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Updated: 50 min 35 sec ago

Gap stock leaps after beat on earnings, increased forecast

Thu, 11/16/2017 - 16:21

Gap Inc. shares jumped as much as 8% in late trading Thursday after the retailer reported an earnings beat and increased its guidance for the full year ahead of the important holiday-shopping season. The retail company--which owns and operates the Gap, Banana Republic and Old Navy chains--reported profit of $228 million, or 58 cents a share, down from 60 cents a share a year ago. Total revenue for the third quarter was $3.84 billion, up from $3.8 billion in the same quarter last year. Analysts on average expected Gap to report earnings of 54 cents a share on sales of $3.76 billion, according to FactSet. Gap said it now expects full-year earnings of $2.18 a share to $2.22 a share, after previously guiding for earnings of $2.02 a share to $2.10 a share. Shares neared $30 a share in immediate after-hours trading following the report's release, after closing with a 2.2% increase at $27.48.

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Splunk stock jumps 7% after earnings, sales beat

Thu, 11/16/2017 - 16:16

Splunk Inc. shares surged in the extended session Thursday after the company beat Wall Street sales and earnings expectations. Splunk shares rose 7.1% to $72.25 after hours. The company reported third-quarter net losses of $50.8 million, or 36 cents a share, compared with losses of $91 million, or 69 cents a share, in the year-ago period. Adjusted earnings were 17 cents a share. Revenue rose to $328.7 million from $244.8 million in the year-ago period. Analysts surveyed by FactSet had estimated adjusted earnings of 14 cents a share on revenue of $309 million. For the fourth quarter, analysts model adjusted earnings of 32 cents a share on revenue of $384 million. Executives forecast fourth-quarter revenue of between $388 million and $390 million. Splunk stock has gained 35% this year, with the S&P 500 index rising 15%.

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Ross Store shares up 7% on earnings beat, higher sales guidance

Thu, 11/16/2017 - 16:16

Shares of Ross Stores Inc. rose more than 7% late Thursday after the retailer reported third-quarter earnings and sales above Wall Street expectations and increased its fourth-quarter sales guidance. Ross said it earned $274.4 million, or 72 cents a share, in the quarter, compared with $244.5 million, or 62 cents a share, in the year-ago period. Sales rose to $3.33 billion, from $3.10 billion a year ago. Analysts polled by FactSet had expected adjusted earnings of 67 cents a share on sales of $3.26 billion. "Given our better-than-expected trends in the third quarter, we are raising our sales expectations for the fourth quarter," Ross said in a statement. It forecast comparable-store sales to increase 2% to 3%, compared with a 4% gain last year. Earnings per share are projected to be between 88 cents and 92 cents in the fourth quarter, compared with 77 cents in the fourth quarter of 2016. The company also called for per-share earnings in the range of $3.24 to $3.28 a share for full year 2017. The analysts surveyed by FactSet expect fourth-quarter earnings of 92 cents a share and full year 2018 earnings of $3.23 a share.

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Applied Materials shares shed some of day's gains after earnings beat

Thu, 11/16/2017 - 16:15

Applied Materials Inc. shares declined in the extended session Thursday even after the chip-materials company's quarterly results and outlook topped Wall Street estimates. Applied Materials shares declined 2.5% to $56.44 after hours, following a 3.7% gain during the regular session. At the close, shares were up 79% for the year. The company reported fiscal fourth-quarter net income of $982 million, or 91 cents a share, compared with $610 million, or 56 cents a share, in the year-ago period. Adjusted earnings were 93 cents a share. Revenue rose to $3.97 billion from $3.3 billion in the year-ago period. Analysts surveyed by FactSet had estimated 91 cents a share on revenue of $3.94 billion. For the fiscal first quarter, Applied Materials estimates earnings of 94 cents to $1.02 a share on revenue of $4 billion to $4.2 billion. Analysts expect earnings of 91 cents a share on revenue of $3.97 billion for the first quarter.

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U.S. stock indexes close higher; Nasdaq hits all-time high

Thu, 11/16/2017 - 16:01

U.S. benchmark equities ended higher on Thursday, extending gains after the House passed its version of the tax bill. All three major stock indexes rebounded after sustaining two straight losing sessions. Cisco and Walmart surged after their third-quarter earnings beat analysts'expectations. The tech-heavy Nasdaq closed at all-time records. The Nasdaq Composite Index rose 87 points, or 1.3%, to 6793. The Dow Jones Industrial Average climbed 187 points, or 0.8%, to 23458. The S&P 500 rose 21 points, or 0.8%, to 2587.

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Barnes & Noble rejects proposal to take it private

Thu, 11/16/2017 - 15:41

Barnes & Noble Inc. said Thursday it does not accept a proposal to take the bookstore chain private as "bona fide," or genuine, as the company behind the proposal, Sandell Asset Management Corp., is the "beneficial owner" of 1 million common Barnes & Noble shares worth approximately $7 million. Chairman Leonard Riggio "has no intention of rolling his shares into such a transaction, and the company believes a debt financing of $500 million is highly unlikely," Barnes & Noble said in a statement. The stock had surged as much as 19% earlier Thursday after The Wall Street Journal said Sandell had proposed to take the company private at more than $9 a share on a deal worth about $750 million, including debt, that would require $500 million in debt financing. Riggio, who holds a roughly 18& stake in the company, would not agree to the deal, according to the report, which cited a person familiar with the situation. The stock has fallen 36% in 2017, while the S&P 500 has gained around 15%.

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Senate asks Trump son-in-law Kushner for Wikileaks, Russia emails

Thu, 11/16/2017 - 15:41

WASHINGTON (MarketWatch) - President Trump's son in law, Jared Kushner, has been asked by a Senate panel to turn over emails from 2016 about Wikileaks and documents about a "Russian backdoor overture and dinner invite." Democrat Diane Feinstein and Republican Charles Grassley are leading the Senate investigation of Russian interference in the 2016 election. They are also seeking emails about Kushner's contact with former National Security Advisor Michael Flynn. The senators said they are aware of such emails but that Kusher has not provided them copies.

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House passes tax overhaul on party-line vote

Thu, 11/16/2017 - 13:50

The House of Representatives passed its version of a tax overhaul Thursday, advancing a key Republican priority. The bill, called the Tax Cuts and Jobs Act, would cut the corporate rate to 20%; set up four tax brackets; and switch the U.S. to a so-called territorial tax system. House passage is just one step, however. The Senate Finance Committee is working on a separate measure that differs in key respects, notably by repealing Obamacare's individual insurance mandate. The House and Senate must agree on a single measure before sending it to President Donald Trump. The House bill passed 227 to 205.

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Barnes & Noble shares surge 16% on WSJ report investor is proposing to take it private

Thu, 11/16/2017 - 13:18

Shares of book store chain Barnes & Noble Inc. surged 16% Thursday, after the Wall Street Journal said an investor is proposing to take the company private at more than $9 a share. Sandell Asset Management Corp. has proposed a deal worth about $750 million, including debt, that would require $500 million in debt financing, the paper said. The remaining $250 million would come from current shareholders, who would roll their stakes over into a new private entity. Chairman Leonard Riggio would not agree to the deal, the paper said, citing a person familiar with the situation. Riggio holds a roughly 18% stake in the company. Shares were last up 16% after resuming trade following a halt. The stock has fallen 31% in 2017, while the S&P 500 has gained about 15%.

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Judge declares mistrial in Menendez case, AP reports

Thu, 11/16/2017 - 13:11

A judge declared a mistrial in the bribery trial against Sen. Bob Menendez, the New Jersey Democrat, the Associated Press reported. Menendez and a doctor were charged with a bribery scheme. Menendez potentially could be retried.

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Senate confirms Joseph Otting as comptroller of currency

Thu, 11/16/2017 - 12:41

The Senate on Thursday confirmed Joseph Otting as comptroller of the currency, by a vote of 54-43. President Donald Trump nominated Otting, a former regional banker, for the post in June. Otting will oversee federally chartered banks in his role. Otting will replace Keith Noreika, who has held the post in an acting capacity.

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GE credit downgraded at Moody's; shares pare earlier gains

Thu, 11/16/2017 - 11:26

General Electric Co. stock was up 0.1% in morning trade, but pared earlier gains of as much as 1.2%. The industrial conglomerate's long-term credit rating was cut one notch to A2 from A1 at Moody's Investors Service, which cited the "severe deterioration" in GE's Power business, that will last through at least 2019. Moody's affirmed GE's short-term rating of Prime-1, and said the ratings outlook was stable, but said GE's credit metrics "are not expected to be consistent with expectations for the A2 rating over the next several years." The stock, which closed at Tuesday at a near six-year low, has tumbled 11% since new Chief Executive John Flannery detailed GE's turnaround plan on Monday, and has plunged 23% since the day after GE reported third-quarter results on Oct. 20. "Moody's does not anticipate that GE will allocate a meaningful portion of any proceeds from planned asset disposals to debt reduction in the near term to help expedite the restoration of credit metrics," Moody's said in a statement. GE's stock has plummted 42% year to date, while the Dow Jones Industrial Average has gained 19%.

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Biotech Arsanis shares surge 40% in their first minutes of trade

Thu, 11/16/2017 - 10:56

Shares of biotech Arsanis Inc. surged 40% in their first minutes of trade Thursday, after the company priced its initial public offering at $10, well below its price range of $15 to $17. The stock added more than $4 to trade above $14. Waltham, Mass. and Vienna, Austria- based Arsanis is a clinical-stage biopharmaceutical company that is focused on applying monoclonal antibody immunotherapies to address serious infectious disease. The company sold 4 million shares to raise $40 million. Proceeds will be used to fund operating expenses, capital expenditure requirements and debt service payments into mid 2019, including the completion of trials of its ASN100 treatment for the prevention of Staphylococcus aureus, or pneumonia in high-risk, mechanically ventilated patients, for which there is currently no approved treatment. The S&P 500 was up 0.8%.

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EIA reports first weekly fall in U.S. natural-gas supply since March

Thu, 11/16/2017 - 10:35

Data from the U.S.Energy Information Administration on Thursday showed that domestic supplies of natural gas fell by 18 billion cubic feet for the week ended Nov. 10. That was the first weekly decline since March. Analysts surveyed by S&P Global Platts forecast a decrease of 14 billion. Total stocks now stand at 3.772 trillion cubic feet, down 271 billion cubic feet from a year ago, and 101 billion cubic feet below the five-year average, the government said. December natural gas rose 1.6 cents, or 0.5%, from Wednesday's settlement to $2.098 per million British thermal units, little changed from $3.092 before the data.

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Exxon Mobil's stock falls for 5th-straight session after RBC cuts price target

Thu, 11/16/2017 - 10:02

Shares of Exxon Mobil Corp. fell 1.0% in morning trade Thursday, putting them on course for a fifth-straight loss to an 8-week low, after RBC Capital cut its stock price target on concerns over the potential for future share buybacks. Analyst Biraj Borkhataria, who rates Exxon Mobil sector perform, lowered his price target to $85, which is just 5.5% above current levels, from $90. Borkhataria said recent conversations with investors indicate many favor the stock given its relatively high dividend yield, but Borkhataria believes that argument fails to recognize that share buybacks have been a core part of shareholder returns in the past, and that's not likely to see much growth. "We see limited scope for Exxon to raise the share buyback program materially going forward, with surplus cash likely to be utilized in asset acquisitions," Borkhataria wrote in a note to clients. "On an all-in basis, we see Exxon trading in line with the market, and thus materially less attractive than in prior years." At current share prices, Exxon's dividend yield of 3.83% is above the implied yield of the SPDR Energy Select Sector ETF of 3.19% and of the S&P 500 implied yield of 1.94%. Exxon Mobil's yield puts it in the 92nd-percentile of S&P 500 components. The stock has slid 10.9% year to date, while the Energy ETF has lost 11.0% and the S&P 500 has gained 15.1%.

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NetApp shares rocket 15%, as analysts applaud strong earnings

Thu, 11/16/2017 - 09:45

NetApp Inc. shares rocketed 15% out of the gate Thursday, as analysts applauded better-than-expected fiscal second-quarter earnings. D.A. Davidson analyst Mark Kelleher said the company has executed a 'significant company realignment' in the last two years as it moved into the Flash storage system market. "Strategic (growth) products continue to provide a strong revenue tailwind, while the headwind of Mature products is moderating," Kelleher wrote in a note. "We continue to believe NTAP offers an attractive value investment opportunity. The company has a rejuvenated product line that now spans many new markets (including Cloud and Flash); it has strong cash flow, and a commitment to its stock buyback program." Kelleher reiterated his buy rating on the stock and raised his price target to $56 from $53. Raymond James analyst Simon Leopold stuck with a market perform rating on the stock, but said the strong guidance was encouraging, as he had been cautious given strong comparisons starting in the January quarter. "We are incrementally positive around stable single digit y/y percentage growth, but continue to be cautious given the tough competitive environment, headwinds from ongoing cloud migrations, and late entry to the hyperconverged space," he wrote. Shares have gained 50% in 2017, while the S&P 500 has gained about 15%.

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Biotech Arsanis prices IPO at $10, below $15 to $17 price range

Thu, 11/16/2017 - 09:34

Arsanis Inc. priced its initial public offering at $10 late Wednesday, well below its $15 to $17 price range. The clinical-stage biotech sold 4 million shares to raise $40 million. Underwriters have the option to buy up to 600,000 additional shares at the offer price to cover over-allotments. The shares are expected to start trading later Thursday on Nasdaq, under the ticker symbol "ASNS".

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U.S. stocks open higher after two days of losses

Thu, 11/16/2017 - 09:32

U.S. stocks were trading higher shortly after the opening bell on Thursday, with the main indexes attempting a rebound after two sessions of losses. The S&P 500 opened 11 points, or 0.4%, higher at 2,576. The Dow Jones Industrial Average was up 132 points, or 0.6%, to 23,403. The tech-heavy Nasdaq Composite index advanced 41 points, or 0.6%, to 6,747. Among the best performers on Wall Street, shares of Cisco Systems Inc. jumped after the maker of networking equipment late Wednesday delivered better-than-expected quarterly results and an encouraging outlook. Shares of Wal-Mart Stores, Inc. also rallied, after earnings came in ahead of expectations.

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Fed must pay attention to trend toward older population, Mester says

Thu, 11/16/2017 - 09:10

Demographic change in the U.S. will result in a slower-growing and older population and the Federal Reserve must be alert to the impact of this transition on economic growth and interest rates, said Cleveland Fed President Loretta Mester on Thursday. In a speech to the Cato Institute in Washington, Mester said it was still not clear whether the coming demographic change would put upward or downward pressure on interest rates. People want to reduce their exposure to risk as they age so there would be downward pressure on low risk or risk-free rates. But there would also be upward pressure on interest rates from dissaving as people draw down their savings and sell assets to fund their retirement, and as the government boosts spending on retiree benefits.

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Hess announces $500 million stock repurchase and debt reduction programs

Thu, 11/16/2017 - 09:00

Hess Corp. announced Thursday a $500 million stock repurchase program, to be completed in 2018, as part of its plan for the use of proceeds from asset sales. The energy company also said it would reduce debt by $500 million, increase the number of Bakken rigs to six from four in 2018 and prefund oil development in Guyana. The company has announced this year $3.4 billion in asset sales and the release of $1.3 billion of asset retirement obligations. Hess made the share buyback and debt reduction announcement in a presentation at the Bank of America Merrill Lynch 2017 Global Energy Conference. The stock, which edged up 0.3% in light premarket trade, has plunged 29.9% year to date through Wednesday, while the SPDR Energy Select Sector ETF has lost 10.6% and the S&P 500 has rallied 14.6%.

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