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Dow industrials open lower to start week, threaten first 3-day skid in 7 weeks as GE's stock falls

Mon, 11/13/2017 - 09:37

The Dow Jones Industrial Average on Monday slumped to kick of trade in the week as worries about delays in tax legislation dogged, putting the blue-chips benchmark on the verge of sliding for its third consecutive session. Wall Street investors also followed a restructuring of Dow component General Electric Co. , which slashed its dividend by 50% as the 125-year old conglomerate attempts to refashion itself under newly minted CEO John Flannery. The Dow was down about 70 points, or 0.3%, at 23,353. The average hasn't fallen for more than three successive sessions since the four-day decline ended Sept. 26, according to FactSet data. The S&P 500 index was off 0.4% at 2,775, while The Nasdaq Composite Index retreated 0.4% at 6,724. GE is holding a conference for investors to discuss its plans for revitalizing the company which has been the worst performer in the Dow, down more than 35%.

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GE's stock turns lower as transformation plan includes downbeat profit outlook

Mon, 11/13/2017 - 09:11

General Electric Co.'s stock erased earlier gains to fall 1.6% in the premarket, after the industrial conglomerate unveiled its transformation plan, which included narrowing its focus and cutting its dividend. The stock was up as much as 2.4% earlier in the session. In GE's presentation to investors, the company said it aimed to be "smaller" and "simpler," and will focus on powering the world, transporting people safely and saving lives. As part of its plan, GE said it will cut its board to 12 members from 18 and expects to cut costs by over $3 billion, including over $2 billion in costs in 2018, which is $1 billion ahead of previous targets. GE said it expects 2018 adjusted earnings per share of $1.00 to $1.07, which is below the FactSet consensus of $1.15. Earlier, GE said it was slashing its dividend in half. The stock had closed at a 5 1/2-year low as recently as Nov. 2, and has plunged 35.2% year to date through Friday. In comparison, the SPDR Industrial Select Sector ETF has gained 14.2% this year and the Dow Jones Industrial Average has rallied 18.5%.

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Qualcomm board unanimously reject Broadcom's $70-a-share cash and stock offer

Mon, 11/13/2017 - 08:59

Qualcomm Inc. said Monday its board has unanimously rejected the unsolicited bid from Broadcom Ltd. made last week, saying it "significantly undervalues" Qualcomm relative to its leading position in mobile technology and growth outlook. Broadcom last Monday made an offer to buy Qualcomm in a cash and stock deal valued at $130 billion, including debt. Under terms of the bid, Broadcom would pay $70 a share per each Qualcomm share outstanding, consisting of $60 a share in cash and $10 a share in Broadcom stock. "No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry," Qualcomm Chief Executive Steve Mollenkopf said in a statement. "We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G." Qualcomm shares rose 0.8% premarket on the news, while Broadcom shares fell 0.7%.

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Nektar Therapeutics' stock rockets toward near 17-year high after upbeat trial data

Mon, 11/13/2017 - 08:28

Shares of Nektar Therapeutics soared 26% in premarket trade Monday, putting them on track to open at the highest level seen since January 2001, after the biopharmaceutical company announced over the weekend positive data from a trial of its cancer treatment. The company said Saturday that data from the Pivot-02 phase 1/2 study, designed to evaluate the combination of Bristol-Myers Squibb Co.'s Opdivo with its investigational medicine NKTR-214, demonstrated "important" response rates across the three types of tumors tested. The company said it and Bristol-Myers are now actively enrolling patients in the phase 2 expansion part of the study in five tumor types. Nektar's stock has rocketed 165% year to date through Friday, while Bristol-Myers shares have tacked on 4.1%, the iShares Nasdaq Biotechnology ETF has climbed 18% and the S&P 500 has gained 15%.

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GGP shares jump after Brookfield mounts an acquisition bid

Mon, 11/13/2017 - 08:22

GGP Inc. shares surged nearly 6% Monday morning after Brookfield Property Partners L.P. offered to buy the retail real estate company. Brookfield presented the offer to GGP's board on Saturday. Under the deal, which values the company at $21.8 billion, Brookfield would pay $23 a share, a 3.6% premium to Friday's closing price, in a combination of cash and units. The combined company would be owned about 30% by existing GGP shareholders. GGP shares are down 11.1% in the year to date, reflecting a difficult environment for retail. The S&P 500 , in contrast, is up 15.3%.

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TiVo names Enrique Rodriguez CEO

Mon, 11/13/2017 - 08:05

TiVo Corp. said Monday it has named Enrique Rodriguez as president and chief executive, replacing Thomas Carson who said earlier this year he would retire. Rodriguez was EVP and chief technical officer at AT&T's entertainment group, and has also done stints at Sirius XM , Cisco and Microsoft . TiVo shares were not yet active premarket, but are down 19% in 2017, while the S&P 500 has gained 15%.

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Teva's stock drops after J.P. Morgan downgrades to rare bearish rating

Mon, 11/13/2017 - 08:04

Shares of Teva Pharmaceutical Industries Ltd. shed 2.2% in premarket trade Monday, after the generic drug maker was downgraded at J.P. Morgan to a rare bearish rating, citing concerns over the U.S. generics business and growing debt levels. Analyst Chris Schott cut his rating to underweight, after being at neutral the past 10 months. Only 6% of companies covered by J.P. Morgan analysts have an underweight rating. "While admittedly Teva shares have been under pressure (down 68% in 2017 and 16% since 3Q results), we see an extended road to recovery and no clear fundamental inflection in sight given ongoing challenges in the company's U.S. generics business (which we do not see growing until 2019), Copaxone generic competition, and growing levels of leverage (>5x in 2018 based on our estimates). Last week, Fitch Ratings downgraded Teva's credit rating in "junk" territory. Teva's stock has underperformed its peers and the broader market by a wide margin, as the SPDR S&P Pharmaceuticals ETF has gained 5.7% year to date and the S&P 500 has climbed 15%.

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Valeant issues $750 million in debt to pay down debt

Mon, 11/13/2017 - 07:49

Valeant Pharmaceuticals International Inc. said Monday it was launching a private offering of $750 million worth of notes due 2025, paying 5.500%. The drug maker plans to use the proceeds from the debt offering to repay a portion of term loan facilities due 2022. In comparison, 7-year Treasury notes yielded 2.27% on Friday. Valeant's long-term credit rating is B3 at Moody's, which is in junk territory. Valeant said last week that it was on track to pay down more than $5 billion in debt ahead of its previous February 2018 goal. Valeant's stock slipped 0.5% in premarket trade. It has gained 5.9% year to date through Friday, while the SPDR S&P Pharmaceuticals ETF has tacked on 5.7% and the S&P 500 has climbed 15%.

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Tyson shares rise after earnings and sales beat

Mon, 11/13/2017 - 07:46

Tyson Foods Inc. shares rose 3.9% in Monday premarket trading after the company reported fourth-quarter earnings and sales beat estimates. Net income totaled $394.0 million, or $1.07 per share, up from $391.0 million, or $1.03 per share, for the same period last year. Adjusted EPS was $1.43, beating the $1.35 FactSet consensus. Revenue was $10.1 billion, up from $9.2 billion last year and beating the $9.9 billion FactSet estimate. Tyson brands include Jimmy Dean, Hillshire Farm, Ball Park and its namesake. The company began to divest itself of non-protein businesses during the quarter, part of an effort to focus on protein brands. And the company is integrating AdvancePierre Foods, a recent acquisition, that will provide manufacturing capabilities for sandwiches and prepared foods and increase Tyson's presence at convenience stores, according to a statement from Chief Executive Tom Hayes. The company expects $200 million in savings in fiscal 2018, fiscal year capital expenditures of $1.4 billion, and doesn't plan to repurchase shares until it a net debt of around twice EBITDA (earnings before interest, taxes, depreciation and amortization). Tyson shares are up 13.1% for the last three months, and up 20.2% for the year so far. The S&P 500 index is up 15.3% for 2017 to date.

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Allergan wins FDA approval for use of Vraylar in maintenance treatment of schizophrenia

Mon, 11/13/2017 - 07:45

Allergan plc said Monday it has won U.S. Food and Drug Administration approval for use of Vraylar in the maintenance treatment of schizophrenia. The FDA approved the company's supplemental new drug application for the substance, an antipsychotic that is already approved for the acute treatment of adult patients with manic or mixed episodes stemming from bipolar I disorder and for the treatment of schizophrenia. "Schizophrenia is one of the most challenging mental health disorders to manage -- particularly due to the complexity of patient symptoms, varying response to treatment and high rates of relapse," said Dr. Herbert Meltzer, professor of psychiatry and behavioral sciences at Northwestern Feinberg School of Medicine. "The goal of clinicians is to minimize relapses, which can cause significant personal distress, and can often have serious implications for a patient's health." Up to 70% of patients can experience relapse within one year of treatment without maintenance treatment, he said. Schizophrenia affects about 2.4 million American adults and symptoms include hallucinations, delusions, thought disorders and movement disorders. Allergan shares were flat premarket, but have fallen 18% in 2017, while the S&P 500 has gained 15%.

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GE plans to slash dividend by 50%

Mon, 11/13/2017 - 07:12

General Electric Co. plans to cut its dividend by half, with the conglomerate on Monday saying the move will help its effort to drive up growth and value for shareholders. The dividend would be reduced to 12 cents a share from 24 cents a share, effective with the expected declaration of GE's next dividend in December. "We understand the importance of this decision to our shareowners and we have not made it lightly," said GE Chief Executive John Flannery in a statement. "We are focused on driving total shareholder return and believe this is the right decision to align our dividend payout to cash flow generation." GE was expected to outline plans to focus on three of its biggest business lines, but stop short of a breakup or more radical restructuring. GE shares rose 2.2% to $20.94 a share in premarket trade Monday.

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GE's dividend yield stays above the Dow, industrial peers

Mon, 11/13/2017 - 07:03

General Electric Co.'s stock surged 2% in premarket trade Monday, after the dividend cut announced earlier kept its dividend yield above its peers and the broader market. At the new quarterly dividend rate of 12 cents a share, and based on Friday's stock closing price of $20.49, the new annual dividend rate implies a yield of 2.34%. That's above the implied yield for the SPDR Industrial Select Sector ETF of 1.86% and for the Dow Jones Industrial Average of 2.19%. GE is hosting an investor meeting Monday, in which the company is expected to announce a new business focus. The dividend cut was expected. GE's stock has tumbled 35.2% year to date through Friday, while the industrial ETF has climbed 14.2% and the Dow has run up 18.5%.

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Mattel's stock up 22% premarket following report of Hasbro offer

Mon, 11/13/2017 - 05:31

Shares in Mattel Inc. traded 22% higher in premarket action Monday in the wake of a report late Friday that rival toymaker Hasbro Inc. has made a takeover offer. A Wall Street Journal report on Friday revealed Hasbro's approach to Mattel, saying terms of a potential deal couldn't be learned. Hasbro's stock was not yet active in premarket trading.

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Trump teases trade announcement to be announced Wednesday

Sun, 11/12/2017 - 23:39

Speaking from the Philippines, President Donald Trump on Sunday night teased a "major statement" on trade that he said he'll make Wednesday in Washington. "A lot of things are happening on trade and I'll be announcing pretty much what happened here and also with other meetings, including with China, South Korea and lots of other places," Trump said from Manila, the site of the Association of Southeast Asian Nations summit. "We've made some very big steps with respect to trade, far bigger than anything you know," Trump said, according to pool reports. Trump is winding up a 13-day Asian trip, and made the comments before a meeting with Australia's Prime Minister Malcolm Turnbull and Japanese Prime Minister Shinzo Abe. Trump did not offer any other details as to what might be announced.

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Magnitude 6.5 quake rattles Costa Rica

Sun, 11/12/2017 - 23:07

Costa Rica was rocked by a magnitude 6.5 earthquake Sunday night. The U.S. Geological Survey said the quake was centered just off the Central American country's lightly populated Pacific coast near the city of Parrita. The quake was reportedly felt in the capital, San Jose, about 60 miles away. Costa Rica's Public Safety Ministry reported at least two serious injuries, the Associated Press reported. While power was knocked out in some areas, there were no immediate reports of damage to structures. Earlier Sunday, a magnitude 7.2 quake struck the Iran-Iraq border, killing more than 140.

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'Supergirl,' 'Arrow' producer suspended after sexual harassment claims

Sun, 11/12/2017 - 21:37

Warner Bros. TV Group has suspended a prominent producer of its popular superhero shows over allegations of sexual harassment. Andrew Kreisberg, co-creator of the CW shows "The Flash," "Supergirl," "Arrow" and "DC's Legends of Tomorrow" harassed and inappropriately touched women over a number of years, according to a report Friday night by Variety. Warner Bros. TV Group, a unit of Time Warner Inc. , said in a statement it is taking the claims seriously and conducting an investigation. The Variety report was based on 19 sources, who remained anonymous out of fear of retaliation. Kreisberg denied the allegations to Variety.

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2 Navy SEALs killed Green Beret over embezzlement scheme: report

Sun, 11/12/2017 - 20:54

An embezzlement scheme provided the motive behind the killing of a U.S. Green Beret sergeant at the hands of two Navy SEALs in Mali earlier this year, the Daily Beast reported late Sunday. According to the Daily Beast, Sgt. Logan Melgar discovered that two members of the Navy's elite SEAL Team 6 were pilfering money from a fund meant to pay anti-terrorism informants in the West African country. The two reportedly offered Melgar a cut, but he declined. Melgar died during an apparent altercation on June 4 at the U.S. Embassy in Bamako. The SEALs claimed he was drunk and died of asphyxiation in a training accident, but an autopsy report found no trace of alcohol in Melgar's system, the Daily Beast reported. In October, the New York Times first reported that the two SEALs were "persons of interest" in Melgar's death. No charges have yet been filed.

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Fed's Harker pulls back slightly his support for a December rate hike

Sun, 11/12/2017 - 19:24

Philadelphia Fed President Patrick Harker on Sunday seemed to waver a bit in his support for another interest-rate hike in December. In a speech in Tokyo, Harker said that he has "lightly penciled in" a December move, backing away a bit from the phrase "penciled in" that he had used in in an interview with CNBC last month. In his remarks in Tokyo, Harker called continued low inflation, in the face of the steep decline in the unemployment rate, a "conundrum" for the central bank.

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More than 60 killed in magnitude 7.2 quake along Iran-Iraq border

Sun, 11/12/2017 - 18:43

More than 60 people died after a massive earthquake hit Sunday along the Iran-Iraq border, the Associated Press reported. The quake, which the U.S. Geological Survey measured at magnitude 7.2, was centered near the city of Halabja in northern Iraq at hit at 9:18 p.m. local time. Iranian authorities reported 60 killed and 300 injured across 14 provinces, while Iraqi officials reported six deaths and 200 injuries in their country.

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PayPal suspends TIO Networks unit due to cyber security concerns

Fri, 11/10/2017 - 18:56

PayPal Holdings Inc. has suspended its TIO Networks business due to cyber security concerns, the company said late Friday. PayPal said that it had discovered security vulnerabilities on the TIO platform and that the TIO data security program does not meet PayPal's standards. The PayPal platform is not affected, the company said. "While we apologize for any inconvenience this suspension of services may cause, the security of TIO's systems and the protection of TIO's customers are our highest priorities," the company said in a prepared statement. "We are working with the appropriate authorities to safeguard TIO customers." PayPal acquired TIO in July of 2017 for $174 million, according to FactSet. The Vancouver, Canada-based TIO operates a bill payment platform. PayPal stock is up a fraction in late trading to $74.05, and has gained 87% this year, with the S&P 500 index rising 15%

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