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U.S. STOCKS RISE AS MARKETS TRY TO STABILIZE

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DAILY MARKET REPORTS

  • U.S. stocks climbed Wednesday, while investors continued to digest the sudden return of volatility to major indexes around the world.
  • The moves followed a volatile session Tuesday that saw the blue-chip index change direction 29 times before finishing with large gains.
  • The CBOE Volatility Index, or VIX, known as the “fear gauge” for the U.S. stock market, edged down after briefly Tuesday hitting its highest intraday level since 2009.
  • Many asset managers are confident the selloff has been a one-off event because the global economy continues to grow at a robust pace and strong corporate earnings still make stocks attractive.
  • On Wednesday, the yield on the benchmark 10-year U.S. Treasury note edged down to 2.798%.

US FINANCIAL MARKET

Disney profit beats estimate on strength in parks business

  • Walt Disney reported a quarterly profit that beat Wall Street forecasts as theme park crowds made up for declines at broadcast and cable television.
  • Revenue rose 3.8 percent to $15.4 billion. Analysts on average had expected revenue of $15.46 billion.
  • For the quarter, Disney reported net income of $4.42 billion.
  • Profit at the media networks division fell 12%t which saw lower advertising revenue and higher production cost write-downs.
  • The theme parks division generated $1.3 billion in operating income for the quarter, and the conglomerate recorded a $1.6 billion gain due to recent changes to the U.S. tax law.
  • The company announced that ESPN Plus, ESPN’s streaming option, will be priced at $4.99 a month.

Snap’s user growth, revenue beat analyst expectations

  • Snap added more users than expected to its Snapchat messaging app as it fights to fend off competition from Facebook’s Instagram.
  • Snapchat’s daily active users rose to 187 million from 178 million in the third quarter, beating analysts’ average expectation of 184.2 million users.
  • Revenue rose 72 percent year-over-year to $285.7 million. Revenue per user rose 46 percent from a year earlier to $1.53, while cost of revenue per user rose 5 percent to $1.02.
  • The company posted a net loss of $350 million compared to a loss of $170 million a year earlier.

Chipotle restaurant sales rise slightly after price increases

  • Chipotle Mexican Grill reported a slightly better-than-expected rise in sales at established restaurants, boosted by menu price increases.
  • Revenue jumped 7.3 percent to $1.1 billion, to match Wall Street’s view.
  • Sales at Chipotle restaurants were up 0.9 percent for the fourth quarter. Analysts had expected a gain of 0.7 percent.
  • Net profit was $43.8 million up from $16 million a year earlier.

Gilead Q4 hepatitis C drug sales plummet

  • Gilead Sciences said fourth-quarter sales of its flagship hepatitis C drugs fell by more than half amid increased competition and forecast a further slowdown in the current year.
  • The drug maker posted revenue of $5.95 billion in the period, which topped Street forecasts.
  • Quarterly sales of hepatitis C drugs totaled $1.5 billion, down from $3.2 billion a year earlier, but in line with analysts’ forecasts.
  • The company’s antiviral and HIV drug sales rose to $3.7 billion from $3.4 billion.
  • For 2018, the biotechnology company forecast product sales of $20 billion to $21 billion, down from $25.7 billion last year.
  • The company also projected a 2018 tax rate of 21 percent to 23 percent.
  • Including a $6 billion income tax charge related to U.S. corporate tax changes, the company posted a fourth-quarter net loss of $3.87 billion.

Hasbro posts surprise revenue drop as Star Wars toys fail to shine

  • Toymaker Hasbro reported a surprise fall in quarterly revenue due to a decline in sales of its toys based on the Star Wars franchise and the lingering impact of the bankruptcy of retailer Toys ‘R’ Us.
  • The toy industry was jolted by the retailer’s collapse last October, forcing Hasbro, rival Mattel and other toy makers to find other outlets for sales during the all-important holiday season.
  • The company’s revenue fell 2.1 percent to $1.6 billion, while analysts had expected it to rise to $1.72 billion.
  • Hasbro reported a net loss of $5.3 million in the fourth quarter due to a $296.5 million charge related to the U.S. tax overhaul.
  • A year earlier, the company posted profit of $192.7 million.

Humana’s quarterly profit, 2018 forecast top estimates

  • Health insurer Humana reported a higher-than-expected quarterly profit due to strength in its Medicare Advantage business and it forecast 2018 earnings that came in above analysts’ estimates.
  • Humana, which raised its quarterly dividend by 25 percent, forecast 2018 adjusted earnings of $13.50-$14.00 per share, ahead of analysts’ average estimate of $12.87 per share.
  • Total revenue rose 2 percent to $13.19 billion.
  • Net profit was $184 million in the fourth quarter, compared with a loss of $401 million a year earlier.
  • The company’s medical benefit ratio, the percentage of premiums spent on claims, improved to 83 percent from 89.2 percent a year ago.

Carlyle Earnings Boosted by Investment Growth and Fees

  • Carlyle Group posted a fourth-quarter profit, helped by an upswing in fee-related earnings and strong growth in the value of its investments.
  • The asset manager reported earnings of $52.9 million compared with a loss of $8.9 million in the year-earlier quarter.
  • Economic net income, a closely watched performance measure that reflects changes in the value of the firm’s holdings, rose to $366.4 million from $5.6 million a year earlier.
  • Carlyle’s assets under management climbed to $195.1 billion from $157.6 billion a year earlier and $174.4 billion in the third quarter.

Casino magnate Steve Wynn quits as CEO after sexual misconduct claims

  • The company said it was appointing Matt Maddox, its president since 2013, as chief executive, effective immediately.
  • Maddox, who has been with Wynn Resorts since it was founded in 2002, is seen as a firm hand and is widely viewed as a favored protege of Wynn.
  • Wynn, 76, has denied the accusations published by the Wall Street Journal as “preposterous” and said they were instigated by his ex-wife, an accusation that a representative for Elaine Wynn has denied.

Goldman in talks with Apple to finance iPhone sales

  • Goldman Sachs is in talks to offer financing to shoppers buying Apple products including iPhones.
  • Buyers of a $1,000 iPhone X could take out a loan from Goldman instead of charging it to credit cards that often carry high interest rate.
  • Talks between the iPhone maker and the Wall Street bank are preliminary and ongoing.

SpaceX Launches World’s Biggest Rocket

  • Space Exploration Technologies successfully launched the Falcon Heavy rocket Tuesday on its initial test flight.
  • The 230-foot rocket, which featured 27 engines with the combined thrust of some 18 Boeing Co. 747 jumbo jets, climbed into clear skies at 3:45 p.m. local time.
  • It carried a Tesla roadster as a dummy payload and publicity stunt.
  • Given President Donald Trump’s official policy of combining federal and private assets to explore the Moon, Mr. McCurdy called the SpaceX rocket “a very important step in that direction.

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US ECONOMY & POLITIC

Mortgage volume stalls as rates rise to the highest level in four years

  • Total mortgage application volume barely moved last week, up just 0.7%.
  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to its highest level since April 2014, 4.50 percent, from 4.41 percent.

Congress rushes to strike a deal as it stares down another government shutdown

  • Congressional leaders are moving closer to a long-term spending bill with the clock ticking down to what would become the second partial U.S. government shutdown in less than a month.
  • Congress faces a deadline at the end of Thursday to fund the government or face another partial shutdown.
  • A deal would likely increase defense spending to appease Republicans, and boost domestic spending by nearly as much to meet Democrats’ demands.

U.S. solar industry lost nearly 10,000 jobs in 2017

  • The U.S. solar industry lost nearly 10,000 jobs last year, led by steep losses in mature markets like California and Massachusetts where installation growth has slowed.
  • Nationwide, solar employment fell 3.8 percent to 250,271 jobs in 2017 from a high of 260,077 in 2016.
  • U.S. solar installations fell in 2017 after logging a record-breaking year in 2016 as developers raced to take advantage of a federal tax credit that was meant to expire that year.
  • Overall solar employment is expected to resume growth next year with projected employment of more than 263,000 by the end of this year, an increase of 5 percent.

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EUROPE & WORLD

Britain’s Tesco faces record $5.6 billion equal pay claim

  • Supermarket group Tesco is facing a potential bill of up to 4 billion pounds ($5.6 billion) in a record equal pay claim involving mainly women workers at its British stores
  • Law firm Leigh Day said the mainly male employees in Tesco’s distribution centers were paid considerably more than its largely female store workers.
  • The law firm is also working on claims against supermarket rivals Asda, the British arm of Walmart, and Sainsbury’s, which date back to 2012 and 2015 respectively.
  • Tesco is Britain’s biggest retailer and its largest private sector employer with more than 310,000 staff.

Sanofi’s return to profit growth this year slower than hoped

  • Sanofi forecast a return to profit growth this year, but its shares fell as analysts had hoped for a bigger boost from recent deals and a revamped drugs pipeline.
  • Total sales rose 4.1 percent to 8.7 billion euros.
  • Sanofi’s fourth-quarter business net income fell 10.8 percent at constant exchange rates to 1.33 billion euros.
  • Analysts had on average been expecting business net profit of 1.46 billion euros and net sales of 8.7 billion.
  • France’s largest drugmaker also said net profit in the fourth quarter of 2017 was hit by an impairment of 87 million euros ($107 million) related to Dengvaxia, its dengue vaccine at the center of a health scare in the Philippines.
  • The company predicted earnings per share (EPS) growth of 2-5 percent at constant exchange rates this year, after a 0.4 percent drop in 2017.

Spotify generates third quarter revenue of $1.2 billion: The Information

  • Music streaming service Spotify had revenue of a billion euros ($1.24 billion) in its third-quarter, putting it on track for a full year revenue of more than 4 billion euros ($4.95 billion).
  • The company had an operating loss of between 70 million and 90 million euros in its third quarter.
  • Spotify, which was valued at as much as $19 billion last year, said in June that it had more than 140 million active users while listing more than 30 million songs.

Mazda third quarter profit jumps on weak yen, U.S. sales remain sluggish

  • Japan’s No.5 automaker posted an operating profit of 30.6 billion yen ($280.3 million) in October-December, jumping from 13.64 billion yen a year ago.
  • Sales in the United States, which accounts for about 20 percent of global sales, fell 12 percent on the year to 70,000.
  • Mazda kept intact its full-year global vehicle sales forecast at 1.6 million vehicles, but lowered its full-year U.S. sales forecast to 302,000 vehicles.
  • It is also expecting lower sales in Japan, but raised its sales forecast for China to 308,000 units, up 16 percent from last year.

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TODAY in HISTORY

  • The 11th Amendment to the Constitution was ratified. (1795)
  • The Beatles arrived in the U.S. for the first time. (1964)
  • Women in Switzerland were finally granted suffrage. (1971)
  • The Communist Party of the Soviet Union allowed other parties to compete for power. (1990)

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S&P 500, are unmanaged and may not be invested into directly. Sources: Reuters, Bloomberg, Wall Street Journal.

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