US Stocks Slide; AmEx Spikes on Activist Reports
New York (Aug 7) The S&P500 was down 0.69%, and the Nasdaq declined 0.92%. The Dow Jones Industrial Average fell 0.63% and was on track for its seventh straight session of losses.
West Texas Intermediate crude tumbled 1.1% to $44.16 a barrel, putting it on pace for its biggest weekly decline since March. The commodity was selling off after Baker Hughes data showed U.S. oil rigs rise by 6 to a total 670 over the week. The total U.S. rig count, which includes gas rigs, climbed 10 to 884.
American Express (AXP - Get Report) spiked more than 5% in the afternoon session on reports activist fund ValueAct Capital Management secured a $1 billion stake in the credit card company, according to Bloomberg. The reports have not been confirmed.
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The U.S. economy added 215,000 jobs to nonfarm payrolls in July. That fell short of estimates of 225,000, though upward revisions to previous months could accelerate the Fed's rate hike plans. Revisions to the June and May reports added a total 14,000 jobs to overall payrolls over those two months.
The unemployment rate in July remained steady at 5.3%, as expected, while the participation rate held at 62.6%. Average hourly earnings rose 0.2% in July from a month earlier. The year-over-year hourly earnings growth totaled 2.3%.
"This is so consensus it's dull to the eye but is enough to give the Fed a bit greener of a light to go in September simply because this wasn't skewed weaker," said David Ader, chief Treasury strategist at CRT Capital.
RBS analysts agreed. "This is another solid report that, in our view, meets the criteria for 'some further improvement' in labor market conditions and thus will keep the Fed in play in September. The numbers are not strong enough to end the debate, but we remain comfortable with our view that they will take action at that time," said Michelle Girard, chief U.S. economist at RBS.
Groupon (GRPN - Get Report) shares fell more than 6% after the deals site missed analysts' estimates on its top- and bottom-lines. The company earned 2 cents a share, a penny below estimates, while revenue of $738.4 million missed by $1.85 million.
Nvidia (NVDA - Get Report) shares jumped 10% after the chipmaker earned 34 cents a share in its recent quarter, well above estimates of 20 cents. Revenue climbed 4.5% to $1.15 billion.
Zynga (ZNGA - Get Report) added 2.9% after reporting a quarterly loss of a penny a share, half what analysts expected, while sales surged more than 30% to $199.9 million. However, the developer of social games also noted that daily users had plummeted 23% from a year earlier to 21 million.
Lions Gate (LGF) fell 5% after reporting a disappointing decline on the top-line tied to weak performance for its films released and softer home entertainment sales. Motion picture revenue fell 17% to $275.4 million with Age of Adaline its only wide release over the quarter.
Bojangles (BOJA) shares jumped more than 5% after reporting better-than-expected quarterly profit and a double-digit percentage increase in revenue. The chicken chain reported a 4% increase in comparable-store sales while overall revenue climbed 13% to $120.52 million.
GE (GE) is reportedly in exclusive talks with Capital One (COF) to sell its health care finance unit, according to Reuters. The sale is expected to bring in more than $10 billion. GE has been unloading its finance units over the year to focus on its manufacturing and industrial operations.
Best Buy (BBY) has officially begun sales of the Apple (AAPL - Get Report) Watch in its stores and online. The retailer plans to sell 16 models of the smartwatch.
Cheniere Energy (LNG) added more than 2% after activist investor Carl Icahn reported a new 8.18% stake in the company. Icahn said the company's shares are undervalued and is seeking a conversation with management.
Source: TheStreet
