Chesapeake Energy rallies, poised for second session of strong gains

Chesapeake Energy Corp. shares climbed Monday, extending gains for a second session, after the the company announced a 15% cut in its workforce last week. The move comes as Chesapeake seeks to reduce expenses on continued weakness in oil and natural-gas prices. Shares of Chesapeake rose 4.4% to $8.24 but the stock is off 58% year to date.

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FireEye’s stock tumbles after Piper Jaffray cuts rating, price target

FireEye Inc.’s stock tumbled 6.8% in morning trade Monday, putting it on track to close at a nine-month low, after the cyber security company was downgraded at Piper Jaffray because of concerns over increasing competition. Analyst Andrew Nowinski lowered his rating to neutral, after being at overweight since starting coverage 14 months ago. He slashed his stock price target to $37, or 20% above current levels, from $60. He said besides competition, he’s also worried about conflicts within the sales channel and recent executive turnover. “The primary reason we are downgrading shares to neutral is our belief that competition has increased for FireEye, whereby the top four firewall vendors (about 48% of the total firewall market) now have their own ‘sandbox’ technology,” Nowinski wrote in a note to clients. “Moreover, the current valuation leaves little room for error if any of the aforementioned issues slow revenue growth.” The stock has tumbled 36% over the past three months, while the S&P 500 has lost 5%.

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Micron extends gains in wake of better-than-expected earnings

Micron Technology Inc. shares rallied Monday, poised for a second session of strong gains, after reporting better-than-expected quarterly results last week. The chip maker posted fiscal fourth-quarter earnings of 37 cents a share, ahead of the 31-cent a share forecast by analysts in a FactSet survey. Shares of Micron surged 8.8% to $17.30 following a 7.7% gain on Friday. For the year, the stock is down 51%.

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Toll Brothers’ stock gets a boost from an analyst upgrade

Toll Brothers Inc.’s stock surged 3% in morning trade Monday, after the home builder was upgraded at Susquehanna Financial, which cited valuation and upbeat earnings outlook for next year. Analyst Jack Micenko raised his rating to positive, after being at neutral for 2 1/2 years, and lifted his stock price target by $1 to $42, which is 17% above current levels. Micenko said he believes that results from Toll Brothers’ California and City Living businesses are being underappreciated by Wall Street analysts, and that consensus estimates for gross margins in 2016 are “too low.” He raised his 2016 earnings-per-share estimate to $3.04 from $2.81, compared with the FactSet EPS consensus of $2.70. “Builder stocks tend to react favorably to better than expected gross margins,” Micenko wrote in a note to clients. The stock has lost 6.6% over the past three months, while the S&P 500 has slipped 4.9%.

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Sling TV adds college sports to live Internet TV offerings

Dish Network Corp.’s live and on demand Internet TV service Sling TV, said Monday it’s adding to its live sports offerings. Sling TV said in a news release it will launch “Campus Insiders,” which will give subscribers access to hundreds of live college sporting events, including football, basketball, baseball, volleyball and soccer from the Mountain West Conference, Patriot League, West Coast Conference and Central Intercollegiate Athletic Association. The new offering will air college football’s inaugural NOVA Home Loans Arizona Bowl. Campus Insiders is available on all Sling TV supported devices, including Amazon.com Inc. Fire and Google Inc. Chromecast devices, as part of the $5 per month “Sports Extra” pack for subscribers of Sling TV’s “Best of Live TV” package. Sling TV’s $20 a month live TV package has more than 20 channels, including Walt Disney Co.’s ESPN, ABC and Disney Channel and AMC Networks Inc. . Shares of Dish are down more than 18% in the year to date, while the S&P is down 4%.

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ISM services index slows to below-forecast 56.9% reading

WASHINGTON (MarketWatch) — A measure of the services side of the economy slowed in September to a below-forecast reading that was the lowest in three months. The Institute for Supply Management said its services index fell to 56.9% from 59% in August, which was below the 57.5% MarketWatch-compiled economist forecast. The report suggests that it’s not just issues like the energy price collapse, the dollar’s strength and China’s weakness which are impacting the domestic economy. “Recent economic turmoil has caused sales to drop. We feel that this will be only temporary if the stock market returns to normal,” said one purchasing manager in the retail trade field. That said, any reading above 50% indicates improving conditions.

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Outlook for U.S. apparel and footwear industry is weaker as dollar strength dents earnings: Moody’s

The outlook for the U.S. apparel and footwear industry has deteriorated thanks to the strong dollar, which is denting earnings and sales, Moody’s Investors Service said Monday. “While the hedges taken this year will partially protect margins, the strong US dollar will continue to have negative foreign currency translation effects on the industry’s gross profits for the rest of this year,” Scott Tuhy, a Moody’s senior credit officer said in a statement. “The strong dollar has discouraged spending by tourists to the United States, impacting sales at brands such as Ralph Lauren and Calvin Klein, dragging on apparel sales.” The outlook for the overall sector has been revised down to stable from positive, said Moody’s. The rating agency is now expecting operating income growth to weaken to 3% to 5% in 2016 from 5% to 7% in 2015. The industry will find it difficult to raise prices to offset higher costs, which could shave about 40 basis points off margins next year, said the statement.

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Apple’s stock falls, bucking broad market gains, after Citigroup cuts iPhone sales outlook

Apple Inc.’s stock dropped 1% in morning trade, despite gains in the broad market and technology sector, after Citigroup analyst Jim Suva cut its iPhone sales estimate and said he expected other sell-side analysts to do the same. Meanwhile, the Dow Jones Industrial Average was up 158 points and the SPDR Technology ETF climbed 0.7%. Suva cut his fiscal fourth quarter iPhone unit sales estimate to 47 million from 48 million, and shifting the cut units to the fiscal first quarter. Suva said he made that cut because although iPhone 6S and iPhone 6S Plus sales of 13 million units beat expectations, Apple said that only Friday and Saturday sales would be counted in fourth-quarter results. “We expect Apple shares to see continued volatility in the near term,” Suva wrote in a note to clients, given near-term investor focus on iPhone sales. He reiterated his buy rating and stock price target of $145, which is 33% above current levels, because he sees potential for upside to gross margin estimates, which could eventually become the focus for investors. Apple’s stock has lost 13% over the past three months, while the Dow has slipped 6.2% and the XLK has eased 3.3%.

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Wendy’s CEO Emil Brolick to retire

Wendy’s Company said Chief Financial Officer Todd Penegor will succeed Chief Executive Emil Brolick when he retires in May 2016. Brolick has been CEO since Sept. 2011 and was previously with the company between 1988 and 2000. He will continue on the board of directors after his retirement. The transition is set to begin during the first quarter of 2016. Penegor has been with the company since June 2013 serving as CFO since Dec. 2014. He was with Kellogg Co. between 2000 and 2013, where he was president of U.S. snacks between 2009 and 2013. An external search for a new CFO is currently underway. Wendy’s is down 19% for the past three months. The NASDAQ Composite is down 5.3% for the same period.

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Why the Twitter Board chose a part-time CEO

Twitter Inc. said Monday that the board chose to make Jack Dorsey its chief executive officer, despite previously declaring it only wanted a CEO who could make a full-time commitment, because of how he was able to run both Twitter and Square while acting as interim CEO. The appointment of Adam Bain as chief operating officer also helped with the decision. Shares of Twitter were up 2.5% Monday.

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