On The Fly: Stocks end week lower after a three-day rally
Stocks finished higher for the week, but drifted lower on Thursday and Friday as investors assessed valuations following a three-day rally driven by optimism that the Federal Reserve will not raise interest rates in the near term. MACRO NEWS: In the U.S., the NAHB housing index rose to 65 for September. Housing starts dropped 5.8% to a 1.142M rate in August. A divided Federal Reserve decided to leave interest rates unchanged as it awaits more evidence of progress toward its goals, but strongly signaled that it could still tighten monetary policy by year-end. Three Fed members voted against not raising rates. Existing home sales fell 0.9% to a 5.33M rate in August. The leading index declined 0.2% to 124.1 in August. The FHFA home price index climbed 0.5% in July to 236.1. Initial jobless claims were down 8,000 to 252,000 in the week ended September 17. The Chicago Fed national activity index dropped to -0.55 in August. Markit's manufacturing PMI fell 0.6 points to 51.4 in the flash September print. In Europe, the Eurozone PMI fell to 52.6 in September. In Asia, the Bank of Japan left its main interest rates unchanged in negative territory, but said it is shifting the focus of its monetary policy from expanding the money supply to controlling interest rates. The BOJ introduced an interest-rate target for 10-year government bonds, committing to keep them around zero, and said it would continue quantitative easing until inflation "exceeds" its 2% target. Japan's flash manufacturing PMI rose to 50.3 in September. COMPANY NEWS: Shares of Sarepta Therapeutics (SRPT) started the trading week on the rise after the FDA granted accelerated approval for Exondys 51 for the treatment of Duchenne muscular dystrophy... Tesla (TSLA) disclosed that shareholders have filled four lawsuits challenging the proposed merger with SolarCity (SCTY)... Wells Fargo (WFC) was in the spotlight on Tuesday as its CEO John Stumpf testified about the bank's scandal before a U.S. Senate committee. Stumpf apologized profusely for the opening of fake accounts in his testimony. The executive's continued employment was one of issues addressed during the hearing, with Massachusetts Senator Elizabeth Warren calling for the CEO's resignation... Sinclair Broadcast Group (SBGI) cut its third quarter media revenue guidance, citing lower than expected political advertising spending... SeaWorld Entertainment (SEAS) cut its next quarterly dividend and suspended subsequent dividends after the October payment... Apple (AAPL) allegedly has approached McLaren Technology Group to discuss a potential takeover or a strategic investment in the British supercar maker, according to reports from The Financial Times and New York Times... The Securities and Exchange Commission has charged hedge fund manager Leon Cooperman and his firm Omega Advisors with insider trading, alleging that Cooperman generated substantial illicit profits by purchasing securities in Atlas Pipeline Partners (APL) in advance of the sale of a natural gas processing facility the company owned... Microsoft (MSFT) announced that its board of directors raised its quarterly dividend by 8% to 39c per share and also authorized a new $40B share repurchase program... Target (TGT) announced a new $5B share repurchase program... Viacom (VIA, VIAB) announced that it is reducing its dividend payout, has ended the process of seeking a minority investor in Paramount Pictures, and lowered its fourth quarter earnings forecast. The media giant also said that interim President and CEO Tom Dooley is leaving the company... Yahoo (YHOO) announced that a recent investigation by the company has confirmed that information associated with "at least 500 million" user accounts was stolen in 2014 by what it believes is a state-sponsored actor... Caesars Entertainment (CZR) and the bondholders it has battled for nearly two years reached a framework agreement on a deal to take its operating subsidiary out of bankruptcy... On Friday, shares Twitter (TWTR) jumped after CNBC's David Faber said on air that the company is closer to selling itself after receiving a number of expressions of interest. Salesforce (CRM) and Alphabet's Google (GOOG, GOOGL) are believed to be two of the potential suitors for Twitter, Faber added... Shares of Facebook (FB) ended the trading week lower after reports emerged saying that the company appears to have overestimated a key video metric for two years, upsetting some major ad buyers. In M&A news, Isle of Capri (ISLE) agreed to be acquired by Eldorado Resorts (ERI) for $23.00 per share in cash or 1.638 shares of Eldorado common stock... Infoblox (BLOX) announced it has agreed to sell itself to Vista Equity Partners for $26.50 per share... Allergan (AGN) has agreed to acquire Tobira Therapeutic (TBRA) for a total possible purchase price near $1.7B, consisting of an upfront payment of $28.35 per share and up to $49.84 per share in Contingent Value Rights that may be payable based on successful milestones... Tessera Technologies (TSRA) agreed to acquire DTS (DTSI) for $42.50 per share... WCI Communities (WCIC) agreed to be acquired by Lennar (LEN) in a cash and stock transaction valued at $23.50 per share. Among companies that announced quarterly results this week, Adobe (ADBE), FedEx (FDX), and Bed Bath & Beyond (BBBY) advanced following their reports, while Ascena Retail (ASNA), HNI (HNI), Jabil Circuit (JBL), and Herman Miller (MLHR) declined. INDEXES: The Dow rose 0.78% to 18,261.45, the Nasdaq gained 1.16% to 5,305.75, and the S&P 500 increased 1.19% to 2,164.69.