Breaking Stock Market and Financial News

Ross Stores shares rally as Q2 earnings top views, company forecasts sales growth

MarketWatch Market Pulse - Thu, 08/17/2017 - 16:23

Shares of Ross Stores Inc. rose more than 11% late Thursday after the retailer reported second-quarter earnings and sales above Wall Street expectations and forecast sales and earnings growth for the second half of the year and for the full fiscal year. Ross said it earned $317 million, or 82 cents a share, in the quarter, compared to $282 million, or 71 cents a share, in the prior-year quarter. Sales rose 8% to $3.43 billion, from $3.18 billion a year ago. Analysts polled by FactSet had expected earnings of 76 cents a share on sales of $3.37 billion. Comparable-store sales were up 4% on top of 4% growth last year, the company said in a statement. An operating margin of 14.9% outperformed the company's projections, "mainly due to a combination of higher merchandise margin and leverage on our above-plan sales gains," Ross said. Ross forecast same-store sales gains between 1% and 2% in the third quarter, and third-quarter per-share earnings to be between 64 cents and 67 cents, up from 62 cents a share in the third quarter of 2016 and compared with analyst expectations of 67 cents. The company forecast fourth-quarter same-store sales growth of 1% to 2%, with per-share earnings between 88 cents and 92 cents. Based on the results for the first half of the year, the company guided for fiscal 2017 per-share earnings to rise 12% to 14% to between $3.16 and $3.23. The analysts surveyed by FactSet expect full-year EPS of $3.17 for Ross. Shares ended the regular trading session down 1.9%.

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Dow books worst one-day decline in three months, down 274 points, as stock market swoons

MarketWatch Market Pulse - Thu, 08/17/2017 - 16:20

U.S. stock-index benchmarks finished sharply lower on Thursday, marking the first time all three major benchmarks closed with a decline of at least 1% on the same time in three months. The broad-market downdraft saw the Dow Jones Industrial Average register its worst single-session drop also in about three months and comes as investor sentiment was derailed by a terror attack in Barcelona and doubts about President Donald Trump's ability to push through legislation that is beneficial to Wall Street after a fervor over his response to a violent, white-supremacist rally in Charlotesville, Va. The Dow Jones Industrial Average ended down 1.2%, while the S&P 500 closed 1.5% lower, marking its lowest level since July 11. The Nasdaq Composite , which is skewed toward tech stocks, fell 1.9%, erasing its gains in the week to date. Cisco Systems was the worst performer on the Dow following poor fiscal fourth quarter earnings yesterday. The one-day decline for the Dow marked its sharpest since May 17, which was also the same day all the main equity benchmarks finished with a decline of at least 1%.

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Energy sector ETF tumbles into first bear market in 18 months

MarketWatch Market Pulse - Thu, 08/17/2017 - 16:19

The SPDR Energy Select Sector exchange-traded fund fell 1.4% Thursday to close at a 16-month low, enough to kick off a new bear market. Many market participants define a bear market as a decline of 20% or more from a bull market peak. And the ETF tracking the energy sector (XLF), which is one of the S&P 500's 11 key sectors, has now lost 20.3% since closing at a bull-market peak of $77.83 on Dec. 13, 2016, which at the time was an 18-month high. Of the XLE's 32 components, 15 have tumbled more than 20% year to date, and 11 of lost more than 30%. The last bear market for the XLE had ended on March 7, 2016, when the XLE closed 20.5% above its previous bear market low of $51.77 on Jan. 20, 2016. On Thursday, 30 of the XLE's components closed lower, with shares of Marathon Oil Corp. down 3.3% to pace the decliners. Chesapeake Energy Corp.'s stock slumped 3.0%, and was the most active component with 36 million shares traded. The XLE's losses Thursday come a rally in oil prices, as September crude oil futures settled up 0.7%.

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Applied Materials stock jumps on third-quarter earnings and sales beat

MarketWatch Market Pulse - Thu, 08/17/2017 - 16:14

Applied Materials Inc. shares rose in the extended session Thursday after the company's third-quarter earnings beat Wall Street expectations. Applied Materials shares jumped 2.2% to $43.12 after hours. The equipment manufacturer's net income rose to $925 million, or 85 cents a share, compared to $505 million, or 46 cents a share, in the year-ago period. Adjusted earnings were 86 cents a share. Revenue increased 33% to $3.74 billion from $2.82 billion in the year-ago period. Analysts surveyed by FactSet had estimated adjusted earnings of 84 cents a share on revenue of $3.69 billion. Executives issued fourth-quarter sales guidance of $3.85 billion to $4 billion, and adjusted earnings of 86 cents to 94 cents per share. Analysts model third-quarter adjusted earnings of 82 cents a share on sales of $3.7 billion. Applied Materials stock has gained 33.6% year-to-date, while the S&P 500 index has gained 8.5%.

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Ackman's Pershing Square says ADP needs to streamline, modernize

Top Reuters News - Thu, 08/17/2017 - 15:48
BOSTON/NEW YORK (Reuters) - Billionaire activist investor William Ackman on Thursday said Automatic Data Processing Inc's stock price could double in the next five years if the human resources outsourcing company cuts costs, streamlines its business and invests in technology upgrades.

Wall Street's 'fear gauge'--the VIX--jumps 34% amid tumbling Dow, Barcelona terror attack

MarketWatch Market Pulse - Thu, 08/17/2017 - 15:47

A widely followed gauge of fear and volatility on Wall Street spiked in Thursday afternoon trade, underscoring a sudden pickup of worry amid handwringing over President Donald Trump, a reported terror attack in Spain and concerns about sluggish inflation. The CBOE Volatility Index was up about 34% at 15.77 in recent trade. The index, which tracks options bets on the S&P 500 index 30-days in the future typically moves inversely with stocks and is viewed as a gauge of the market's wager on pullbacks in the market, because stocks tend to fall faster than they rise. Thursday's climb in the so-called fear gauge, also known as the VIX, coincided with a more-than 200-point tumble in the Dow Jones Industrial Average and a sharp retreat in the S&P 500 index . Stock investors have been shaken by uncertainty around President Trump's ability to get through his business-friendly legislative reforms after a trove of Wall Street leaders disbanded from key presidential advisory committees resulting in their disbanding on Wednesday in reaction to the president's response to a weekend white-supremacist rally in Charlotesville, Va., that resulted in the death of Heather Heyer. The downdraft in the market also comes as a terror attack was being reported by local officials in Barcelona, where at least 13 people were reported dead as well as 50 injured. Concerns about the Fed's acknowledgement that tepid inflation is raising concerns that the economy isn't firing on all cylinders is adding to deflating sentiment. Earlier in the week, the market been enjoying a slight updraft after last week's rough patch. In jeopardy is a four-session rally for the Dow industrials. More broadly, the yield on the 10-year Treasury note was down at 2.19%, with prices rising and yields falling, while haven gold was settled up 0.7% at $1,292.40 an ounce. Those assets tend to rise when investors adopt a more "risk off" posture, dumping assets perceived as risky in times of uncertainty. At last check, the Dow was down 246 points, or 1.2%, at 21,777, the S&P 500 was off 1.4% at 2,433, while the Nasdaq Composite was down 1.7% at 6,239. Concerns about equity valuations also have made stocks more vulnerable to pullbacks, market participants said.

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Dow industrials threaten to book first tumble of at least 1% in 64 sessions

MarketWatch Market Pulse - Thu, 08/17/2017 - 15:46

The Dow Jones Industrial Average on Thursday was on pace to close with its first drop of at least 1%, snapping a streak that had run for more than 60 sessions. The Dow was trading down 243 points, or 1.1%, at 21,782, as the broader stock market faced its biggest selloff since last week's North Korea-fueled jitters. The blue-chip gauge's absence of down days of at least 1% was the longest since a 69-day streak ended Oct. 25, 1995, or about 22 years, according to WSJ Market Group Data. Thursday's fall for the Dow came as the broader market appeared to be fretting about a number of bearish factors, including a record-setting market that has been viewed as too rich and due for a pullback, concerns about the health of the economy and the Federal Reserve's comfort in normalizing interest rates amid levels of inflation that have run below their 2% target, considered indicative of a normally functioning economy. Heightened questions about President Donald Trump's ability to pass a raft of pro-growth policies amid the business world's fervent denouncement of his reaction to a white-supremacist rally also has helped to erode bullish sentiment. TheS&P 500 index , meanwhile, was down 1.4% at 2,433 and the Nasdaq Composite Index was shedding 1.7% at 6,237.

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Museum or dumpster? U.S. cities wrestle with Confederate statues' fate

Top Reuters News - Thu, 08/17/2017 - 14:49
(Reuters) - As communities across the United States redouble efforts to remove Confederate monuments from public spaces after a far-right rally in Virginia turned deadly, city leaders now face another conundrum: what to do with the statues.

Oil prices end higher after three-session decline

MarketWatch Market Pulse - Thu, 08/17/2017 - 14:44

Oil prices finished higher Thursday, following losses over the past three trading sessions. Traders continued to digest data from the Energy Information Administration released Wednesday that revealed a rise in total U.S. crude production to their highest level in more than two years, but also a weekly drop in domestic supplies that was the largest in 11 months. September West Texas Intermediate crude rose 31 cents, or 0.7%, to settle at $47.09 a barrel on the New York Mercantile Exchange.

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Exclusive: SEC officials' holdings, legal work, pose potential conflicts

Top Reuters News - Thu, 08/17/2017 - 14:38
WASHINGTON (Reuters) - Two lawyers appointed to senior jobs at the U.S. Securities and Exchange Commission have ties to major companies including financial firms Goldman Sachs Group Inc and Wells Fargo & Co that could complicate efforts to regulate them, according to government documents viewed by Reuters.

ADP 'strongly disagrees' with Bill Ackman as war of words continues

MarketWatch Market Pulse - Thu, 08/17/2017 - 14:24

The war of words between Automatic Data Processing Inc. and activist hedge fund manager Bill Ackman continued Thursday, as ADP weighed in on a presentation made by Ackman earlier in the day. The company said it "strongly disagrees" with Ackman's assertions, which it said show a lack of understanding of the company and its strategy. Ackman said the value of ADP's stock could more than double by 2021 "with "no changes in the credit rating, capital structure, dividend policy, or clients funds investment strategy." Pershing said ADP's "buy" instead of "build" strategy has led to weak product offerings, most notably in enterprise, and inefficient legacy back-end infrastructure. "ADP's focus on 'hitting the numbers' has led to value-destructive decisions with negative long-term consequences," Pershing wrote in the presentation. Ackman is seeking five board seats and is urging a change of CEO. "ADP is not resting on its laurels. Our board and management team are thoughtfully transforming our organization and culture to compete effectively and drive global growth in the evolving Human Capital Management market," the company said. ADP shares fell 5%, but are up just 3.6% in 2017, while the S&P 500 has gained 9%.

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Russell 2000 falls below 200-day moving average for first time in 14 months

MarketWatch Market Pulse - Thu, 08/17/2017 - 14:18

The Russell 2000 index of small capitalization stocks fell 0.9% in afternoon trade Thursday, to peek below the widely-watched 200-day moving average (MA) line for the first time in nearly 14 months. The 200-day MA is viewed by many chart watchers as as dividing line between longer-term uptrends and downtrends. The Russell 2000 was last below that line intraday on June 29, 2016, but last closed below the line on June 28. The 286-session stretch that the index has closed above the line would be the longest since the 363-session stretch ending May 5, 2014. The Russell 2000 is seen by many as a leading indicator for the larger cap indexes, as small cap stocks tend to be less liquid than large caps so they tend to underperform during market declines and outperform during market rallies. The Dow Jones Industrial Average is currently 1,286 points, or 6.3% above its 200-day MA, while the S&P 500 is 4.2% above it and the Nasdaq Composite is 6.8% above it.

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U.S. to honor Japan defense pact 'without reservation': Tillerson

Top Reuters News - Thu, 08/17/2017 - 14:18
WASHINGTON (Reuters) - U.S. Secretary of State Rex Tillerson on Thursday said the United States would honor its defense treaty agreements with Japan "without reservation" after talks in Washington with Japan's foreign and defense ministers focused on North Korea's nuclear and missile threats.

Hershey shares jump 3% as Bernstein upgrades to outperform

MarketWatch Market Pulse - Thu, 08/17/2017 - 13:04

Shares of chocolate maker Hershey Co. jumped 3% Thursday, after Bernstein upgraded the stock to outperform from market perform and said a 37% decline in cocoa costs since last summer should boost margins. Cocoa costs account for 10% to 15% of Hershey's cost of goods sold, according to Bernstein's estimates, and the commodity is expected to continue to decline in price in the next few years. "Easing cocoa prices could be a major tailwind as we move out into 2018, more than offsetting the relatively mild inflation in dairy prices," wrote analysts led by Alexia Howard. "The last time cocoa prices declined in 2011, the company saw its gross margin improve from 42.4% in 2011 to 46% by 2013." Bernstein expects the U.S. chocolate market to keep growing modestly, buoyed by a millennial preference for snacking, innovation and higher marketing spend in response to Mondelez's entry to the market. Finally, food labels that were to be introduced in 2018 that would specify what percent of a daily allowance of sugar is in chocolate has been postponed, said the note. Hershey shares have gained 5.4% in 2017, while the S&P 500 has gained about 10%.

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Reps. Cummings, Welch to launch investigation into multiple sclerosis drug prices

MarketWatch Market Pulse - Thu, 08/17/2017 - 12:59

Rep. Elijah Cummings (D-Md.) and Rep. Peter Welch (D-Vt.) said Thursday morning that they are launching an investigation into multiple sclerosis drug prices, and have sent letters to seven pharmaceutical companies about their pricing strategies. Letters were sent to Bayer AG , Biogen Inc. , Merck & Co.'s EMD Serono, Novartis AG , Sanofi SA , Teva Pharmaceutical Industries Ltd. and Roche Holding AG . Biogen shares declined 2.9% in heavy midday trade and Teva shares declined 1.1% in moderate trade. The lawmakers asked for information to evaluate multiple sclerosis drugs' "substantial price increases, including information about corporate profits and expenses and documents concerning pricing strategies, patient assistance programs, and drug distribution systems," and requested a response by the end of the month. The average price of a multiple sclerosis disease-modifying therapy rose from $16,000 in 2004 to about $84,000 in 2017, according to the National Multiple Sclerosis Society (the numbers refer to average wholesale price, which does not reflect often-substantial discounts and rebates). Prices for drugs sold by the seven drugmakers have increased by as much as 1,002% since 2012, according to information from the National Multiple Sclerosis Society cited by the two representatives. The lawmakers said that their letter referred to an American Academy of Neurology study that found "some drug companies appear to be increasing their prices and setting new, higher prices in lockstep in competitors," which may reflect a phenomenon called "shadow pricing" in which companies respond to eachothers' price increases.

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Barcelona officials call van attack apparent terrorism; fatalities reported

MarketWatch Market Pulse - Thu, 08/17/2017 - 12:59

A vehicle ran into a crowd in central Barcelona, injuring several pedestrians, according to multiple news reports citing Spanish police, with some media outlets indicating officials had characterized the incident as an intentional attack. Police reportedly concluded the attack was a terrorist action. The attack reportedly involving a white van occurred near Plaza Catalunya in the Spanish city's busy and heavily touristed Ramblas area. Police have confirmed fatalities in the attack, the Associated Press and others reported. The AP cited the police as putting the death count at 13. Local media in Barcelona were reporting that hostages were being held at a restaurant in the vicinity.

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Van crashes into crowds in Barcelona, media say two killed

Top Reuters News - Thu, 08/17/2017 - 12:58
BARCELONA (Reuters) - A van crashed into dozens of people in the center of Barcelona on Thursday and Spanish media said at least two people were killed.

Quartet of stocks, led by Wal-Mart, Goldman, chop 50 points from Dow industrials

MarketWatch Market Pulse - Thu, 08/17/2017 - 11:53

The Dow Jones Industrial Average on Thursday was being yanked firmly lower in midday trade as four of its components were under severe pressure. Shares of Apple Inc. , Goldman Sachs Group Inc. , Wal-Mart Stores Inc. and Cisco Systems Inc. were exacting a more-than 50-point toll on the Dow , which was down more than 100 points, with those components representing the lion's share of the fall. Wal-Mart's share decline came even as the the giant retailer reported quarterly results that were better than expected, but showed disappointing sales in its Sam's Club unit. Cisco Systems Inc. lost 3.9% after the networking-equipment company late Wednesday reported earnings that missed forecasts. More broadly, the S&P 500 index was off 0.7% at 2,452, and the Nasdaq Composite Index was giving up 0.8% in early trade at 6,292.

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Target's stock gains after MKM analyst turns bullish as traffic 'perks up'

MarketWatch Market Pulse - Thu, 08/17/2017 - 10:52

Shares of Target Corp edged up 0.6% in morning trade Thursday, bucking the declines seen in the broader retail sector and rival Wal-Mart Stores Inc. shares, after the discount retailer was upgraded at MKM Partners, citing "encouraging" quarterly results as traffic "perks up." Analyst Patrick McKeever raised his rating to buy, after being neutral for at least the last three years. He boosted his stock price target to $69. which was 22% above current levels, from $58. McKeever highlighted that traffic growth of 2.1% was the best since the fourth-quarter of 2014. "New brands appear to be playing a big role as consumers respond enthusiastically to Cat & Jack, Pillowfort and the more recently introduced Cloud Island," Mckeever wrote in a note to clients. Meanwhile, Wal-Mart's stock shed 2.1% in morning trade, after reporting earlier traffic at Walmart U.S. stores rose just 1.3%. The SPDR S&P Retail ETF was down 0.4%. So far this year, Target's stock has tumbled 22%, while Wal-Mart shares have run up 15%, the retail ETF has lost 12% and the S&P 500 has gained 9.5%.

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Natural-gas prices edge up as traders parse through revised EIA supply data

MarketWatch Market Pulse - Thu, 08/17/2017 - 10:45

Data from the U.S. Energy Information Administration on Thursday showed that domestic supplies of natural gas rose by 53 billion cubic feet for the week ended Aug. 11. The data, however, included revisions to figures for previous weeks tied to a reclassification of natural gas in storage from working gas to base gas. On average, analysts were looking for a build of 47 billion cubic feet, according to commodity brokerage firm iiTRADER. Total stocks now stand at 3.082 trillion cubic feet, down 254 billion cubic feet from a year ago, but 55 billion cubic feet above the five-year average, the government said. September natural gas was up 2 cents, or 0.8%, from Wednesday's settlement to $2.910 per million British thermal units. It traded at $2.882 before the data.

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