for moderate growth and steadily improving conditions,” Lockhart said in a speech to the Rotary Club of Atlanta. “It’s less certain that the economy is positioned for a breakout to markedly higher growth on a sustained basis,” he said. The Atlanta Fed president said many investors seem to be anticipating improved growth prospects with the change of administration in Washington. He said he was not factoring fiscal stimulus into his forecast because of the lack of specifics. To get a breakout, policy would have to be designed to offset demographic drags and accelerate productivity, he said. Lockhart is retiring at the end of February after ten years at the helm of the Atlanta regional Fed bank.

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Chip stocks are set up for a big rally in 2017, with the PHLX Semiconductor Index soaring more than 35%, as the industry expected to grow faster than the global economy for the first time since the late 1990s, according to analyst John Pitzer at Credit Suisse. His base-case 12-month target for the chip index (SOX) is 1,000, which is 8.6% above current levels, but he sees upside to 1,250 over the next 12 months, which is 36% above current levels. Pitzer said he expects the SOX to retest its 2000 peak of 1,362 over the next 18-to-24 months, which is 48% above current levels. Despite rising barriers to entry, slowing supply growth, continued industry consolidation and diversifying demand drivers, Pitzer said the sector still trades at a 20% to 25% discount to the S&P 500 , by his calculation. “We continue to argue that semiconductors are the safest and cheapest way to play what we have described as the data growth paradigm in technology,” Pitzer wrote in a note to clients. As part of his industry call, Pitzer upgraded Texas Instruments Inc. to outperform from neutral and Brooks Automation Inc. to neutral from underperform, while downgrading Rudolph Technologies Inc. to neutral from outperform. The SOX, which climbed 1.4% in midday trade, has rocketed 53% over the past 12 months, while the S&P 500 has gained 18%.

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The stocks of Coca-Cola Co. and Procter & Gamble Co. , both components of the Dow Jones Industrial Average , both slumped about 1% in morning trade Monday, after Goldman Sachs analysts turned bearish on the consumer staples giants. Analyst Judy Hong downgraded Coke to sell, after being at neutral for over three years, citing expectations of that 2017 sales will grow slower than the global non-alcoholic beverage market, and the belief the dollar’s strength could restrain earnings growth. She cut her stock price target to $39, which is 5.8% below current levels, from $41. Analyst Jason English downgraded P&G to sell, after also being at neutral for over three years, citing concerns over valuation and that sales growth may have peaked. He cut his stock price target to $77, which is 8.7% below current levels, from $86. English said P&G’s price-to-earnings ratio of 21.6 is near a decade high, and at a 10% premium to the company’s home and personal care peers. P&G’s stock has run up 11% over the past 12 months, while Coke shares have lost 0.4%, the SPDR Consumer Staples Select Sector ETF has tacked on 5.5% and the Dow has surged 22%.

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The U.S. Energy Department on Monday announced that it plans to sell up to 8 million barrels of crude oil from the Strategic Petroleum Reserve. The oil will come from three of the SPR storage sites, with up to 3 million coming from the Bryan Mound site near Freeport, Texas. Bids must be received no later than 2 p.m. Central time on Jan. 17, and contracts will be awarded to by the end of January, the Energy Department said. Prices for West Texas Intermediate crude were already trading sharply lower when the announcement was made. February WTI crude traded at $52.64 a barrel, down $1.35, or 2.5%.

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Stocks opened in negative territory on Monday as investors looked ahead to the start of corporate earnings season. The S&P 500 index slipped 2 points, or 0.1%, to 2,275, while the Dow Jones Industrial Average retreated 37 points, or 0.2%, to 19,925. Meanwhile, the Nasdaq Composite Index gained four points, or 0.1%, to 5,525. Earnings season kicks off later this week with reports from J.P. Morgan Chase and Bank of America Corp. . Shares of Merrimack Pharmaceuticals Inc. shot higher in early trade after the company said Sunday it will sell its oncology assets. McDonald’s Corp. rose after the company signed a deal to sell a controlling stake in its China unit to an investor group led by one of China’s biggest state-owned companies, Citic Ltd.

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