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Updated: 2 hours 44 min ago

Teva credit rating downgraded to junk status at Moody's

Fri, 01/12/2018 - 15:07

Teva Pharmaceuticals Industries Ltd.'s credit rating was downgraded two notches into junk status at Moody's Investors Service, which cited concerns over the drug maker's sizable debt. The rating agency cut Teva's senior unsecured rating to Ba2 from Baa3, which is the lowest investment grade rating, and assigned a Ba2 corporate family rating. The outlook is stable. "The downgrade of Teva's ratings to speculative grade reflects the challenge of managing its significant debt burden while facing a prolonged period of earnings erosion," said Morris Borenstein, an assistant vice president at Moody's. "While Teva's cost restructuring program will help to partially offset declines, execution risk is high." Teva's credit is also rated junk at Fitch Ratings, but S&P Global Ratings rates it BBB-, which is its lowest investment grade rating. The stock, which rose 2.2% in afternoon trade, has tumbled 34.5% over the past 12 months, while the SPDR S&P Pharmaceuticals ETF has gained 15.7% and the S&P 500 has climbed 22.7%.

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Oil prices settle higher, score fourth weekly rise

Fri, 01/12/2018 - 14:42

Oil prices settled higher Friday for a fifth straight session, as declines in U.S. crude supplies continued to boost prices to their highest in more than three years. Prices also posted a gain for the week, their fourth such rise in a row. News that the Trump administration extended sanctions relief for Iran, as expected, and data showing the first weekly rise in active U.S. oil-drilling rigs failed to squash bullish sentiment. February West Texas Intermediate crude rose 50 cents, or 0.8%, to settle at $64.30 a barrel on the New York Mercantile Exchange. That was the highest finish since Dec. 5, 2014 according to FactSet data. It rose about 4.7% for the week.

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Aflac's stock tumbles to pace S&P 500 losers; insurer says report of fraud and abuse are 'false'

Fri, 01/12/2018 - 14:09

Shares of Aflac Inc. tumbled 7.1% in active afternoon trade Friday, enough to pace the S&P 500's losers, although the insurer said a report that former employees alleged fraud and abuse was "false" and "without merit." Volume spiked to 10.5 million shares, or more than 6-times the full-day average. The stock, which closed at a record $91.69 on Thursday, pared earlier intraday losses of as much as 8.7%. "Recent media stories regarding Aflac contain false allegations made by a very small group of independent contractors. Aflac intends to aggressively fight these allegations beginning with filing for their dismissal," the company said in a statement. A report by The Intercept late Thursday said Aflac exploited workers, manipulated accounting and deceived shareholders and customers, citing multiple current and former employees, as well as three previously unreported lawsuits. In Aflac's response, the company said it has "investigated these claims and found them to be without merit." The stock has run up 22.6% over the past 12 months, while the SPDR S&P Insurance ETF has gained 12.7% and the S&P 500 had climbed 22.7%.

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Gold prices end with 1% weekly gain

Fri, 01/12/2018 - 13:56

Gold futures rose on Friday as weakness in the dollar helped prices finish the week about 1% higher. The ICE U.S. Dollar Index was down 0.8%, poised for a loss of 0.9% for the week. The dollar softened and some "momentum and positioning for next week" may have given gold an "extra boost," said Jeff Wright, chief investment officer at Wolfpack Capital. February gold rose $12.40, or 0.9%, to settle at $1,334.90 an ounce, marking the highest finish since Sept. 11, according to FactSet data. The weekly rise was also gold's fifth in a row.

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Trump extends sanctions relief for Iran

Fri, 01/12/2018 - 13:36

President Donald Trump has extended sanctions relief for Iran, which will keep the Iran nuclear agreement intact for another several months, a senior administration official said Friday. At the same time, the Trump administration announced new sanctions not related to the nuclear agreement, targeting Iranian officials over human-rights abuses. The official said it's the last time Trump will issue a waiver over the nuclear agreement unless the multilateral deal is altered.

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Baker Hughes reports first weekly rise in U.S. oil-rig count in 5 weeks

Fri, 01/12/2018 - 13:15

Baker Hughes on Friday reported that the number of active U.S. rigs drilling for oil climbed by 10 at 752 this week. The oil-rig count had fallen by 5 last week, and it hasn't posted a rise since the week ended Dec. 8. The total active U.S. rig count, which includes oil and natural-gas rigs, also rose by 15 to 939, according to Baker Hughes. February West Texas Intermediate crude was up 15 cents, or 0.2%, from Thursday, to $63.95 a barrel, up a bit from shortly before the rig data, but well below the day's high of $64.23.

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Wheat prices aim for lowest finish year to date as USDA reports higher-than-expected plantings

Fri, 01/12/2018 - 13:01

Wheat futures fell Friday, poised for their lowest finish since late December. The U.S. Department of Agriculture reported that planted acres of winter wheat for 2018 are expected to total 32.6 million acres, down less than 1% from 2017. "U.S. wheat planted acres were higher than expected, actual U.S. feed usage of wheat was down and Russia production was higher than expected, resulting in record wheat exports out of Russia," said Sal Gilbertie, president and chief investment officer at Teucrium Trading LLC. March wheat fell 2.4%, at $4.23 a bushel. Corn futures also fell, with the March contract down 0.5% at $3.47 a bushel. March soybeans added 0.4% to $9.53 a bushel.

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2018 should be 'boring' in terms of Fed policy, Harker says

Fri, 01/12/2018 - 12:30

The U.S. central bank should be able to avoid drama like the infamous "taper tantrum" of 2013, said Philadelphia Fed President Patrick Harker, on Friday. "We've learned the lessons of the past and are being thoughtful and watchful as the year unfolds," Harker said. "While it should be a year of developments, it should also be a boring one," he said. Harker said the Fed has never before faced a need to shrink its balance sheet from $4.5 trillion, but said the process should remain "slow" and "mechanical." The Philadelphia Fed President, who is not a voting member of the Fed's interest-rate committee this year, said he thinks two rate increases this year would be the appropriate path of policy.

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UPDATE: Tesla's new production targets are 'finally beatable', says bullish Instinet analyst

Fri, 01/12/2018 - 10:51

Tesla Inc.'s fourth-quarter deliveries came in below expectations, but progress made in Model 3 production and more realistic production targets left Instinet analyst Romit Shah feeling pretty bullish on the stock. "While our forecasts decrease for the first half of 2018, we are encouraged by the progress on Model 3 production and continue to expect Tesla to deliver substantial (+100%) revenue growth in 2018," Shah wrote in a note published Friday following a series of electric vehicle announcements at this weeks CES show in Las Vegas. "We believe that Tesla may have finally set a beatable production target while also allowing itself to address customer feedback and prioritize quality control." While GM's Chevy Bolt electric vehicle finished the year on a strong note and along with the Nissan Leaf offers the main competition for Tesla, "we believe that these vehicles are in distinctly different classes relative to Tesla's lower to mid-luxury Model 3 sedan," said Shah. On the Byton, the international brand of Chinese EV startup Future Mobility Corp., Shah said Chinese original equipment manufacturers seem best equipped to challenge Tesla, but are likely to focus for now on their huge domestic market and expected growth in the luxury segment. "China remains Tesla's third largest region and second largest country by sales volume, per our estimates," said the analyst, who rates Tesla a buy. Tesla shares were slightly higher on Friday, but have gained 46% in the last 12 months, while the S&P 500 has gained 22%.

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Holiday retail sales increased 5.5% in 2017, exceeding the National Retail Federation forecast

Fri, 01/12/2018 - 10:26

Retail sales during the holiday season rose 5.5% in 2017 to $691.9 billion, exceeding the National Retail Federations forecast of a 3.6%-to-4% increase. The final total represents "the strongest gain since the Great Recession," the group said Friday. The organization credits low unemployment, strong consumer confidence, a rising stock market and income raises for the showing. There were increases across all retail categories except sporting goods, which was down 0.5% year-over year. Building materials and supplies stores were up 8.1%, furniture and home furnishings grew 7.5% and electronics and appliance stores were up 6.7%. The SPDR S&P Retail ETF is up 20.1% for the last three months, outpacing the S&P 500 index, which is up nearly 9%, and the Dow Jones Industrial Average , which is up 12%.

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U.S. business inventories increase 0.4% in November

Fri, 01/12/2018 - 10:04

Business inventories in the U.S. rose 0.4% in November after no change in the prior month, the Commerce Department said Friday. Sales jumped 1.2% in the month. The ratio of inventories to sales, meanwhile, fell to 1.33 from 1.34. That's how many months it would take to sell all the inventory on hand. One year ago, the inventory-to-sales ratio was higher at 1.40, reflecting an excessive buildup in production not matched by sales. Now companies appear to have a better handle on inventories.

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Pound hits highest level since 2016 on report Spanish, Dutch want soft Brexit deal

Fri, 01/12/2018 - 09:43

The pound on Friday reached its strongest level against the U.S. dollar since the June 2016 Brexit referendum, extending gains following a Bloomberg report that Spanish and Dutch finance officials will work toward the EU reaching a so-called soft Brexit deal with the U.K. Sterling hit an intraday high of $1.3693, the highest the June 2016 Brexit referendum that sent the pound tumbling from around $1.50 on the day of the vote. A soft Brexit arrangement would aim to keep U.K. financial and trade as close to the EU as possible after Britain's expected exit from the bloc in 2019. Spanish Economy Minister Luis de Guindos and his Dutch counterpart Wopke Hoekstra met this week and their concerns include losing the U.K.'s contributions to the EU, according to the report.

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Performant's stock rockets after winning contract to collect on defaulted federal student loans

Fri, 01/12/2018 - 09:39

Shares of Performant Financial Corp. rocketed 39% in active morning trade Friday, after the company said it won a new contract to provide collection services on defaulted federal student loans. Volume topped 1 million shares within a minute after the open, compared with the full-day average of about 39,000 shares, according to FactSet. The company said the Department of Education has capped the total award amount for the contract, which runs from Jan. 11, 2018 through Jan. 10, 2023, at $400 million. Performant said it didn't expect to recognize "meaningful" revenue from the contract until nine or tenth months after placements begin, and expect to incur additional expenses in the short term as it prepares initiate services under the new contract. The stock has rallied 21% over the past 12 months, while the S&P 500 has climbed 22%.

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Becton Dickinson says it will provide full response to FDA warning letter by Feb. 1 deadline

Fri, 01/12/2018 - 09:38

Medical technology company Becton Dickinson and Co. said Friday it has received a warning letter from the U.S. Food and Drug Administration relating to its preanalytical systems business unit. The company said it will provide a full response to the regulator by its Feb. 1 deadline. "We take any potential issue with our products very seriously and are cooperating fully with FDA on this matter," Richard Byrd, worldwide president of the preanalytics business said in a statement. "After the FDA inspection in July, we took prompt action that we believed fully addressed the agency's inspectional observations." The FDA said its letter cited several violations of federal law, including the marketing of modified versions of BD Vacutainer blood collection tubes without securing FDA approval and failing to submit medical device reports to the FDA within a required timeframe. "Our inspection showed that BD violated the law by making a significant change to certain devices the company manufactures without notifying the FDA and failing to follow good manufacturing practice requirements," said Donald St. Pierre, acting director of the Office of In Vitro Diagnostics and Radiological Health and deputy director of new product evaluation at the FDA's Center for Devices and Radiological Health. "We are continuing to aggressively investigate this issue, including whether the use of BD tubes led to inaccurate lead test results." Shares were slightly lower Friday, but have gained 30% in the last 12 months, while the S&P 500 has gained 22%.

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Dow opens up 100 points as blue chips try to cap solid week; Nasdaq weighed by Facebook

Fri, 01/12/2018 - 09:37

The Dow Jones Industrial Average and S&P 500 index opened higher on Friday, extending their run into the record books, as fourth-quarter corporate earnings season kicked off. The Dow rose 90 points, or 0.4%, at 25,670, the S&P 500 index climbed 0.2% at 2,771. However, the Nasdaq Composite Index was under pressure, trading flat at 7,213, as Facebook Inc.'s shares fell 4.5% after late Thursday announcing changes to the news feed on its social-network platform. All three benchmarks were on track for weekly gains of at least 1%. Meanwhile, J.P. Morgan Chase & Co. reported a 37% drop in earnings, although this was largely related to one-time charges associated from the new tax law, which is expected to provide further gains over the longer term. Wells Fargo & Co. reported earnings and revenue that came in below consensus analyst forecasts in the fourth quarter.

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Snapchat parent Snap's stock drops after analyst says it's just an 'overvalued chat company'

Fri, 01/12/2018 - 08:49

Shares of Snap Inc. slumped 2.4% in premarket trade Friday, after Raymond James turned bearish on the Snapchat parent, saying it was just an "overvalued chat company." Analyst Aaron Kessler cut his rating to underperform, after starting coverage at market perform in April 2017. He said Snap is largely a chat/messaging app, "which historically don't monetize as well as newsfeeds," and said company has struggled to gain share for its Discover platform, which is viewed as better to monetize. Kessler said user growth is likely to remain challenging, and valuation appears expensive given structural challenges and competitive concerns. Competition includes Facebook Inc.'s Instagram. He said agency checks indicate Snap's platform is still largely experimental and user demographics are less attractive to advertisers. "In our discussions with ad agencies, Snapchat's very young audience is not as attractive to many advertisers given their much lower income levels," Kessler wrote in a note to clients. Snap's stock has tumbled 40.4% since it went public on March 2, 2017 through Thursday, while the S&P 500 has run up 16% over the same time.

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Treasury yields climb after stronger-than-expected rise in core CPI

Fri, 01/12/2018 - 08:41

Treasury yields rose after the December consumer price index came in higher than expected. Core consumer prices showed a 0.3% gain. Economists surveyed by MarketWatch were forecasting a 0.2% increase in the core gauge, which excludes energy and food prices. Higher inflation could dampen demand for bonds and push the Federal Reserve to pursue more aggressive monetary tightening. The 10-year Treasury note yield rose to 2.570%, up from 2.531% late Thursday, according to Tradeweb. The 2-year note yield was up to 2.010%, compared with 1.972%, the first time the short-dated maturity has broken above 2% since 2008. The 30-year bond yield was up slightly at 2.877%, versus 2.863%.

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Wal-Mart to take a charge associated with Sam's Club closures

Fri, 01/12/2018 - 08:33

Wal-Mart Stores Inc. said it will take an approximately 14 cents-per-share discrete charge related to the Sam's Club reorganization that will result in the closure of 63 locations. The "vast majority" of the charge will be in the fourth quarter. After announcing a minimum wage increase and other benefits on Thursday, it was revealed that Sam's Club locations nationwide were closing. Twelve of the 63 shuttered stores will be converted to e-commerce fulfillment centers. There will be 597 clubs remaining. Sam's Club Chief Executive John Furner said the company is working to place as many displaced associates as possible to other locations. About 10,000 jobs will be affected, according to The Wall Street Journal. Wal-Mart will share additional information "as appropriate" when it reports quarterly results on Feb. 20, Wal-Mart shares are up 0.3% in Friday premarket trading and up 47.2% for the last year. The Dow Jones Industrial Average is up 28.6% for the past 12 months.

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GameStop's stock drops after revealing large charge related iPhone X-related woes

Fri, 01/12/2018 - 08:31

GameStop Corp.'s stock tumbled 3.8% in premarket trade Friday, after the gaming products retailer reported a big jump in holiday sales, but said it would take impairment charges of $350 million to $400 million related to its technology brands business. The company said the charges were primarily a result of the negative impact of a longer upgrade cycle for new mobile devices and the changes made by AT&T Inc. to the compensation structure. For the nine-week holiday period ending Dec. 30, GameStop said total rose 10.6% to $2.77 billion and comparable-store sales increased 11.8%, as U.S. same-store sales jumped 18.7%. Within gaming, new hardware sales increased 38.3%, boosted by sales of the Nintendo Switch and the launch of Microsoft Corp.'s Xbox One X, while video game accessories sales grew 33.7% and pre-owned sales declined 8.1%. Technology brands sales fell 18.6%, given the limited availability of Apple Inc.'s iPhone X and changes in AT&T's compensation structure. The company said it expects 2017 earnings per share "near the middle" of the previously provided guidance range of $3.10 to $3.40 and same-store sales growth of between 4% and 6%. The has gained 2.4% over the past three months but has lost 19% the past 12 months. The S&P 500 has rallied 22% the past year.

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U.S. retail sales rise 0.4% in December, and CPI is up 0.1%

Fri, 01/12/2018 - 08:31

WASHINGTON (MarketWatch) -- Sales at U.S. retailers rose 0.4% in December, a fourth straight monthly gain. The increase was a notch below the MarketWatch forecast of 0.5%, but sales for November and October were both revised higher. Excluding automobiles and gasoline, retail sales also rose 0.4% last month. The consumer price index, meanwhile, rose 0.1% in December, with four-fifths of the increase tied to the cost of housing. The increase matched the MarketWatch forecast.

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