US FINANCIAL MARKET
- U.S. stocks fell at the open as retailers from Staples to Urban Outfitters slumped on worse-than-estimated earnings and small-cap companies retreated after a two-day rebound.
- Slow start to spring selling season hurts Home Depot sales. Home Depot reported lower-than-expected quarterly sales.
o Home Depot’s sales rose 2.9 % to $19.69 billion in the first quarter. Net income rose to $1.38 billion in the first quarter from $1.23 billion a year earlier. Analysts on average had expected sales of $19.95 billion.
o The company maintained its sales growth forecast of 4.8 % for the year ending January, but analysts were skeptical. Home Depot also raised its full-year earnings forecast.
o The company said it intended to buy back up to $3.75 billion additional shares this year.
- TJX earnings edged up as the retailer reported weaker-than-expected revenue growth that was hurt by negative currency impacts.
o The TJX Companies sales increased 5% to $6.5 billion. Net income was $454 million.
- Staples forecasts fall in sales, shares drop. The company reported its fifth straight fall in quarterly sales. Staples plans to close 140 of its 1,846 stores in North America this year.
o Sales fell nearly 3 % to $5.65 billion in the first quarter.
o Staples’ net income fell 44 % to $96 million in the first quarter.
- Target said the president of its struggling Canadian business will leave the company.
- Credit Suisse fined $2.5 billion after pleading guilty to U.S. tax charge. It was the largest bank in 20 years to plead guilty to a U.S. criminal charge.
o U.S. prosecutors said the bank helped clients deceive U.S. tax authorities by concealing assets in illegal, undeclared bank accounts, in a conspiracy that spanned decades, and in one case began more than a century ago.
- Valeant says improved bid for Allergan will not be all-cash. Valeant plans to announce its improved offer on May 28.
o Valeant on April 22 offered $48.30 in cash and 0.83 of one Valeant share for each Allergan share in a $47 billion unsolicited bid. Allergan rejected the offer on May 12 citing the high stock component and steep cost cut proposals.
- Lockheed-Boeing venture says rocket launch costs lower than claimed by rival, SpaceX, which is suing the U.S. government for shutting it out of the lucrative rocket launch business.
o The venture told reporters that the company was providing rocket launches to the U.S. Air Force and other customers for an average cost of $225 million per launch, far less than the $460 million amount cited by SpaceX.
o The Air Force says it will allow SpaceX to compete for a small number of rocket launch orders once its Falcon 9 rocket is certified to launch military satellites into space.
US ECONOMY & POLITICS
- U.S. Democrats to target companies moving overseas to dodge taxes. A private tax activist group said on Monday that major U.S. corporations are likely saving about $550 billion a year by holding nearly $2 trillion in profits overseas.
EUROPE & WORLD
- Marks & Spencer plans to open 100 stores in India by 2016 instead of 86 as planned last year. The clothing retailer, which runs 40 stores in the country, said its Indian same-store-sales grew 13 % in the fiscal year.
- Thai stocks fell as the army imposed martial law nationwide amid political turmoil.
TODAY in HISTORY
- Christopher Columbus died in Spain (1506)
- North Carolina voted to secede from the Union (1861)
- Charles Lindbergh began the first solo nonstop transatlantic flight, departing from Long Island aboard the Spirit of Saint Louis (1927)
- Amelia Earhart took off from Newfoundland to become the first woman to fly solo across the Atlantic (1932)
Sources: Reuters, Bloomberg.
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.
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