Tag: stock market

Shares of seeds, grains and fertilizer company Bunge Ltd. slid 12% Wednesday, after the company posted weaker-than-expected profit for the first quarter. Bunge said it had net income of $47 million, or 36 cents a share, in the quarter, down sharply from $235 million, or $1.60 a share, in the same period a year ago. Adjusted per-share earnings came to 35 cents, or half of the 70 cents consensus of analysts polled by FactSet. Sales rose to $11.1 billion from $8.9 billion, ahead of the FactSet consensus of $8.9 billion. “The slow pace of farmer selling in South America compressed margins in agribusiness and led to a lower than expected first quarter,” Chief Executive Soren Schroder said in a statment. “Our teams managed risks, logistics and industrial operations well. Despite this difficult start, we continue to expect 2017 to be a year of solid year-over-year earnings growth, although below our prior expectations.” The company is now expecting full-year earnings before interest and taxes at the agribusiness to range from $800 million to $925 million, the bulk of which is expected in the second half. Shares are down 7.5% in 2017, while the S&P 500 has gained 6.5%.

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Shares of financial companies rose on Wednesday, rising to their highs of the session after the Federal Reserve left interest rates unchanged but said that the weak read in first-quarter GDP was “likely to be transitory.” The Financial Select Sector SPDR ETF rose 0.6%. It traded at 0.2% prior to the Fed’s announcement. Among specific names, Bank of America Corp. rose 0.4% while Citigroup Inc. added 0.5%. Wells Fargo & Co. climbed 0.9%. Bank stocks are highly correlated to Federal Reserve activity, and tend to outperform in times of rising rates. Higher rates tends to boost bank net interest margins, which can lead to higher profitability.

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Gold prices fell Wednesday to log their lowest finish in about four weeks, then moved a bit higher in electronic trading after the U.S. Federal Reserve’s policy announcement. The U.S. dollar held modest strength against most currency rivals as the Fed signaled that it’s still on track to raise interest rates at a gradual pace. June gold was last at $1,249 an ounce in electronic trading, but had climbed above $1,250 in the immediate wake of the Fed news. Prices lost $8.50, or 0.7%, to end at $1,248.50 an ounce for the session-the lowest settlement for gold futures since April 5, according to FactSet data.

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Moody’s Investors Service downgraded IBM Corp.’s Aa3 rating by one notch to A1 and revised its outlook to stable from negative. “Despite still solid debt protection measures and progress in transitioning its business towards becoming a provider of enterprise class, data analytics and cloud-based offerings, the downgrade reflects the transformation and high level of investments which have negatively impacted IBM’s profitability and cash flow, as well as concerns that IBM will remain challenged for a longer than previously anticipated time to grow total revenue and return to the margin profile achieved prior to 2016,” said Richard Lane, a Moody’s senior vice president. IBM has made progress in shifting toward cloud services, but total revenue has been flat or negative for 19 quarters, said the analyst.

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U.S. commonwealth Puerto Rico is planning to seek a court-supervised restructuring of some $73 billion in outstanding debt. The cash-strapped island’s governor, Ricardo Rosselló, will petition the commonwealth’s oversight board to enact rule Title III–a court-supervised bankruptcy-like restructuring process that would allow it to rework billions in debt owed to creditors, including hedge funds and banks. Puerto Rico is not technically a municipality and therefore isn’t covered by U.S. bankruptcy law under Chapter 9, but a federal oversight board was created by a bill passed in Congress under President Barack Obama last June that grants the commonwealth bankruptcy-like protections. The move follows negotiations with Puerto Rico’s obligations that have so far failed to result in an agreement. Puerto Rico’s efforts to retool its debtload have been a longstanding problem for the island. “We are here to address the problems of Puerto Rico, not to look at the past, and I am convinced that our island will be able to resume the path of economic development with the correct steps by the government and the determination of each of its residents,” said Gov. Rosselló at a news conference on Wednesday to discuss Puerto Rico’s move.

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Shares of Frontier Communications Corp. plunged 11% toward a 34-year low in very active morning trade Wednesday, after the communications services company reported a wider-than-expected first-quarter loss, slashed its dividend and set terms of its proposed reverse stock split. Volume ballooned to 60.1 million shares, compared with the full-day average of 43 million shares. Frontier reported late Tuesday a per-share loss of 8 cents, wider than the FactSet per-share loss consensus of 6 cents. The company cut its quarterly dividend by 62% to 4 cents a share from 10.5 cents a share, and said it will set the reverse stock split at 1-for-15. The company had approved the reverse split in March, subject to shareholder approval in May, but at the time said it would be set between 1-for-10 and 1-for-25. Raymond James analyst Frank Louthan IV reiterated his outperform rating, saying the expected dividend cut removes an overhang on the stock, and that the value of Frontier’s fiber-based network assets is “much higher” than what current stock prices suggest. The stock has plunged 49% year to date, while the iShares U.S. Telecommunications ETF has lost 3.5% and the S&P 500 has gained 6.5%.

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From:: Stock Market News

U.S. commonwealth Puerto Rico is planning to seek a court-supervised restructuring of some $73 billion in outstanding debt, according to the Wall Street Journal. The cash-strapped island’s governor, Ricardo Rosselló, will petition the commonwealth’s oversight board to enact rule Title III–a court-supervised bankruptcy-like restructuring process that would allow it to rework billions in debt owed to creditors, including hedge funds and banks. Puerto Rico is not technically a municipality and therefore isn’t covered by U.S. bankruptcy law under Chapter 9, but a federal oversight board was created by a bill passed in Congress under President Barack Obama last June that grants the commonwealth bankruptcy-like protections. The move follows negotiations with Puerto Rico’s obligations that have so far failed to reach an agreement. Puerto Rico’s efforts to retool its debtload have been a longstanding problem for the island.

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The bounce in Advanced Micro Devices Inc.’s stock , following the previous session’s plunge, lasted barely 17 minutes before resuming its slide. The stock rose as much as 2.2% to an intraday hihgh of $10.55 about 10 minutes after the open, but erased all those gains to trade back in the red by 9:47 a.m. ET, according to FactSet. The stock has shed as much as 4.6% to an intraday low of $9.85 by 10:10 a.m., before paring losses to be down 1%. The stock had dropped 24% on Tuesday, the biggest one-day percentage decline since January 2005, after the chipmaker reported first-quarter results. Volume remained heavy at 63.6 million shares in recent trade, enough to make the stock the most actively traded on the major U.S. exchanges. The stock has shed 16% over the past three months, while the PHLX Semiconductor Index has gained 3.9% and the S&P 500 has tacked on 3.6%.

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Oil prices turned a bit lower Wednesday after data from the U.S. Energy Information Administration showed that domestic crude supplies fell by 900,000 barrels for the week ended April 28. That was well below the 4.2 million-barrel drop reported by the American Petroleum Institute late Tuesday, according to sources. Analysts polled by S&P Global Platts forecast a larger decline of 2.25 million barrels. Gasoline stockpiles edged up by 200,000 barrels, while distillate stockpiles were down 600,000 barrels last week, according to the EIA. The S&P Global Platts survey had forecast modest increases for both products. June crude fell 13 cents, or 0.3%, to $47.53 a barrel on the New York Mercantile Exchange. It traded at $48.89 before the supply data. [Updated to correct forecasts for crude products.]

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S&P Global downgraded Guitar Center’s rating to CCC-plus from B-minus on Wednesday and said the company has underperformed its expectations. The biggest retailer of musical instruments in the world is unlikely to improve its credit metrics meaningfully ahead of early 2019 debt maturities and its capital structure is unsustainable given thin EBITDA interest coverage, high leverage and weak cash flow, the agency said in a statement. The outlook is negative, meaning S&P could downgrade the rating again in the medium term. “The downgrade reflects our view that strategic operating initiatives will be insufficient to meaningfully improve revenue and profits ahead of looming sizable debt maturities in early 2019, especially in light of a challenging retail environment that we expect to continue,” said credit analyst Samantha Stone. The company has $615 million of 6.5% notes that mature in April of 2019, that were last trading at 83 cents on the dollar, according to MarketAxess. Guitar Center has a total debt burden of $1.6 billion, taken on as part of an $2.1 billion LBO by Mitt Romney’s former private-equity firm Bain Capital in 2007. Moody’s Investors Service earlier this month revised the outlook on its B2 rating on the retailer to negative.

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