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FedEx shares down after earnings, company pins miss on cyberattack, Hurricane Harvey

Tue, 09/19/2017 - 16:34

Shares of FedEx Corp. fell more than 3% late Tuesday after the logistics company reported fiscal first-quarter earnings below expectations, saying the quarter offered "significantly operational challenges" due to a cyberattack and Hurricane Harvey. FedEx said it earned $596 million, or $2.19 a share, in the quarter, down from $715 million, or $2.65 a share, in the year-ago period. Adjusted for one-time items, the company reported per-share earnings of $2.51, from $2.82 a share a year ago. Revenue rose to $15.3 billion in the quarter, from $14.7 billion a year ago. Analysts polled by FactSet had expected FedEx to report adjusted earnings of $3.09 a share on sales of $15.35 billion. Higher base rates were "more than offset" by reduced revenue and increased expenses resulting from the TNT Express cyberattack, TNT Express integration expenses, higher costs at FedEx Ground, a higher tax rate, and the impact from Hurricane Harvey, the company said in a statement. FedEx did not provide a fiscal 2018 GAAP earnings outlook, and lowered its 2018 adjusted fiscal-year forecast, saying it predicts earnings to be $11.05 to $11.85 a share for fiscal 2018. The earnings forecast before some pension accounting adjustments and excluding expenses related to the TNT Express integration and certain legal matters is $12 to $12.80 a share for fiscal 2018, the company said. The forecasts "assume moderate economic growth and continued recovery from the cyberattack," FedEx said. The shares ended the regular trading session 0.5% higher.

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Adobe results top Street view, shares slip

Tue, 09/19/2017 - 16:19

Adobe Systems Inc. shares slipped in the extended session Tuesday even after the software company topped Wall Street estimates for the quarter. Adobe shares declined 1% to $154.99 after hours. The company reported third-quarter net income of $419.6 million, or 84 cents a share, compared to $270.8 million, or 54 cents a share, in the year-ago period. Adjusted earnings were $1.10 a share. Revenue rose to $1.84 billion from $1.46 billion in the year-ago period. Analysts surveyed by FactSet had estimated $1.01 a share on revenue of $1.82 billion.

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U.S. stocks gain as all three main indexes close at records

Tue, 09/19/2017 - 16:02

U.S. stocks extended gains Tuesday with all three main benchmarks closing at records as the Federal Reserve began its two-day policy meeting where they are expected to finalize the details on the unwinding of its $4.5 trillion balance sheet. The Dow Jones Industrial Average rose 42 points, or 0.2%, to end at 22,373, its sixth straight record finish, while the S&P 500 added 2 points, or 0.1%, to 2,506, logging its fourth record close in a row. The Nasdaq Composite Index also ended at an all-time high, gaining 6 points, or 0.1%, to close at 6,461.

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Health care sector falls as likelihood of ACA repeal rises; UnitedHealth's stock leads Dow losers

Tue, 09/19/2017 - 15:56

The health care sector traded broadly lower Tuesday, amid concerns over the potential effects of the Graham-Cassidy bill, which some analysts say is becoming increasingly likely to repeal and replace the Affordable Care Act. The SPDR Health Care Select Sector ETF shed 0.9% in afternoon trade, with 56 of its 62 components trading lower. Among the XLV's most heavily-weighted components, UnitedHealth Group's stock dropped 1.8% to pace the Dow Jones Industrial Average's decliners. The price decline of $3.61 was shaving 25 points off the Dow, which was up 44 points. Analyst Ana Gupte at Leerink Research said the bill could lead to "greater earnings downside in the near term than previous House and Senate bills for ACA-levered stocks." Among companies that Gupte said are at particular risk, shares of Centene Corp. slumped 4.6% and Molina Healthcare Inc. gave up 6.1%. Elsewhere, shares of Aetna Inc. fell 3.4%, Humana Inc. slid 3.2%, Cigna Corp. declined 1.9% and Anthem Inc. was down 2.0%. Gupte said diversified managed care organizations (MCOs) like Humana and Cigna are more defensive, though exposure should be manageable for UnitedHealth, Aetna and Anthem. The XLV has gained 4.3% over the past three months, while the S&P 500 has tacked on 2.2%.

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Dollar hits 2-week high against Mexican peso in earthquake aftermath

Tue, 09/19/2017 - 15:21

The U.S. dollar hit a 2-week high against the Mexican peso on Wednesday, after an earthquake hit Mexico City. The quake measured 7.1 on the Richter scale. One dollar bought 17.8292 pesos at the intraday high, its highest level since Sept. 5. The pair since retreated to 17.8022 pesos per dollar.

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Mexico City registers 7.1 earthquake: reports

Tue, 09/19/2017 - 15:19

Mexico City has been hit by a powerful earthquake, which has been registered as a magnitude 7.1, according to the US Geological Survey. According to reports the tremors caused "buildings to sway sickeningly on the anniversary of a 1985 quake that did major damage to the capital." Tuesday's earthquake follows a separate quake in Mexico about two weeks ago. The extent of damage or injuries wasn't immediately clear, according to the reports. Mexico's peso fell against the U.S. dollar after reports of the earthquake, with the dollar buying 17.799 pesos.

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Regulator settled with Wells Fargo for 100 times less than law allowed: report

Tue, 09/19/2017 - 15:09

The Consumer Financial Protection Bureau could have fined Wells Fargo $10 billion instead of $100 million last year for the unauthorized customer accounts fraud, Reuters reported Tuesday. The regulator settled for so much less to resolve the matter quickly, according to documents sent to Republican staff on the House Financial Services Committee whose chairman, Representative Jeb Hensarling, released a 929-page report on Tuesday entitled, "Did the CFPB let Wells Fargo 'beat the rap'?" One memo CFPB staff sent to Director Richard Cordray in July 2016 that was included in the report recommended the smaller figure, saying it was enough to act as an effective deterrent and close the matter quickly. CFPB spokesman David Mayorga told Reuters the agency has not had a chance to review the report, but defended its work policing Wells Fargo.

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'Saturday Night Live' sticks with live coast-to-coast airings after viewership boost

Tue, 09/19/2017 - 14:54

Comcast Corp.-owned broadcast network NBC said on Tuesday that its Emmy-winning sketch comedy show "Saturday Night Live" will remain live from coast to coast for its upcoming season, the show's 43rd. The program began testing live coast-to-coast airings in April for the previous season and experienced an 11% bump in viewership compared with the prior season. Each episode of "SNL," starting with the Sept. 30 premiere, featuring Ryan Gosling as host and Jay-Z as the musical guest, will air at 11:30 p.m. Eastern time, 10:30 p.m. Central, 9:30 p.m. Mountain and 8:30 p.m. Pacific. "SNL," after what many contend was one of its best seasons in recent years, won four Emmy Awards, including a win for outstanding variety sketch series. Shares of Comcast have gained 8% in 2017, while the S&P 500 index is up 12% so far this year.

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Mexico ETF falls to session low after earthquake

Tue, 09/19/2017 - 14:45

The largest exchange-traded fund to track the Mexico equity market fell on Tuesday, dropping to its low of the session following an earthquake in Mexico City. The iShares MSCI Mexico Capped ETF fell as much as 0.5% following the quake; it had been trading in more mildly negative territory prior in the session. The strength of the earthquake, as well as the extent to any damage, was unclear. More than 1.8 million shares of the ETF exchange hands in afternoon trading, above its 30-day average of 1.7 million. While the fund has lost 2.1% over the past month, it remains one of the bright spots among single-country funds thus far this year, having risen more than 26%.

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Crocs collaborating with designer Christopher Kane

Tue, 09/19/2017 - 14:45

Crocs Inc. has partnered with British designer Christopher Kane for a collection of limited edition Swiftwater Sandals embellished with rhinestones. The company made the announcement during London Fashion Week, which is now taking place. "Working with Christopher reinforces our belief that Crocs' products are incredibly relevant in today's style arena," said Crocs Senior Vice President of Global Product and Marketing Michelle Poole. "This collaboration is particularly exciting as we expand beyond our classic silhouette into our popular Swiftwater Sandal style." Kane has presented his version of Crocs shoes in the past, including a tiger-print pair that are sold in Crocs stores and at select retailers. Crocs shares are up 0.2% in Tuesday trading, and up 34.6% for the year so far. The S&P 500 index is up 12% for 2017 to date.

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Republican senators strike tentative deal to allow for significant tax cut: report

Tue, 09/19/2017 - 13:13

Two Republican senators have struck a tentative deal to craft a budget that would allow for a significant tax cut, according to a published report Tuesday. Bloomberg said GOP Sens. Bob Corker of Tennessee and Pat Toomey of Pennsylvania had disagreed over allowing a budget that would add to the deficit. But they hammered out a potential path forward with Senate Majority Leader Mitch McConnell, Corker said, according to Bloomberg. Corker did not specify the amount of the tax cut.

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General Electric's stock falls after J.P. Morgan analyst reiterates bearish view

Tue, 09/19/2017 - 13:06

Shares of General Electric Co. sank 1.4% in midday trade Tuesday, after J.P. Morgan analyst Stephen Tusa reiterated his bearish view on the industrial conglomerate, suggesting that just because the stock keeps getting cheaper doesn't make it more attractive. Tusa kept his rating at underweight, which he's had on the stock since May 2016, and his stock price target at $22, which is 8.8% below current levels. He said as the stock's weakness continues, investors and analysts appear to try to create a bullish narrative, based mostly on how far the stock has fallen and underperformed its peers and the broader market, but analysts have been careful not to raise their ratings. "We believe this defines sentiment on the stock, which is somewhere between somewhat negative, and what we would characterize as 'chicken bullish,' with a common theme [that] it's not that bad, understandable in the context of a sector that typically mean reverts," Tusa wrote in a note to clients. "This is essentially a denial that fundamentals could be this bad, and there is nothing that simple cost saves can't take care of, something that was not obvious to the previous 15 years of management." The stock, which closed at a 2-year low of $23.72 on Sept. 11, has tumbled 24% so far this year, while the Dow Jones Industrial Average has climbed 13%.

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Hurricane Irma damage to be as much as $65 billion, CoreLogic says

Tue, 09/19/2017 - 12:24

The damage to property from both flood and wind from Hurricane Irma is estimated to be between $42.5 billion and $65 billion, CoreLogic said Tuesday. Flood loss for residential properties from Hurricane Irma is estimated at $25 billion to $38 billion, of which $20 billion to $30 billion - or 80% - is not covered by flood insurance.

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UnitedHealth's stock slumps to shave 25 points off the Dow's price

Tue, 09/19/2017 - 11:46

Shares of UnitedHealth Group Inc. sank slumped 1.8% in midday trade Tuesday, enough to pace the decliners in the Dow Jones Industrial Average , after the health insurer disclosed that its vice chairman sold about $10 million worth of stock last week. The stock's price decline of $3.64 shaved about 25 points off the Dow's price, which was up 34 points. The stock has not lost 2.6% since it closed at a record of $199.75 on Sept. 1. The company said late Monday in a filing with the Securities and Exchange Commission that Vice Chairman Larry Renfro sold a total of 50,574 shares of UnitedHealth at an average price of $198.1142 on Sept. 15; the shares traded within an intraday range of $197.20 to $199.71 and closed at $198.18 that day. The stock has gained 6.3% over the past three months, while the SPDR Health Care Select Sector ETF has advanced 4.5% and the Dow has tacked on 3.9%.

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Wall Street's 'fear gauge' shakes off Trump's threat to 'totally destroy' North Korea

Tue, 09/19/2017 - 11:12

A measure of volatility and fear on Wall Street late-morning Tuesday was little changed, even as President Donald Trump threatened to destroy North Korea if provoked. The CBOE Volatility Index , known as Wall Street's fear gauge, was down 1.2% at 10.03, hovering around its lowest levels in its history, and far below its historic average of 20. The index, which measures options bets on the S&P 500 index 30 days into the future, typically rises when anxieties in the market escalate, with the indicator used as a measure of volatility and fear, because stocks tend to fall faster than they rise. In a speech to the U.N. General Assembly on Tuesday, President Trump said the U.S. "has great strength and patience," but would "totally destroy North Korea." He also called out Iran, referring to North Korea and Iran as "rogue nations." The Dow Jones Industrial Average was up 0.1% at 22,352, the S&P 500 index was flat at 2,503, while the Nasdaq Composite Index down 0.1% at 6,448. The equity benchmarks failed to move significantly after Trump's bellicose comments, which come on the heels of a number of ballistic missile tests from Pyongyang in recent months, which have heightened geopolitical tensions in the Korean Peninsula. The S&P 500 and the Dow were trading in record territory, while the Nasdaq isn't trading far off its own all-time high.

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Mattel, Hasbro shares bounce sharply as large customer Toys 'R' Us files for bankruptcy

Tue, 09/19/2017 - 10:51

Shares of Mattel Inc. and Hasbro Inc. bounced sharply in morning trade Tuesday, despite the bankruptcy filing of Toys 'R' Us, which was the second-biggest customer of both toy makers in 2016. Mattel's stock climbed 3.2%, after closing Monday at an 8-year low. Toys 'R' Us accounted for 11% of Mattel's sales last year. Hasbro's stock rallied 2.9%, after closing earlier this month at a 7-month low; Toys 'R' Us accounted for 9% of Hasbro's 2016 sales. UBS analyst Arpine Kocharyan wrote in a note to clients that although bankruptcies can be disruptive to industries in the near term, similar cases have not over time impacted toy industry growth, as demand has been picked up by other channels. Meanwhile, Jakks Pacific Inc.'s stock shed 1.8% toward a record low; Toys 'R' Us was Jakks third-largest customer last year, accounting for 9.4% of 2016 sales.

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U.S. stocks hold gains as Trump speaks at U.N.

Tue, 09/19/2017 - 10:43

U.S. stock-market indexes held on to modest gains on Tuesday, trading in record territory as President Trump delivered speech at the United Nations General Assembly. Trump singled out North Korea and Iran as rouge states and called for more economical isolation of these regimes. He also said that if the U.S. "is forced to defend itself for its allies, we'll have no choice but to totally destroy North Korea." The S&P 500 was up 1.8 points, or 0.1%, at 2,505. The Nasdaq Composite index inched 7 points, or 0.1% higher to 6,461. The Dow Jones Industrial Average was up 25 points, or 0.1%, at 22,356.

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South Korea ETFs unchanged as Trump threatens North Korea at United Nations

Tue, 09/19/2017 - 10:39

Exchange-traded funds that track the South Korean equity market were little changed on Tuesday, after President Donald Trump said the U.S. stood "ready, willing and able" to act against North Korea militarily if it threatened the U.S. Speaking at the United Nations, Trump said he would "destroy" the country if necessary, calling it a "depraved" regime whose pursuit of nuclear weapons threatens the world. Military conflict would likely be devastating for the region, but investors didn't seem to fear Trump's words. The iShares MSCI South Korea Capped ETF rose less than 0.1% to $69.88, though it had risen as high as $70.12 earlier in the session. Despite elevated tensions with North Korea throughout the year, the fund is up more than 30% thus far this year. Separately, the Deutsche X-trackers MSCI South Korea Hedged Equity ETF was up 0.1%. Against the U.S. dollar, the South Korean won was unchanged.

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Sprint shares gain 8% on renewed speculation of merger talk with T-Mobile

Tue, 09/19/2017 - 10:20

Shares of Sprint Corp. gained more than 8% during intraday trade on Tuesday after a CNBC report reignited speculation that the mobile company is in talks to merge with T-Mobile US Inc. . Shares of T-Mobile were up more than 3%, and shares of other mobile carriers also saw a bump, with Verizon Communication Inc. shares up nearly 3% and AT&T Inc. shares up close to 2%. In May, a Bloomberg report, citing sources, said that executives at Sprint had "informal contact" with T-Mobile about a possible merger. The wireless industry has become increasingly competitive and crowded, requiring companies to look for acquisition and/or partnership opportunities. Deal talks in the industry had been on hold until April 27 this year due to the government's spectrum auction. Chairman of Sprint-owner SoftBank, Masayoshi Son, and Deutsche Telekom Chief Executive Tim Hoettges, which owns T-Mobile, told investors following the hold to expect talk of industry consolidation, and T-Mobile said it expected to be involved. Shares of T-Mobile are up nearly 12%, while Sprint shares are down about 2% and the S&P 500 index are up close to 12%.

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Apple's price target raised at Morgan Stanley as higher ASPs should boost profits

Tue, 09/19/2017 - 10:00

Shares of Apple Inc. inched up less than 0.1% in morning trade Tuesday, after Morgan Stanley raised its price target, citing an improved profit outlook on the back of that higher average selling prices (ASPs). Analyst Katy Huberty reiterated her overweight rating, but boosted her target to $194, which is more than 20% above current levels, from $182. Huberty said the key takeaway from Apple's product event last week is that ASPs were raised across the product line. She raised her fiscal 2018 earning-per-share estimate to $12.60 from $11.80--the FactSet consensus is $10.89--as high customer loyalty and a stronger U.S. dollar should keep higher prices from hurting demand. "Apple is an aspirational brand offering high quality, innovative products at a premium price," Huberty wrote in a note to clients. "As a result, the company escapes the typical trend of declining prices that drive demand for other devices." the stock has rallied 8.5% over the past three months, while the SPDR Technology Select Sector ETF has climbed 4.9% and the Dow has gained 3.8%.

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