DAILY MARKET REPORTS
- U.S. stocks slipped on Monday, weighed by losses in financial stocks as earnings from Wall Street’s big banks Goldman Sachs and Citigroup failed to impress.
- Goldman shares slipped 2.4% after the bank reported first-quarter profit tumbled, hit by quiet trading and underwriting.
- Citigroup shares fell 1%, weighed down by a worse-than-expected slide in revenue.
- Analysts expect S&P 500 companies to show a 2.3% year-on-year decline in earnings, their first annual contraction since 2016.
- In a bright spot, the healthcare sector rose 0.2%, bouncing back from a rough week, led by a more than 1% gain in UnitedHealth, CVS Health and Anthem.
- Among other stocks, Waste Management rose 2.2% after the company said it would buy smaller rival Advanced Disposal Services for about $3 billion.
US FINANCIAL MARKET
Goldman’s Profit Falls 21% as Trading Slows
- Goldman posted a quarterly profit of $2.25 billion on revenue of $8.81 billion.
- Both are lower than a year ago, when a newly amped-up market generated outsize trading fees.
- Expenses were down 11% from a year ago, led by a 20% cut in pay and lower brokerage and exchange fees, which are usually tied to trading activity.
- Trading revenue fell 18% to $3.61 billion compared with a year-ago quarter.
- Goldman’s investment–banking revenue was flat from a year ago at $1.81 billion.
- Goldman’s money-management unit posted revenue of $1.56 billion, down from a year ago, while assets it manages or advises on rose to a record $1.6 trillion, as the market recovered from a late-December swoon.
Citigroup’s Profit Lifted by Consumer Banking
- Citigroup’s first-quarter profit rose 2% from a year ago, boosted by growth in U.S. consumer banking and solid trading performance compared with rivals.
- The bank posted a quarterly profit of $4.7 billion.
- Revenue was $18.6 billion, down 2% from $18.9 billion a year ago. Analysts expected $18.6 billion.
- Trading revenue fell 5% to $4.3 billion.
- Fixed-income business rose 1% from a year ago to $3.5 billion.
- Investment-banking revenue rose 20% from a year ago, to $1.4 billion, thanks to a 76% surge in mergers-and-acquisitions advisory revenue.
- U.S. consumer-banking revenue of $5.2 billion was up 4% from a year earlier, after adjusting for the sale of a co-brand credit-card portfolio.
- The bank’s proprietary U.S. credit-card unit was up 5% from a year ago, to $2.2 billion.
- The bank’s expenses were $10.6 billion for the first quarter, down 3% from a year ago.
American Joins Southwest in Extending Flight Cancellations as Jet-Grounding Drags On
- The grounding of Boeing’s 737 MAX jetliners continues to ripple through the airline industry, with two airlines now extending flight cancellations into August as efforts to fix the planes are beset with delays.
- American Airlines said Sunday that it will cancel MAX flights through Aug. 19.
- Southwest, which has the biggest fleet of MAX jets, has pulled the plane from its schedules until Aug. 5.
- Together, the two airlines will be cutting an average of 275 flights a day.
- While some airlines initially expected to see nearly 400 grounded jetliners back in service by later this month or early May, some are anticipating the jets could be out of service for most or all of the summer.
- In terms of percentage, the figures are relatively small.
- Southwest, for example, said the grounding has so far affected just 4% of its passengers, and American said the summer cancellations affect 1.5% of daily flying.
Waste Management to Buy Advanced Disposal Services for About $2.9 Billion
- The companies said the offer of $33.15 a share comes out to a premium for Advanced Disposal shareholders of 22.1% based on the company’s closing price Friday.
- The deal brings together the No. 1 and No. 4 companies in the sector and is Waste Management’s biggest acquisition ever.
- The companies said the enterprise value of the deal is $4.9 billion.
- That includes about $1.9 billion of net debt from Advanced Disposal, they said.
Catalent to Buy Paragon Bioservices for $1.2 Billion
- Contract drug manufacturer Catalent said Monday it has agreed to acquire Paragon Bioservices Inc. for in $1.2 billion in cash, to help expand its gene-therapy manufacturing capabilities.
- Paragon provides supplies for gene-therapy drugmakers, manufacturing the so-called viral vectors that are used to deliver the gene replacements to their targets. It is backed by private-equity firms Camden Partners and NewSpring Capital.
FDA pulls up Walmart, Kroger, others for selling tobacco to minors
- The U.S. Food and Drug Administration (FDA) said on Friday it has sent letters to Walmart, Kroger and 10 other convenience store chains for selling tobacco products to minors.
- In the letters, dated April 5, the FDA asked the companies to submit a plan of action within 30 days, describing how they will address and mitigate illegal sales to minors.
Best Buy, After Turnaround, to Switch Leaders
- Best Buy’s leader, Hubert Joly, will step aside as chief executive, after leading the turnaround of an electronics retailer that many thought would suffer the same fate as other big-box chains facing Amazon.com.
- Mr. Joly, an outsider who joined the retail chain in 2012, will hand over the CEO job to finance chief Corie Barry in June.
- Ms. Barry will be one of the few women and one of the youngest to lead an S&P 500 company.
- Mr. Joly will serve as executive chairman and remain an employee.
Caesars to Name Anthony Rodio as CEO
- Caesars is preparing to name Anthony Rodio as its next chief executive and say it will evaluate takeover interest in the casino operator, people familiar with the matter said.
- Mr. Rodio, who currently serves as CEO of privately held Affinity Gaming, will replace departing Caesars CEO Mark Frissora and take his seat on the board, Caesars is expected to announce Monday.
World’s largest plane makes first flight over California
- The world’s largest aircraft took off over the Mojave Desert in California on Saturday, the first flight for the carbon-composite plane built by Stratolaunch Systems, started by late Microsoft co-founder Paul Allen, as the company enters the lucrative private space market.
- The white airplane called Roc has a wingspan the length of an American football field and is powered by six engines on a twin fuselage.
- The company seeks to cash in on higher demand in coming years for vessels that can put satellites in orbit, competing in the United States with other space entrepreneurs and industry stalwarts such as Elon Musk’s SpaceX and United Launch Alliance – a partnership between Boeing and Lockheed Martin.
Trading Activity Stalls as Stocks Approach Records
- About 6.2 billion shares a day changed hands last week on NYSE and Nasdaq exchanges, the lowest weekly average volume figure since the end of August.
- It marked just the second time since the start of September that the weekly average came in below 6.5 billion shares.
- The muted activity came even as the S&P 500 rose to a fresh six-month high and pulled closer to a record.
- Analysts say that trend reflects investor caution as uncertainty about trade talks and a mixed economic backdrop cloud the outlook for stocks. In another similar sign, billions of dollars continue to flow out of stock mutual and exchange-traded funds, according to data from fund tracker EPFR Global.
US ECONOMY & POLITICS
New York Fed’s Factory Outlook Dims Even as Main Gauge Picks Up
- The Empire State survey of expectations six months ahead fell 17.2 points to 12.4, the lowest level in more than three years and the second lowest level since the recession, according to a Federal Reserve Bank of New York report Monday that also showed weaker outlooks for new orders and shipments.
- The main index rose from a nearly two-year low, climbing 6.4 points to a four-month high of 10.1.
Trump’s Fed Attacks Cast a Chill at Global Finance Gathering
- The central bankers said they are concerned the GOP president’s approach could erode nonpartisanship in the Fed’s boardroom over the long run.
- They cited that longstanding tradition as part of the reason the Fed is a global role model for apolitical policy-making.
EUROPE & WORLD
German prosecutors charge former VW CEO Winterkorn with fraud
- German prosecutors charged former Volkswagen boss Martin Winterkorn with fraud on Monday over his role in the carmaker’s manipulation of diesel emissions testing, more than three years after the scandal came to light.
- The German case comes nearly a year after the United States filed criminal charges against Winterkorn, accusing him of conspiring to cover up the German carmaker’s diesel emissions test cheating.
At the IMF, Germany Comes Under Pressure to Stimulate Growth
- With the global economy slowing and showing signs it may need support, economists are pointing fingers at Germany and a few other countries that are in a position to provide a lot of stimulus but are choosing not to.
- What stimulus measures policy makers can use to support their flagging economies was a key issue during weekend meetings at the MF in Washington.
- In its annual report on global fiscal policies, the IMF singled out Germany, Korea and Australia as places where fiscal stimulus could make sense. Earlier this month, the IMF called on Switzerland to ramp up public spending.
- Countries with a budget surplus “should certainly make use of it and have the space to invest and to participate in the economic development and growth,” IMF Managing Director Christine Lagarde said, “but not enough has been done on that front.”
Publicis pays $4.4 billion for Epsilon to extend digital reach
- Publicis will pay $4.4 billion to acquire Alliance Data’s Epsilon marketing unit, the French advertising group said on Sunday, expanding its digital business and North American footprint.
- Publicis and other traditional advertisers have lost ground in a marketplace increasingly dominated by Facebook, Alphabet’s Google and digital marketing specialists that track and target individual clients via their smartphones, while navigating tougher data-protection laws.
Canada Business Sentiment Softens as Economy Slows; Loonie Falls
- The Ottawa-based central bank’s first-quarter survey of executives — which took place in February and March — showed soft expectations for sales along with a sharp decline in the number of companies reporting labor shortages.
TODAY in HISTORY
- Titanic sank off the coast of Newfoundland on its maiden voyage after it struck an iceberg (1912)
- Ray Kroc acquired McDonald’s and opened his first restaurant in Des Plaines, Ill., today the official McDonald’s Corporate Museum (1955)
- Two bombs exploded at the Boston Marathon in Boston, Massachusetts, killing 3 and injuring at least 170 others (2013)
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