SEC fines J.P. Morgan for saying advisers not paid on commission

The Securities and Exchange Commission reached a $4 million settlement with J.P. Morgan’s brokerage business based on allegations the bank made false and misleading statements about broker compensation from 2009 to 2012. The SEC said J.P. Morgan falsely stated on its private banking website and in marketing materials that advisers are compensated “based on our clients’ performance; no one is paid on commission.” Compensation was not based on client performance but instead consisted of a salary and a discretionary bonus based on several other factors. It wasn’t until May 2012 – more than three years after it was first made – that the misstatement was corrected by J.P. Morgan in some marketing materials. The bank neither admitted nor denied the allegations.

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Oil prices fall as crude supplies drop, but gasoline stockpiles jump

Oil prices fell below $35 a barrel on Wednesday after the U.S. Energy Information Administration reported that crude supplies dropped, but supplies of gasoline jumped last week. Crude inventories dropped by 5.1 million barrels for the week ended Jan. 1. The American Petroleum Institute on Tuesday reported a 5.6 million-barrel decline, according to sources. Analysts polled by Platts expected supplies to be up 2.75 million barrels. Gasoline supplies dropped 10.6 million barrels, while distillate stockpiles fell 6.3 million barrels last week, according to the EIA. February crude traded at $34.74 a barrel on the New York Mercantile Exchange, down $1.23, or 3.4%. Prices traded at $35 before the data.

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U.S. stocks open sharply lower amid geopolitical worries

U.S. stocks opened sharply lower on Wednesday, with the Dow industrials dropping more than 250 basis points after the opening bell, as geopolitical concerns overseas weighed on risk sentiment. North Korea’s announcement that it had successfully detonated a hydrogen bomb late Tuesday rattled markets, while a continuing retreat in oil prices pulled down the energy sector. The Dow Jones Industrial Average was down 226 points, or 1.3%, to trade at 16,930 after the opening bell, while the S&P 500 index declined 26 points, or 1.3%, to trade at 1,990. Meanwhile, the Nasdaq Composite index dropped 63 points, or 1.3%, to trade at 4,829. The S&P’s energy sector was the worst performer on the index, down 2.3%.

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Chipotle shares sink after it slashes guidance, discloses grand jury subpoena tied to CA norovirus incident

Chipotle Mexican Grill Inc. shares are down 3% in premarket trading after it said it expects a 14.6% decline in same-store sales for the fourth quarter. The company forecast a low-single digit same-store sales increase for 2015 during the third-quarter earnings announcement in October. The company forecasts earnings per share between $1.70 and $1.90 for the fourth quarter in an 8-K filing published Wednesday. The FactSet consensus is for EPS of $2.54. One-time expenses for the quarter will be in the $14 million to $16 million range, including expenses tied to food replacement in select restaurants, lab analysis, and retaining experts, all tied to E. coli and norovirus illness outbreaks in recent months. The company has authorized a stock buyback program totaling $300 million in addition to the $300 million authorized on Dec. 4. A total of $116 million remained available from that previous buyback program as of Dec. 31, 2015. Chipotle also said it received a federal grand jury subpoena requiring it to produce a range of documents tied to a norovirus incident in Simi Valley, CA in Aug. 2015. The company said it’s not yet possible to determine whether it will incur any fines or other liabilities tied to the subpoena. Chipotle stock is down 37% for the past three months while the S&P is up 1.9% for the same period.

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ISIS attacks on Libya oil tanks fuel supply concerns: DJ

Seven oil tanks are on fire in east Libya after a series of attacks by Islamic State, the country’s National Oil Co. said on Wednesday, according to Dow Jones Newswires. The attacks happened in Libya’s eastern oil ports and have raised concerns about the longer-term damage on the country’s oil industry. The incident follows assaults earlier in the week, which have sparked an appeal for help from the National Oil Co. The company said in a statement on its website that it “condemns, in the strongest terms, the vicious attacks on the oil crescent area over the last two days and deplores the loss of life and the damage caused to tanks at Ras Lanuf and Es Sidar.” Oil prices appeared to shake off the news, with Brent oil falling below $35 a barrel to trade at an 11-year low. Crude oil was down 3.8% at $34.61 a barrel.

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Fed’s Fischer: Market expectation of 2 Fed hikes this year is ‘too low’

WASHINGTON (MarketWatch) – The market’s expectation that the Federal Reserve will only raise interest rates twice in 2016 are too low, said Federal Reserve Vice Chairman Stanley Fischer on Wednesday. “We think they’re too low,” Fischer said in an interview with CNBC. The Fed’s own forecast in its “dot plot’ are for four rate hikes this year. Fischer said this was more “in the ballpark.” He added that policy is not on automatic pilot. “We don’t know enough now to know how many [rate hikes] there will be,” Fischer said, because the Fed will have to respond to events.

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Apple reports biggest holiday season for app store

Apple Inc. reported record-breaking sales for the holiday season, with customers spending more than $1.1 billion on apps and in-app purchases. This was the biggest holiday season for the App Store and Jan. 1, 2016 broke the store’s single-day record with customers spending more than $144 million. The most popular purchase categories were gaming, social networking and entertainment, including apps such as Minecraft, Snapchat and Clash of Clans as well as Netflix. “We are excited that our customers downloaded and enjoyed so many incredible apps for iPhone, iPad, Mac, Apple Watch and Apple TV, spending over $20 billion on the App Store last year alone,” said Philip Schiller, Apple’s senior vice president of Worldwide Marketing. Apple shares were down 2% Wednesday morning.

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Valeant names ex-CFO Howard Schiller as interim CEO

Troubled drug company Valeant Pharmaceuticals International Inc. said Wednesday it has appointed a former finance director as interim chief executive, while its current CEO Michael Pearson remains in hospital with severe pneumonia. The company named Howard Schiller as interim CEO. Schiller was chief financial officer at Valeant from December 2011 through June 2015 and is currently a board member. He came to the company after a 24-year stint at Goldman Sachs . The company also named its independent director Robert Ingram as interim chairman of the board. The timing of Pearson’s return remains uncertain and he will remain on medical leave until further notice, the company said in a statement. Valeant shares were down 3.8% in premarket trade, and have lost 30% in the last 12 months, while the S&P 500 has gained 0.7%.

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Monsanto reports better-than-expected earnings, sales disappoint in first quarter

Monsanto Co. shares dipped more than 1% in premarket trade on Wednesday following better-than-expected first-quarter earnings. The agriculture company reported a net loss of $253 million for the first quarter, or 56 cents loss per share of, compared with net income of $243 million, or per-share earnings of 50 cents during the same period a year ago. Monsanto’s adjusted loss per share was 11 cents, less than the FactSet consensus of a 23 cents per share loss. Sales of $2.22 billion dropped compared with $2.87 billion in the year earlier period, and they were below the $2.38 billion FactSet consensus. Monsanto said it has finalized a plan to reach its $500 million per year target in savings by the end of 2018.

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Smith & Wesson shares slip about 3% premarket as Wedbush downgrades to neutral

Smith & Wesson Holding Corp. shares fell nearly 3% premarket Wednesday, after Wedbush downgraded the stock to neutral from outperform following a big move in its shares. Smith & Wesson rallied this week along with other gun stocks on expectations that new gun checks will prompt a surge in sales of guns and after the company raised its outlook for its January quarter. “While gun industry sales are clearly in ‘surge’ mode, it is difficult to discern just how much of these sales are in fact incremental to the industry versus pulled-forward demand, with plenty of historical examples of both,” analysts wrote in a note. Given a healthy valution and a stock that has climbed more than 150% in a year, “we are taking money off the table, and downgrading,” said the note.

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