| 2017-01-20 16:47:40|
WMT, BAYRY… 16:47 01/20 01/20/17
On The Fly: Stocks end week mixed as Trump takes office
Stocks ended the week mixed as earnings season continued its ramp up and Donald Trump was sworn in as the 45th President of the United States. MACRO NEWS: In the U.S., the Empire State manufacturing business conditions index came in at 6.5 for January. The Consumer Price Index rose 0.3% in December, with the core rate rising 0.2%. Industrial production rose 0.8% in December. The NAHB homebuilder sentiment index dipped 2 points to 67 in January. The Philly Fed manufacturing index rose 3.9 points to 23.6 in January. Initial jobless claims fell 15,000 to 234,000 in the week ended January 14. Housing starts bounced 11.3% to a 1.23M rate in December. In its latest Beige Book report, the Federal Reserve stated that districts indicated that the economy "continued to expand at a modest pace across most regions from late November through the end of the year." Meanwhile, in her comments at The Commonwealth Club, Fed Chair Yellen said she cannot give the timing of the next hike, but noted the Fed is close to meeting its twin goals... In Europe, U.K. consumer prices rose 0.5% in December. Meanwhile, in a much-anticipated speech in London, U.K. Prime Minister Theresa May committed to placing a final Brexit deal to a vote in both houses of the parliament. In language that indicated a "hard Brexit," the Prime Minister confirmed that Britain would leave the EU single market. The European Central Bank announced that it is keeping its main rates and bond-buying program unchanged despite an uptick in inflation in the Eurozone... In Asia, China's GDP grew 6.8% on-year in the fourth quarter, beating expectations, while industrial production grew 6% in December, below expectations. COMPANY NEWS: Wal-Mart (WMT) announced that it would create about 10,000 jobs in the U.S. this year by opening or remodeling stores and investing in its e-commerce business. In other U.S. jobs news, Bayer (BAYRY) committed to $8B in research and development in the U.S. after meeting with President Donald Trump, according to Reuters. Meanwhile, General Motors (GM) announced that it will also invest an additional $1B in U.S. manufacturing operations... Exxon (XOM) announced that it will more than double its Permian Basin resource to 6 billion barrels of oil equivalent through the acquisition of companies owned by the Bass family of Texas. The company will buy the assets for $5.6B in shares and up to $1B in cash... Target (TGT) lowered its earnings and comparable store sales forecasts for the fourth quarter after its holiday period sales were softer than expected... Gigamon (GIMO) also announced preliminary fourth quarter revenue that missed estimates... Pearson (PSO) issued a profit warning for 2018 and said it plans to sell its stake in the company's Penguin Random House publishing joint venture... J.C. Penney (JCP) and Nike (NKE) announced that they have teamed up to create Nike brand shop environments in over 600 J.C. Penney stores... CSX (CSX) made headlines this week, as the exiting CEO of Canadian Pacific (CP) was said to be joining activist investor and ex-Pershing Square partner Paul Hilal in targeting the company for "a shakeup." The report about Hunter Harrison's deal to take a senior management role at CSX came out via The Wall Street Journal just hours after Canadian Pacific announced Harrison's decision to retire... Forward Pharma A/S (FWP) announced that it has entered into a settlement and license agreement with Biogen (BIIB). The latter will pay the former $1.25B and will also be obligated to pay Forward royalties of up to 10%-20% of net sales of Biogen products, including multiple sclerosis treatment Tecfidera... In M&A news, Clayton Williams Energy (CWEI) will be acquired by Noble Energy (NBL) for $2.7B in cash and stock. Reynolds American (RAI) announced that British American Tobacco (BTI) will acquire the remaining 57.8% of its stock that it does not already own. Eli Lilly (LLY) has agreed to acquire CoLucid Pharmaceuticals (CLCD) for $46.50 per share... According to a report by Bloomberg, the Federal Trade Commission is not satisfied with Walgreens Boots Alliance's (WBA) plan to win approval for its acquisition of Rite Aid (RAD)... Among companies that announced quarterly results this week, Netflix (NFLX), Fastenal (FAST), Check Point Software (CHKP), Procter & Gamble (PG), IBM (IBM), and Skyworks Solutions (SWKS) advanced following their reports, while Morgan Stanley (MS), Progress Software (PRGS), Comerica (CMA), UnitedHealth (UNH), Goldman Sachs (GS), Citigroup (C), Rent-A-Center (RCII), General Electric (GE), and American Express (AXP) declined. INDEXES: For the week, the Dow fell 0.3% to 19,827.25, the Nasdaq declined 0.32% to 5,555.33, and the S&P 500 slipped 0.15% to 2,271.31.
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