On The Fly: Top stock stories at midday - InvestingChannel

On The Fly: Top stock stories at midday

Stocks opened with minor gains but soon turned mixed, with the Dow lagging due to post-earnings slides in IBM (IBM) and American Express (AXP) along with continued weakness in General Electric (GE). Also weighing on the market, though to a lesser degree, is the potential shutdown of the U.S. government due to the lack of a funding deal. ECONOMIC EVENTS: In the U.S., the University of Michigan consumer sentiment index fell to a 6-month low of 94.4 in the preliminary January report. COMPANY NEWS: Shares of two Dow members – IBM and American Express – are weighing down the blue chip index after releasing their earnings reports last night. IBM reported its first constant currency revenue growth since 2012, but the stock is still down nearly 4% after Big Blue’s FY18 adjusted EPS view of “at least $13.80” fell short of the consensus forecast of $13.92 per share. Meanwhile, Credit Suisse analyst Moshe Orenbuch said that American Express’ core EPS was slightly below his $1.50 estimate as well as the consensus forecast of $1.54. American Express, which guided to FY18 revenue growth of 7%-8% and gave an earnings forecast whose midpoint is nearly in-line with expectations, has slid about 3% this morning… Another Dow member dragging on the index again today is General Electric, which is seeing its tough week continue with another 2% decline. Given General Electric’s current “cash squeeze” and growing liquidity pressures, the company may ultimately be forced to raise equity capital, Deutsche Bank analyst John Inch said in a new note to investors on the stock. MAJOR MOVERS: Among the notable gainers was Acorda Therapeutics (ACOR), which jumped 8% after Bloomberg reported that Biogen (BIIB) and Belgium’s UCB are among the companies considering bids for the company. Also higher was Nike (NKE), which gained 4% after Wedbush analyst Christopher Svezia upgraded the stock to Outperform from Neutral with a $74 price target. Among the noteworthy losers was Inphi (IPHI), which dropped 6% and was downgraded at BofA Merrill Lynch and Morgan Stanley after the company said it sees Q1 remaining “challenging” due to ongoing China slowdown. Also lower was McCormick (MKC), which slid 4% after Deutsche Bank analyst Rob Dickerson downgraded it to Sell and lowered his price target for the shares to $98 from $103. INDEXES: Near midday, the Dow was down 47.99, or 0.18%, to 25,969.82, the Nasdaq was up 21.82, or 0.3%, to 7,317.87, and the S&P 500 was up 4.13, or 0.15%, to 2,802.16.

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