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US FINANCIAL MARKET

U.S. Stocks Fluctuate at the Open as Energy Rally Offsets Ukraine

  • Sprint slid 17 percent after a person with knowledge of the matter said it ended talks to acquire T-Mobile US.
  • Time Warner tumbled 11 percent after Rupert Murdoch’s 21st Century Fox withdrew its unsolicited takeover bid for the company.
  • The benchmark gauge tumbled 2.7 percent last week, the most since June 2012.
  • The S&P 500 has soared 184 percent since the start of the bull market in March 2009.
  • The benchmark equity gauge has gone without a 10 percent correction since 2011.
  • It trades at 17.4 times the reported earnings of its companies.
  • About 75 percent of those that have posted results this season have beaten analysts’ estimates for profit, while 64 percent exceeded sales projections, data compiled by Bloomberg show.
  • Profit probably rose 9.4 percent in the second quarter, while sales gained 4.2 percent.

NorthStar to Buy Griffin-American REIT II for $3.4 Billion

  • Stockholders of Griffin-American, a real estate investment trust that isn’t traded on exchanges, will receive $11.50 a share, comprising $7.75 in cash and the rest in NorthStar common stock, the companies said today in a statement.
  • NorthStar also will assume about $600 million of debt.
  • Real estate companies are seeking to take advantage of the growing demand for medical services and senior housing as the U.S. population ages.
  • The Griffin-American properties “are high-quality, diversified and stable cash-flowing assets that will enhance the long duration stable cash-flow growth that supports our dividend,” David Hamamoto, NorthStar’s chairman and CEO, said.
  • Griffin-American, based in Irvine, California, has sold shares in two offerings at $10 and $10.22 a share.
  • The REIT, founded in 2009, concluded its fundraising last year, collecting $2.8 billion in equity. It has 295 properties in the U.S. and the U.K., according to a NorthStar filing today.

Apple Said to Debut New Bigger-Screen iPhones on Sept. 9

  • Apple has scheduled a “bigmedia event related to the iPhone for September 9, technology news website Re/code said, without citing sources.
  • Apple is expected to introduce two new models: one with a 4.7-inch screen, and another with a 5.5-inch screen, people with knowledge of the plans have said.
  • The company has asked suppliers to manufacture 70-80 million units of the new large-screen iPhones by the end of the year, the Wall Street Journal reported in July.

Disney Profit Tops Estimates as Hit Films Spark Studio

  • Net income rose 24% to $2.25 billion from $1.85 billion a year earlier.
  • Revenue grew 7.7 percent to $12.5 billion, surpassing the $12.1 billion estimate.
  • The acquisitions of Marvel, in 2009, and Lucas film in 2012 have given Disney new ways to attract teenage boys to its films, as well as characters for its toys, TV networksand theme parks.
  • The world’s largest entertainment company had two of the three top-grossing films in the U.S. for the quarter: Marvel’s “Captain America” and “Maleficent”. “Guardians of the Galaxy,” also from Marvel, opened last weekend with $94.3 million in domestic cinemas, the best-ever for an August release.
  • Operating income at the film studio more than doubled to $411 million, the biggest gain among the company’s five divisions.
  • Disney gets the bulk of its profit from its TV division. Operating income at the unit, which includes ESPN, ABC and the Disney Channel, was little changed at $2.3 billion, as sports programming costs increased.
  • The consumer products unit, which also benefits from Marvel-themed products, posted a 25 percent rise in profit to $273 million, while revenue grew 16 percent.
  • Profit at Disney’s parksincreased 23 percent to $848 million, with attendance and guest spending up at its domestic resorts.

Time Warner Tops Estimates, Plans Buyback as Fox Walks

  • Time Warner, a day after Rupert Murdoch withdrew his $75 billion takeover bid, reported second-quarter earnings that beat analysts’ estimates and said it plans to buy back $5 billion of its shares.
  • Time Warner’s second-quarter net income rose to $850 million from $771 million a year ago.
  • Sales increased to $6.79 billion, missing the average estimate of $6.88 billion.
  • The licensing fees Time Warner gets for its cable channels gained 8 percent at Turner and 10 percent at HBO during the quarter.
  • Pay-TV distributors including Comcast paid more to carry programming such as NCAA playoff games that aired on Turner’s networks in the quarter.
  • HBO’s hit “Game of Thrones” had its fourth-season finale in June.

Murdoch’s Fox Withdraws Time Warner Takeover Offer

  • Rupert Murdoch’s 21st Century Fox withdrew its $75 billion takeover offer for Time Warner Inc., after the billionaire’s attempt to reshape the media industry was rejected.
  • Shares of Fox were up 10.4 percent in after-market trade after closing at $31.30. Shares of Time Warner were down 10.7 percent after closing at $85.19.

Gannett Buys Cars.com for $1.8 Billion, Splits Publishing

  • Gannett Co. plans to split into two publicly traded companies by spinning off its publishing business, including USA Today, and also said it has agreed to buy full ownership of Cars.com.
  • Gannett will separate the publishing business through a tax-free distribution to shareholders, leaving behind a company focused exclusively on broadcasting and digital assets, including Cars.com and Career Builder.

Groupon Forecast Trails Estimates amid E-Commerce Transition

  • Groupon’s transition from daily-deal e-mails to e-commerce retail isn’t going smoothly, with investments in the strategy cutting into profits. The shares sank.
  • Sales rose 23 percent to $752 million, falling short of the $762 million average estimate.
  • The company forecast third-quarter earnings of as much as 2 cents a share, excluding some items, compared with the average analyst estimate of 3 cents a share.

Zillow Tops Analysts’ Estimates for Second-Quarter Sales

  • The real-estate website that’s acquiring smaller rival Trulia Inc. for $3.5 billion reported second-quarter sales that topped analysts’ estimates as traffic increased and more agents used its home-listing service.
  • Sales rose 68 percent to a record $78.7 million, from $46.9 million a year earlier.
  • That compared with analysts’ average prediction of $76.6 million.
  • The company’s second-quarter net loss was $10.5 million, compared with a loss of $10.2 million a year earlier.

Walgreen Stays in U.S. as It Buys Rest of Alliance Boots

  • The biggest U.S. drugstore chain said it plans to pay about $15.3 billion for the part of Alliance Boots it doesn’t already own, and won’t use the deal to move its tax address abroad.
  • Alliance Boots is a Swiss company that runs pharmacy and beauty stores in Europe.
  • Walgreen previously controlled about 45 percent of Boots.

Tesla Reaches Settlement to End China Trademark Dispute

  • Tesla and Zhan Baosheng, who had registered rights to Tesla’s name in China before it entered that market, came to an agreement to settle their dispute “completely and amicably,” the carmaker said yesterday.

Sprint Said to End T-Mobile Discussions, Names New CEO

  • Sprint ended talks to acquire T-Mobile as regulatory concerns outweighed the potential benefits of combining the third- and fourth-largest U.S. wireless carries.
  • Sprint named Marcelo Claure, the founder of mobile-phone distributor Brightstar Corp., as its new CEO.
  • T-Mobile was willing to move forward on a deal with Sprint if it ceded on sticking points including over the financing structure, said people familiar with the talks.

BofA raises dividend for first time in 7 years

  • Bank of America will increase its quarterly dividend to 5 cents per shares from 1 cent per share after the Federal Reserve approved the bank’s updated capital plan.

Wells Fargo loosens standards for jumbo mortgages

  • In late July, the San Francisco-based bank lowered the minimum credit score on these fixed-rate jumbo mortgages to 700 from 720, Goyda said.
  • Credit scores range from 300 to 850, and levels below 640 are often considered subprime.
  • The lower requirements for jumbo loans are the latest effort by Wells and other banks to loosen mortgage criteria that are still tight by historical standards.
  • The mortgage industry is seeking to replace lost revenue after a spike in mortgage rates in the second half of 2013 made refinancing less attractive.

Samsung Electronics, Apple call end to patents war outside U.S.

  • Samsung and Apple said they had agreed to drop all patent litigation outside the United States, scaling down a protracted legal battle between the smartphone rivals.
  • The iPhone and Galaxy handset makers issued nearly identical statements announcing the global ceasefire while vowing to pursue ongoing litigation in the United States, which analysts say involves much bigger amounts of potential damages.

Chrysler profit up amid investor concerns over merger with Fiat

  • Second-quarter profit was up 22 percent to $619 million.
  • Chrysler posted a rise of 14 percent in net revenue to $20.5 billion.

US ECONOMY & POLITICS

Trade Gap Shrinks to Five-Month Low as U.S. Imports Drop

  • The gap shrank 7 percent to $41.5 billion, the smallest since January, from May’s $44.7 billion.
  • The median forecast in a Bloomberg survey of 66 economists called for a deficit of $44.8 billion.
  • Imports dropped 1.2 percent, the biggest decrease since June 2013, to $237.4 billion from $240.3 billion in the prior month.
  • Purchases of autos and parts declined by $1.07 billion and demand for cellular phones fell by $1.12 billion from the prior month.
  • Imports of petroleum, at $27.4 billion, were the lowest since November 2010. The nation’s trade deficit on the fuel declined to $14.7 billion, the narrowest since May 2009.
  • Excluding petroleum, the trade shortfall declined to $26.9 billion in June from $29.5 billion.
  • Exports edged up by 0.1 percent to a record $195.9 billion.
  • Sales of civilian aircraft, pharmaceuticals and chemicals were among the biggest gainers.

U.S. general killed, German general wounded in Afghan attack

  • A U.S. general was killed and more than a dozen people were wounded, including a German general, in the latest insider attack by a man believed to be an Afghan soldier.
  • The Maj. Gen. Harold J. Greene was the most senior U.S. military official killed in action overseas since at least the 1991 Gulf War.

EUROPE & WORLD

China Said to Exclude Apple from Procurement List

  • China’s government excluded Apple iPads and MacBook laptops from the list of products that can be bought with public money because of security concerns, according to government officials familiar with the matter.
  • Ten Apple products were omitted from a final government procurement list distributed in July.
  • Apple is the latest U.S. technology company to be excluded from Chinese government purchases amid escalating tensions between the countries over claims of hacking and cyberspying.

Standard Chartered again in firing line of NY regulator

  • Standard Chartered has warned it faces another fine from New York’s financial regulator for problems in its anti-money laundering controls, piling more pressure on the Asia-focused bank and its bosses.

TODAY in HISTORY

  • The Holy Roman Empire ended with the abdication of Emperor Francis II (1806)
  • Bolivia declared its independence from Peru (1825)
  • Gertrude Ederle became the first U.S. woman to swim across the English Channel (1926)
  • The first atomic bomb used in warfare was dropped on Hiroshima, Japan (1945)
  • Jamaica gained its independence within the Britain Commonwealth (1962)
  • President Johnson signed the Voting Rights Act of 1965, which outlawed the poll taxes and literacy tests that had restricted black voter registration in the South (1965)
  • Britishprime minister Tony Blair and Sinn Fein president Gerry Adams meet—the first time in 76 years that a British leader and an IRA ally meet (1997)
  • Arnold Schwarzenegger announced his candidacy to replace Gray Davis as governor of California to Jay Leno on the Tonight Show (2003)

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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