DAILY MARKET REPORTS
- Wall Street’s main indexes rose on Wednesday after the downward revision of U.S. economic growth in the fourth quarter weakened the case for faster increases in interest rates.
- Although major indexes around the world have recovered much of their losses from a big selloff that sent the S&P 500 and Dow into correction territory on Feb. 8, this has been the worst month in at least a year for many stock benchmarks.
- The U.S. Commerce Department said GDP expanded at a 2.5% annual rate, instead of the previously reported 2.6% pace.
- Off-price apparel seller TJX rose 6.5% after reporting upbeat same-store sales.
- Shares of No.2 home improvement chain Lowe’s fell nearly 9% after its quarterly profit and margins missed estimates as it spent heavily to take on competition.
- Celgene fell 6% after U.S. health regulators rejected the company’s application seeking approval of a key multiple sclerosis drug.
US FINANCIAL MARKET
Lowe’s forecasts further squeeze as results disappoint
- Lowe’s profit and margins fell well short of Wall Street estimates as the No. 2 U.S. home improvement chain spent heavily to take on competition in an improving housing market.
- Lowe’s net sales fell nearly 2 percent to $15.49 billion, but topped estimates of $15.33 billion.
- Lowe’s same store sales rose by 4.1 percent in the fourth quarter but its gross margins fell to 33.73 percent, missing analysts’ estimates of 34.27 percent.
- Lowe’s net income fell 12.5 percent to $554 million in the fourth quarter.
- The company also expects full-year same-store growth to slow to about 3.5 percent, from 4 percent last fiscal year.
Express Scripts quarterly profit beats on higher patient claims
- Pharmacy benefit manager Express Scripts reported fourth-quarter profit above Wall Street estimates, benefiting from a rise in patient claims and strong customer retention.
- Revenue rose 2.1 percent to $25.38 billion.
- The company posted a net profit of $2.33 billion in the quarter from $1.43 billion a year earlier.
- The company also forecast a consolidated customer retention rate for 2018 in the range of 96 percent to 98 percent.
TJX same-store sales beat as bargains continue to attract shoppers
- Off-price apparel retailer TJX beat analysts’ estimates for fourth-quarter same-store sales, boosted by discounts that drew shoppers to its Marmaxx and HomeGoods stores during the holiday season.
- Same-store sales rose 4 percent in the reported quarter, beating the average analysts’ estimate of 2.1 percent.
- Net sales rose 15.8 percent to $10.96 billion, beating analysts’ estimates of $10.76 billion.
- Net income rose to $877.3 million in the quarter from $677.9 million a year earlier.
- TJX also raised its quarterly dividend by 25 percent and said it would repurchase about $2.5 billion to $3 billion worth of shares this fiscal year.
Valeant says wait one more year for turnaround
- Valeant told investors earnings and revenue would drop for one more year, before a projected return to growth in 2019.
- Valeant forecast 2018 revenue of $8.10 billion to $8.30 billion. Analysts on average were expecting $8.34 billion.
- Valeant reported net income of $513 million, compared to a loss of $515 million a year earlier, helped by a one-time benefit of $1.32 billion from new U.S. tax laws.
- Revenue fell 10 percent to $2.16 billion, just shy of analysts’ expectations of $2.17 billion.
Square Expenses Rise as It Courts Larger Business Partners
- Total payment volume rose 31% to $17.89 billion in its fourth quarter, with larger merchants accounting for nearly half the company’s total volume.
- Square reported a loss of $15.7 million, compared with a loss of $15.2 million in the same period a year before.
- Overall revenue rose 36% to $616 million.
- The company made $305 million in business loans, 23% higher than a year ago.
Dick’s Sporting Goods Stops Selling Assault-Style Weapons, Raises Age for Gun Buyers
- Dick’s Sporting Goods said it would stop selling assault-style rifles at all of its stores and would no longer sell guns to those under 21 years of age, in the latest corporate response after a gunman killed 17 people two weeks ago.
- The company had previously ended the sales of assault-style rifles following the deadly elementary school shooting in Newtown, at Dick’s stores, but it still sold them at its Field & Stream chain, which has 35 locations.
- In an open letter, Dick’s said it wanted politicians to enact into law many of the policies proposed Wednesday, including the assault-style rifle ban, raising the minimum gun purchase age to 21 and banning high capacity magazines.
U.S. FDA rejects filing for Celgene MS drug, shares fall
- U.S. health regulators have rejected Celgene’s application seeking approval of a key multiple sclerosis drug due to insufficient data, the company announced.
- Celgene shares fell nearly 8 percent after it revealed that it had received a “refusal to file” letter from the Food and Drug Administration (FDA) for its ozanimod for the treatment of patients with relapsing multiple sclerosis.
- Celgene last month had said it expected U.S. approval of ozanimod by the end of this year and planned to file for European approval during the current quarter. The timeline for a U.S. approval decision is now far less certain.
SeaWorld CEO Steps Down as Losses Deepen
- SeaWorld Chief Executive Joel Manby stepped down, as the theme-park operator said its marine parks drew fewer visitors and its losses widened in the latest quarter.
- Revenue fell slightly to $265.6 million as 120,000 fewer people attended the company’s parks during the quarter.
- The company reported a fourth-quarter loss of $20.4 million, compared with a loss of $11.9 million a year earlier.
- In November SeaWorld reported the company’s largest quarterly attendance decline in at least four years, saying its parks logged 730,000 fewer third-quarter visitors.
- Fewer tourists have visited SeaWorld’s properties since a 2013 documentary, “Blackfish,” raised concerns about the company’s treatment of whales and orcas.
Papa John’s Is No Longer the NFL’s Official Pizza
- Papa John’s will no longer be the official pizza of the National Football League, the pizza chain and the league said Tuesday.
- Revenue rose 6.4% to $467.6 million, a quarter typically the biggest for pizza sales.
- But North American same-store sales fell 3.9%, wider than the 3.2% decline expected from analysts polled by FactSet.
- International same-store sales increased 2.6%.
- Papa John’s reported a profit of $28.5 million in the fourth quarter, down from $32.6 million a year earlier.
- For 2018, the company guided North America comparable sales to be flat to down 3% with international comparable sales rising between 3% and 5%.
NFL Partners with Pizza Hut a Day After Split with Papa John’s
- After a falling out with its previous pizza sponsor, Papa John’s, the National Football League announced that Pizza Hut will be the league’s new official pizza sponsor.
- The NFL said that the agreement is for multiple years and “will first unfold” during the draft for this year.
- Pizza Hut, owned by Yum! brands, has over 7,200 restaurants in the U.S. Papa John’s has more than 3,400 locations both in Canada and the U.S.
Amazon Acquires Ring, Maker of Video Doorbells
- The latest deal plays to Amazon’s efforts to control the devices that power smart homes, an area in which it is becoming a dominant player.
- Amazon.com acquired Ring, maker of video doorbells, in a deal valued at more than $1 billion, a person familiar with the transaction said, giving the online giant a bigger foothold in the burgeoning internet business of home security.
- Certain Ring doorbells and cameras already connect with its virtual assistant, Alexa.
- The Ring acquisition also increases Amazon’s threat to Alphabet ’s home automation unit, Nest Labs, which Google acquired for $3.2 billion in 2014.
Amazon will start selling UFC pay-per-view fights
- Amazon is taking another step closer to parity with the big cable providers: It inked a new deal with UFC to sell pay-per-view packages for the organization’s upcoming slate of weekend fights.
- That means you’ll be able to buy UFC fights, including Saturday’s UFC 222, directly through Amazon, and you won’t need to pay through an existing relationship with cable or satellite providers, like Comcast or Dish Network, or watch on a cable channel, like Fox Sports 1.
- You won’t need an Amazon Prime account to watch, either — it’ll just cost you $64.99, and you’ll be able to watch it on all the same devices where you can watch Amazon Prime videos.
US ECONOMY & POLITIC
U.S. GDP Growth Revised Down to 2.5% Pace in Fourth Quarter
- Gross domestic product, a broad measure of the goods and services produced across the U.S., rose at a 2.5% seasonally and inflation-adjusted annual rate in the fourth quarter.
- The agency in January estimated last quarter’s growth rate at 2.6%.
- Output grew 2.5% in the fourth quarter of 2017 compared with same period a year earlier.
- Consumer spending, which accounts for more than two-thirds of U.S. economic output, grew 3.8% in the fourth quarter, matching the first estimate.
- Business investment was slightly weaker than initially reported, growing at a 6.6% rate last quarter versus an originally reported 6.8%.
- Trade deficit sliced off 1.13 percentage points from GDP growth last quarter as imports grew at an upwardly revised 14.0 percent pace.
- Government spending grew at a 2.9 percent rate, revised down from a 3.0 percent pace.
- Inventories increased at a rate of $8.0 billion, instead of the previously reported $9.2 billion pace. As a result, inventories subtracted 0.70 percentage point from GDP growth.
U.S. pending home sales slide 4.7 percent in January
- Contracts to buy previously owned homes unexpectedly declined in January to their lowest level in more than three years, another sign that the housing market appears to be losing some momentum.
- The National Association of Realtors said its pending home sales index dropped to a reading of 104.6, down 4.7 percent from the prior month. December’s index was also downwardly revised to 109.8.
- Compared to one year ago, pending sales were down 3.8 percent to the lowest level since October 2014.
EUROPE & WORLD
India’s Quarterly GDP Increases 7.2%
- India’s economy grew at its fastest pace in more than a year last quarter.
- India’s growth beat economists’ prediction of 6.9% and was significantly stronger than the 6.5% and 5.7% expansion in the preceding quarters.
- China’s economic growth, which had overtaken India’s about a year ago, grew 6.8% last quarter.
- The data showed strength across most sectors, except for mining. Manufacturing output grew 8.1%, farm output grew 4.1% and construction output grew 6.8%, all strengthening from the previous quarter. Services continued to do well, with trade, hotels and transport clocking a 9% expansion. Mining was the lone weak link, with output declining 0.1% following a 7.1% expansion.
China Growth Loses Steam as Factory Activity Slips to 19-Month Low
- The official manufacturing purchasing managers index, a gauge of China’s factory activity, dropped to its lowest level in 19 months at 50.3 in February from 51.3 in January.
- The lower-than-expected reading helped push down Chinese stocks, with the Shanghai Composite Index about 1% lower in midday trading.
- Nearly 14% of the 3,000 Chinese companies surveyed in the government PMI poll said the appreciation of the Chinese currency had hurt their business.
- China’s official nonmanufacturing PMI, also released Wednesday, fell to a four-month low of 54.4 in February, compared with 55.3 in January.
TODAY in HISTORY
- The steamship California landed in San Francisco, bringing the first East Coasters to the Gold Rush. (1849)
- The last British troops left India. (1948)
- James Watson and Francis Crick described their theory that two DNA strands were coiled in a double helix. (1953)
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