Tag: stock market

White House press secretary Sean Spicer said Tuesday he hopes former acting attorney general Sally Yates testifies to Congress as part of a probe into possible links between President Donald Trump’s campaign and Russian officials. He called a Washington Post story that said the Justice Department tried to block Yates from testifying on Russia “100% false.” Also read: Here’s why the White House may have wanted to block Sally Yates from testifying.

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From:: Stock Market News

Moody’s Investors Service said Tuesday a proposal from hedge fund billionaire David Einhorn’s Greenlight Capital that General Motors Co. adopt a dual-class stock structure is a credit negative for the car maker and its subsidiaries. “If adopted, the proposal would represent a significant departure from the company’s current financial strategy,” the rating agency wrote in a statement. “This well-defined and publicly-communicated strategy was an important element in the recent upgrade of GM’s ratings.” Earlier, GM rejected the proposal, which in effect, would eliminate the dividend on the existing common stock. Moody’s said the move would reduce GM’s financial flexibility and raise credit risk. “The creation of a perpetual, cumulative dividend in excess of $2.2 billion would saddle GM with a sizable and largely inflexible cash outflow burden,” the agency wrote. GM’s most active bonds, the 4.350% notes due January of 2027, were trading at 101 cents on the dollar, according to MarketAxess. GM shares were up 2.8% but have gained just 2.5% in the year so far, while the S&P 500 has gained 5%.

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Despite the recovering economy and a substantially improved job market, pockets of persistently high unemployment remain in lower-income and minority communities, Fed Chairwoman Janet Yellen said Tuesday. Fed interest-rate policy is not the best tool to combat this problem, Yellen said in a speech to the National Community Reinvestment Coalition meeting. Instead, there is a need for “effective workforce development options for these communities,” she said. These programs should include vocational training and apprenticeships as not every student can afford a two-or-four year college degree, Yellen said. The Fed chief did not discuss the economic outlook or monetary policy in her prepared remarks.

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The Scottish parliament has voted in favor of holding a second referendum on independence, media reports said Tuesday. The vote has granted Scotland’s first minister, Nicola Sturgeon, the authority to negotiate with Westminster on holding another vote. Scottish voters rejected independence in a 2014 referendum, but voted to remain in the European Union during last year’s Brexit referendum. The news comes a day after Sturgeon met with British Prime Minister Theresa May, who has said she will attempt to block a second Scottish referendum taking place during the Brexit negotiations. But Sturgeon said her timetable would not interfere with that process but rather give Scotland the change to choose its future once the terms of the UK’s exit are clear and before it’s “too late to choose our own course.”

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Regeneron Pharmaceuticals Inc. and Sanofi SA said Tuesday the U.S. Food and Drug Administration has approved Dupixent Injection, the only biologic medicine approved for treating adults with moderate-to-severe atopic dermatitis that does not respond to topical prescription treatments. Atopic dermatitis is the most common form of eczema and estimates suggest as many as 300,000 sufferers are in need of new treatment options, the companies said in a joint statement. Regeneron shares were halted for the news. Sanofi shares closed up 0.6% in Paris.

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General Motors Co. said Tuesday that it rejected a proposal by billionaire investor David Einhorn’s hedge fund Greenlight Capital to create a dual-class common stock structure, that in effect eliminate the dividend on the existing common stock. GM said it believes Greenlight’s proposal creates “unacceptable risks,” including the auto maker’s loss of its investment grade credit rating, material governance challenges and uncertain investor demand. “For seven months, we’ve extensively reviewed the proposed dual-class structure, as well as other capital allocation strategies, and concluded that continuing to execute our strategy and adhering to our current disciplined capital allocation framework is the best path to deliver increased value,” said Chief Executive Mary Barra. Greenlight also nominated four candidates for election to GM’s board, but GM said the board has “unanimously determined” it would not recommend any of the nominees for election. GM’s stock rallied 3.3% in midday trade, as a WSJ report of Greenlight’s proposal made the rounds. The stock has now gained 3% year to date, while the S&P 500 has tacked on 5.2%.

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Apple Inc.’s stock rallied 1.1% in midday trade Tuesday, putting it on track for its fifth record close this month, and 11th so far this year, after a bullish note from UBS. The stock was changing hands at $142.36, above the March 20 record close of $141.46, but below the March 21 all-time intraday high of $142.80. UBS analyst Steven Milunovich said he could envision a scenario that pushes Apple’s stock price up to $200 over the next 2 to 3 years, which is 40% above current levels. Even Milunovich’s “most likely scenario” has Apple’s stock at $175, which is 23% above current levels. A third scenario Milunovich described was a bearish one, as iPhone maturation, the lack of new products and margin pressure could knock the stock down to $125, or 12% below current levels. The has soared 23% year to date, while the SPDR Technology Select Sector ETF has climbed 9.5% and the Dow Jones Industrial Average has gained 4.4%.

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House Speaker Paul Ryan said Tuesday he wouldn’t put a timeline on a new effort to repeal and replace Obamacare after last week’s failure of a Republican bill. “This is too important not to get right,” Ryan told reporters at a news conference on Capitol Hill. The Wisconsin Republican said his party also wants to move ahead on border security and a tax-code overhaul.

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Shares of General Motors Co. jumped 2.6% in morning trade Tuesday, after The Wall Street Journal reported that billionaire investor David Einhorn was pressuring the automaker to boost stock prices. Citing people familiar with the matter, the WSJ reported that Einhorn is pushing GM to split its common stock into two classes, one that pays dividends and another that entitles shareholders to earnings, including share repurchases, after the dividend is paid. Einhorn believes the move would attract new investors, and could raised GM’s market capitalization by $38 billion, the WSJ reported, compared with the current market capitalization of about $53.2 billion. Einhorn’s hedge fund Greenlight Capital owned 13.17 million shares of GM, or about 0.9% of the shares outstanding, and call options to buy 25 million more shares, as of Dec. 31, according to SEC filings. The stock has gained 1.2% over the past three months, while the S&P 500 has tacked on 4.2%.

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The “big announcement” from Ford Motor Co. that President Donald Trump tweeted about earlier Tuesday, highlighting “JOBS! JOBS! JOBS!,” was Ford saying it would “create or retain” 130 jobs as it expands capacity at the Romeo Engine Plant in Michigan. That was part of Ford’s plan to invest a total of $1.2 billion in three Michigan plants: $850 million to retool Michigan Assembly Plant to build Ford Ranger vehicles, starting at the end of 2018, and to build Ford Bronco vehicles in 2020; $150 million to expand capacity for engine components for several vehicles at Romeo Engine Plant; and $200 million to support a previously announced data center it was building. In January, Ford said it was spending $700 million and adding 700 new jobs to build a data center at its Flat Rock Assembly Plant. Ford’s announcement Tuesday come less than a week after the automaker provided a first-quarter profit outlook that was below expectations, and less than two weeks after announcing a $642 million investment in a German plant that makes Ford Focus vehicles. The stock rose 0.8% in morning trade, after tumbling 9.8% over the previous seven sessions. The stock has now lost 4.9% year to date, while the S&P 500 has gained 4.6%.

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From:: Stock Market News