Tag: stock market

WASHINGTON (MarketWatch) – The Federal Reserve on Wednesday said “economic growth slowed” since its last meeting in December and that inflation is unlikely to rise rapidly toward its 2% target, a more dovish tone that suggests the bank won’t be quick to raise interest rates again. “Inflation is expected to remain low in the near term,” The Fed said in new, more cautious language. The central bank also alluded to stock market turmoil in the U.S. and China, saying it “is closely monitoring global economic and financial developments.” Yet despite a more subdued near-term outlook, the Fed said it expects the economy to continue to grow “at a moderate pace,” helped by a strengthening labor market. The vote was 10-0.

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DeVry Education Group Inc. shares tumbled 17% Wednesday, after the Federal Trade Commission said it is bringing an enforcement action against the for-profit education company. The FTC said it has a filed a suit against DeVry, alleging that it deceived students with promises they would find jobs that would pay more than they would earn with degrees from other colleges. “Educational institutions like DeVry owe prospective students the truth about their graduates’ success finding employment in their field of study and the income they can earn,” FTC Chairwoman Edith Ramirez said in a statement. The FTC said DeVry claimed that 90% of its graduates land jobs within six months of completing their studies, and that they earned 15% more on average than others. Shares have fallen 55% in the last 12 months, while the S&P 500 has lost about 7%.

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Russia’s state-owned oil pipeline company Transneft said Russia and the Organization of the Petroleum Exporting Countries will discuss possible oil output cuts, Reuters reported Wednesday, citing Russian news agency TASS. Prices for oil had already turned higher in the wake a U.S. report that showed a hefty weekly increase in crude supplies, but also revealed a fall in domestic oil production. March West Texas Intermediate crude was up 93 cents, or 3%, at $32.38 a barrel on the New York Mercantile Exchange. March Brent on the ICE Futures exchange added $1.18, or 3.7%, to $32.98 a barrel.

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Boeing Co.’s stock was on track Wednesday to suffer the biggest-ever one-day price drop in the aerospace giant’s 44-year history as a public company, in the wake of a disappointing 2016 profit outlook. The stock plunged $12.36, or 9.7%, in morning trade, on course for the lowest close since October 2013. That price drop is shaving about 85 points off the price of the Dow Jones Industrial Average , which was down 131 points. The stock’s percentage decline would be the biggest since October 2001, according to FactSet data. Analyst Robert Stallard at RBC Capital wrote in a note to clients that although he doesn’t believe Boeing’s downbeat outlook will change the company’s current plans to return cash to shareholders, “it could create doubt” as to the sustainability of those plans. He said the plans don’t include any impact for an downturn in the aerospace market, “if this should occur at some point before the end of this decade.”

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American Airlines Group was upgraded to buy from neutral at UBS on expectations that passenger revenue will increase on an improving balance between supply and demand during the first half of 2016. Still, the bank lowered the company’s price target to $46 from $48 based on a valuation multiple that the bank said “remains down near historical trough level.” Analysts said American Airlines will be one of the biggest beneficiaries of slower industry capacity growth. Travel demand will remain largely stable while the decelerating growth in the number of seats available where American flies will be high. The airline has been underperforming the industry on passenger revenue, with a market forecast of a 5% to 7% first-quarter decline at American, UBS wrote in a Wednesday note. American announces fourth-quarter 2015 earnings on Jan. 29 and first-quarter 2016 earnings on Apr. 22. UBS expects passenger revenue to decline in the 3% to 5% range in the first quarter and improve in the second quarter. Shares are up 0.8% in morning trading, but down 24.2% for the past 12 months. The S&P 500 is down 6.6% for the same period.

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The U.S. Energy Information Administration reported on Wednesday that crude inventories climbed by 8.4 million barrels for the week ended Jan. 22. The American Petroleum Institute on Tuesday reported an 11.4 million-barrel increase, according to sources. Analysts polled by Platts expected crude supplies to be up 3.5 million barrels. Gasoline supplies rose by 3.5 million barrels, while distillate stockpiles fell by 4.1 million barrels last week, according to the EIA. March crude was at $30.97 a barrel on the New York Mercantile Exchange, down 48 cents, or 1.5%. Prices traded at $30.69 before the data.

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Herbalife Ltd. said Wednesday it has hired a lobbyist to manage its relationship with state and local governments. The nutritional products company said Tyrone Bland is joining its corporate affairs team as vice president of state and local government relations. Bland was previously a managing partner at Porter Tellus LLC. Herbalife has famously been embroiled in a battle with Pershing Square Capital Management LP’s William Ackman, who has accused the company of operating a pyramid scheme. The activist investor has a billion dollar short position on the stock, or a bet that it would fall. Herbalife has denied the accusations, and its stock soared 66% in 2015.

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Caterpillar Inc.’s stock slumped 1% in morning trade Wednesday, after the agricultural equipment maker reported sharp declines in machine sales in December. On a rolling three-month period through December, total worldwide machine sales fell 16% from a year ago, led by 38% decline in Latin America and a 21% drop in Asia/Pacific. Within the energy and transportation segment, total sales fell tumbled 32%, led by a 58% plunge in transportation products and a 29% plummet in oil & gas products. The stock has dropped 17% over the past three months, while the Dow Jones Industrial Average has lost 8.6%.

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U.S. stocks opened lower on Wednesday tracking a renewed rout in oil prices amid a flurry of weaker-than-expected earnings reports. Shares of Apple Inc. and Boeing Inc. tumbled after posting earnings that disappointed. The S&P 500 opened 7 points, or 0.4%, lower at 1,896. The Dow Jones Industrial Average lost 115 points, or 0.7%, to 16,056. Meanwhile, the Nasdaq Composite began the day down 24 points, or 0.5%, at 4,543.

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AmeriQuest, Inc., a financial services company, said Wednesday that it was postponing its $74 million initial public offering due to “volatile market conditions.” The company was expected to price Tuesday. With the initial public offering, the company said it would offer 6.15 million shares at an expected price range of $11 to $13 to raise $74 million. So far this year, no companies have gone public. Nordic Realty Trust, Inc. is expected to price its initial public offering Wednesday, and after initially postponing the pricing, Shimmick Construction Company Inc. may price this week.

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