On The Fly: Top stock stories for Friday
Stocks opened higher but turned mixed a short time later when the Nasdaq crossed into negative territory. In a reversal of the recent trend the Nasdaq lagged while the Dow lead, breaking its eight-day losing streak. Oil prices moved higher after the OPEC production bump wound up being less than feared. In the wake of the OPEC agreement, the price of WTI crude rose about 5% and closed near $69 per barrel. ECONOMIC EVENTS: In the U.S., Markit's flash manufacturing PMI dropped 1.8 points to 54.6 in June, versus expectations for a reading of 56.1. The flash services PMI reading of 56.5 matched estimates. In Europe, the overall Eurozone composite flash for June came in at 54.8, versus expectations for a reading of 53.9, with services at 55 and manufacturing at 55. Also of note for the region, President Trump tweeted that based on the tariffs and trade barriers "long placed on the U.S. and it great companies and workers by the European Union," if these tariffs and barriers are not soon broken down and removed, the U.S. will be placing a 20% tariff on all of their cars imported here. In Asia, Japan's flash manufacturing PMI for June ticked up to 53.1 from 52.8 in May. In energy news, Baker Hughes reported that the U.S. rig count is down 7 rigs from last week to 1,052. COMPANY NEWS: Disney (DIS) disclosed in a regulatory filing last night that it is prepared to divest 21st Century Fox (FOXA) assets that yielded up to $1B in EBITDA to secure approval from antitrust regulators. The offer doubles the value of the company's previously offered divestments. Meanwhile, CNBC reported that Comcast (CMCSA) is unlikely to submit its revised bid for the Fox assets next week. CNBC's David Faber noted that Comcast remains likely to come back with a higher bid to counter Disney's... Last evening, the Federal Reserve Board announced the results of the its latest round of supervisory stress tests, stating that the 35 biggest U.S. banks are "strongly capitalized" and would be able to lend to households and businesses during a severe global recession. In addition, the Federal Reserve Board announced that bank holding companies with less than $100B in total consolidated assets are no longer subject to supervisory stress testing. Such banks include CIT Group (CIT), Comerica (CMA), and Zions Bancorporation (ZION) in this year's results and future cycles. Reacting to the "DFAST" tests, Goldman Sachs (GS) said its models and the Federal Reserve's models diverge, meaning the DFAST ratios "may not represent our firm's actual capital return capacity, which may be higher than this year's test would otherwise indicate." In a similar fashion, Morgan Stanley (MS) stated that the DFAST results "may not be indicative of the capital distributions that we will be permitted to make following the release of the CCAR results"... Shares of Red Hat (RHT) fell over 14% after the software company reported quarterly results last night and provided conservative guidance for the second quarter and fiscal 2019... Amazon (AMZN) announced plans for a new fulfillment center to be located in Bessemer, Alabama, which will create 1,500 full-time jobs. MAJOR MOVERS: Among the noteworthy gainers was Williams Scotsman (WSC), which rose 25% after it agreed to acquire ModSpace for roughly $1.1B. Also higher was CarMax (KMX), which gained 12.9% after reporting quarterly results. Among the notable losers was CareDx (CDNA), which slipped 9.5% after Craig-Hallum analyst Alex Nowak said that Natera's (NTR) announcement of a new non-invasive kidney transplant rejection test could be a "headline negative" for its competitor. Also lower was BlackBerry (BB), which fell 8.6% following the company's quarterly report. INDEXES: The Dow rose 119.19, or 0.49%, to 24,580.89, the Nasdaq lost 20.14, or 0.26%, to 7,692.82, and the S&P 500 advanced 3.65, or 0.13%, to 2,753.41.