HEALTH-CARE SELLOFF PRESSURES STOCKS
- The S&P 500 retreated Wednesday as a slide in health-care stocks dragged indexes lower.
- Italian lenders continued to drive market focus after Sunday’s referendum.
- In government bond markets, the yield on the 10-year Treasury note fell to 2.365% from 2.394% in the previous session.
- In currencies, the euro inched up 0.2% against the dollar to $1.0742.
- Pfizer fell 2.2% after Britain’s competition watchdog fined the drugmaker $107 million for its role in ramping up the cost of an epilepsy drug by as much as 2,600 percent.
- Celgene lost 4% following its announcement that it would not further test a combination of its breast cancer drug Abraxane with chemotherapy.
- Western Digital rose 5% after the data storage maker raised its second-quarter profit and revenue forecasts.
- Dave & Buster’s soared 13.5% following upbeat quarterly results and a raised full-year revenue forecast.
- Wendy’s rose 4% after activist investor Nelson Peltz raised his stake in the burger chain to 23.45%.
US FINANCIAL MARKET
- Oil prices slipped on Wednesday ahead of a U.S. petroleum inventory report and on doubts production cuts promised by OPEC and Russia would be deep enough to end a supply overhang that has weighed on markets for more than two years.
- OPEC and non-OPEC oil producers meet this weekend in Vienna to agree details of the output cut, which targets an overall reduction of around 1.5 million barrels per day (bpd).
- Oil production has been outpacing consumption by 1 to 2 million bpd since late 2014.
- The benchmark index will end 2017 at 2,350 and finish 2016 at 2,210, according to the median forecast of around 40 strategists.
- The S&P 500 is up 8% year-to-date, having gained over 2 percent in the weeks since the election.
- “I’m going to bring down drug prices. I don’t like what’s happened with drug prices,” Trump said.
- U.S. drug giant says it will appeal.
- The U.K.’s top antitrust regulator slapped Pfizer with a record $107 million fine, alleging it overcharged the national health-care system for an epilepsy treatment.
- The CMA said the £84.2 million Pfizer fine was the highest it had ever imposed.
- Sales at established stores rose 5.9%, compared with an increase of 8.8% a year earlier. Analysts expected growth of 2.3%
- Revenue increased 19% to $228.7 million.
- Food and beverage sales grew 13% and amusement and other revenue improved by 24%.
- The company reported a profit of $10.8 million, up from $4.6 million a year earlier.
- The company expects its second quarter revenue to be approximately $4.75 billion compared to its earlier forecast of $4.7 billion.
- Non-GAAP gross margin is expected to be approximately 36%, versus the earlier forecast of approximately 35%.
- The company said it would add 12,000 stores globally by 2021 and target comparable sales growth in mid-single digits and profit growth of 15-20 percent a year.
- Starbucks’s revenue has been growing at an average rate of 12.76 percent over the past five years.
- “While the scope of the potential investment has not been determined, we will announce the details of any plans following the completion of direct discussions between our leadership and the relevant U.S. officials,” it said in a statement.
- The new share repurchase program will be effective at the completion of the company’s previously announced $4 billion share repurchase program, under which it has about $1.3 billion remaining.
- JPMorgan Chase & Co.’s new Sapphire Reserve credit card will reduce the bank’s profit by $200 million to $300 million in the fourth quarter.
- “The card has been doing great” and was embraced by consumers before the bank did any marketing, Dimon said.
- JPMorgan introduced the card in August with a 100,000-point sign-up bonus for customers who spend $4,000 in the first three months.
- The points are worth $1,500 in travel booked through Chase’s website.
- The cards, which carry a $450 annual fee, were in such demand shortly after the launch that the bank temporarily ran out of the metal it uses to make them.
- Most economists are predicting the Fed will raise key interest rates in mid-December, and consensus forecasts call for two more increases next year.
- Rate increases tend to boost a currency, making investment denominated in it generally more attractive because of the prospect of higher interest.
- Another support for the greenback: Republicans plan tax incentives designed to encourage U.S. companies to bring foreign profits back home.
- If companies reinvest a significant share of those dollars, the U.S. economy could strengthen, too, potentially adding to the upward pressure on interest rates.
US ECONOMY & POLITICS
- Job openings were little changed at 5.5 million.
- Over the month, hires and separations were little changed at 5.1 million and 4.9 million, respectively.
- 30-year fixed-rate conforming mortgages averaged 4.27 percent, the highest level since October 2014.
- Interest rates on 15-year fixed-rate mortgages averaged 3.53 percent, their highest since September 2014.
EUROPE & WORLD
- GDP fell 0.5% from previous quarter.
- Decline was driven by slump in construction and government spending.
- The economy grew 1.8% from a year earlier, compared with a forecast 2.2% gain.
- Royal Dutch Shell said it had signed a memorandum of understanding with Iran’s state oil company to explore future ventures, signaling that giant energy companies won’t be deterred by President-elect Trump’s pledge to undo the Iran nuclear deal.
- Shell is the largest company to wade back into Iran since the U.S. and other world powers lifted sanctions in January.
- Total SA of France last month signed a $4.8 billion deal to develop a large gas field in Iran and is negotiating for an oil deal now.
TODAY in HISTORY
Delaware became the first state to ratify the U.S. Constitution (1787)
The U.S. declared war on Austria-Hungary in World War I (1917)
The Japanese attacked Pearl Harbor (1941)
America’s final moon mission, Apollo 17, blasted off from Cape Canaveral (1972)
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