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Ten floors of a high-rise overlooking the Manhattan office complex will be rented out as lodging

NEW YORK—The owner of a high-rise office building in Rockefeller Center is teaming up with home-rental giant Airbnb Inc. to convert 10 floors into the first modern-day lodging in the landmark 87-year-old complex.

RXR Realty and Airbnb said they hope to open the facility at 75 Rockefeller Plaza in about a year. The upscale rooms will be on the higher floors of the 32-story tower, allowing guests to gaze on St. Patrick’s Cathedral and offering a bird’s-eye view of Rockefeller Center’s annual Christmas tree lighting.

The Rockefeller Plaza deal, which is still subject to approval from lenders and other parties, is the first of what RXR and Airbnb hope will become a number of lodgings in the New York region. They also are discussing a facility with about 150 units at 47 Hall St. in Clinton Hill, Brooklyn, where RXR has been overhauling a century-old 10-building complex into modern office space.

The Rockefeller Plaza operation will offer about 200 units for overnight stays. It is being set up to avoid the friction that hampered Airbnb’s expansion efforts in other parts of the city. For example, it will be staffed by unionized labor and closely follow city rules, said Scott Rechler, RXR’s chief executive.

“This is a way that’s clearly going to comply” with all of New York City’s regulatory components, he said.

For Airbnb, the Rockefeller lodging would be the flagship of its new effort to expand in markets like New York City as it encounters resistance from local governments.

Under pressure from the city’s hotel industry, New York has imposed strict regulations on such short-term rentals and has hit owners who have failed to comply with heavy fines. In one action earlier this year, the city filed a lawsuit against a residential brokerage that it claimed was the hub of a wide-reaching hotel scheme.

Faced with such reactions in numerous cities, Airbnb has begun to shift its strategy, trying to become more involved in the design and operation of short-term rental apartments. A venture of Airbnb and real-estate developer Niido has opened an Airbnb-branded lodging in Kissimmee, Fla., and one in Nashville. Niido said it is planning many others.

These are part of the company’s broader effort to diversify its business as it prepares for an initial public offering of shares, expected next year.

Airbnb’s deal with RXR would be its first to create a stand-alone Airbnb lodging within an office building in New York. Talks between the two were earlier reported by Politico.

Since 75 Rockefeller Plaza and other RXR buildings are zoned for commercial use, transforming some floors into accommodations potentially faces fewer of the legal complications that have caused headaches for Airbnb hosts at New York City apartment and condo buildings.

“I think we will see how this model works, certainly take lessons from it and apply those lessons as we go forward,” said Chris Lehane, Airbnb’s senior vice president of global policy and communications.

RXR owns more than 6,000 apartments and about 25 million square feet of commercial property in the New York metro region.

In 2012, the firm leased 75 Rockefeller Plaza for 99 years and since then has overhauled the building and leased much of its space to traditional office tenants.

But RXR reserved upper floors for possible hotel use. The company increasingly has been mixing office, residential, hotel, entertainment and retail uses in its projects, believing that demand is growing for urban settings where people can work, live, stay and play.

Developed in the 1940s as the headquarters for Standard Oil Co., 75 Rockefeller Plaza is part of the storied Midtown Manhattan complex that is known for its outdoor ice skating rink, shops and restaurants. The original art deco complex was developed by John D. Rockefeller Jr. during the Great Depression.

Amenities at 75 Rockefeller Plaza already include a private club in the tower named Club 75 and a conference and co-working facility managed by Convene.

The lodging at 75 Rockefeller will be listed in the Airbnb system along with private homes, but won’t carry the Airbnb brand. Rather it and other RXR lodgings likely will have a name tied to the neighborhood or the building.

“Something like ‘The Rock,’ ” Mr. Rechler said.

Marvel Studios blockbuster continues Disney’s unprecedented winning streak

LOS ANGELES—Walt Disney Co.’s DIS +0.00% superhero epic “Avengers: Endgame” became the first movie to gross more than $1 billion in its debut at the world-wide box office.

The Marvel Studios blockbuster, powered by record-setting hauls in the U.S. and China, collected an estimated $1.2 billion in its first five days of release. An estimated $350 million of that total came from the U.S. and Canada, an amount that blew past the previous opening-weekend record set last year by “Avengers: Infinity War” by about $92 million.

Hollywood had expected “Endgame” to set a record, but the movie’s performance stretched the limit of what many studio executives thought was even possible in an opening weekend. Demand forced exhibitors to dedicate about half the nation’s screens to the superhero movie, with dozens of locations screening it round-the-clock and even 2 a.m. showtimes selling out.

Over the past 11 years, Marvel’s superheroes have reigned at the box office, a result of a strategy set by the studio in 2008 with the release of “Iron Man.” Interconnected story lines and characters—from Thor to Doctor Strange to Captain Marvel—have helped place Disney on an unprecedented winning streak at the box office. In just over a decade, Marvel’s success has prompted rival studios to hunt for their own franchises, provided a much-needed boon to a struggling exhibition industry and turned comic-book superheroes into one of America’s most popular exports.

“Endgame” could become the highest-grossing movie of all time, beating the record set by “Avatar,” which made $2.79 billion globally in 2009. After just five days of release, it is already No. 18 on the world-wide box-office chart.

To become the top-grossing movie in the U.S. and Canada, it will need to beat the $936 million collected by Disney’s “Star Wars: The Force Awakens” in 2015. (When figures are adjusted for inflation, “Gone With the Wind” holds the top spot, according to Box Office Mojo, with $1.8 billion.)

In China, once an afterthought to studios but now the world’s second-largest box-office market, the movie is virtually guaranteed to become the highest-grossing import of all time, with $331 million grossed so far—only about $60 million behind the current record holder, 2017’s “The Fate of the Furious.”

The overseas performance of “Endgame”—$859 million in five days—speaks to the staggering rise in international box-office receipts over the past decade. The first “Iron Man” collected about 46% of its total box office from overseas markets. When “Infinity War” was released last year, the international market accounted for 67% of the total gross.

“Endgame” caps a series of 21 previous Marvel superhero movies that began with Robert Downey Jr. starring as Tony Stark in 2008’s “Iron Man” and has included smash hits such as “Guardians of the Galaxy,” “Black Panther” and March’s “Captain Marvel.” A sequel to last year’s “Infinity War,” “Endgame” has been marketed by Disney as the culmination of the 11-year saga, though more Marvel movies are already scheduled on the release calendar.

“Infinity War” set a record for a global debut last April with $640 million, a figure that excluded Chinese box-office receipts. That movie ended on a cliffhanger that saw half the superheroes vanish into dust.

“The pent-up factor, off the ending of ‘Infinity War’ and on the heels of ‘Captain Marvel,’ drove people to show up,” said Cathleen Taff, Disney’s head of distribution.

Fans around the world filled auditoriums, worried about having some of the movie’s biggest surprises spoiled on social media.

Josh Martin, a 28-year-old animator from Houston, wanted to see “Endgame” as quickly as possible—which meant attending a 2 a.m. screening with his brothers early Friday morning.

At work on Friday, he worried about spoiling the movie for colleagues, until he found a co-worker who had already seen it three times—at an early Thursday evening showing, a late night Thursday showing and then finally at an early morning Friday showing.

Like many fans, Mr. Martin has followed the stories of the Marvel superheroes for more than a decade.

“It’s like part of the family when you see Tony Stark up there,” he said.

Raamiz Khan, a 14-year-old Pakistani student who has lived most of his life in Dubai, joined about a dozen school friends for a Thursday screening of the movie at a theater in Dubai’s snazzy Marina Mall.

“The theater was packed…people were jumping and screaming throughout,” he said. “Many just forgot where they were sitting and ended up on the stairs.”

In India, “Endgame” opened on more than 2,500 screens and was shown in English and three other Indian languages.

The family of Armaan Nalli, 15 years old, usually goes to local-language movies together, but he has been a Marvel fan for most of his life.

The moviegoers were so excited to get in that he got pushed past the 3-D glasses stand and had to go back to the entrance after finding a seat.

“People stood up and applauded at the credits,” he said.

Disney’s superhero success has forced rivals to mimic the approach, most notably at the DC Comics franchise from AT&T Inc.’s WarnerMedia, the studio behind films like “Wonder Woman” and “Justice League.”

It has also consolidated market share among the biggest releases Hollywood has to offer. Disney is now behind nine of the 10 biggest domestic opening weekends in history—Universal Pictures’ “Jurassic World” is the lone exception among Disney hits like the last two “Star Wars” movies and “Incredibles 2.”

For theater owners grappling with at-home competition from Netflix Inc., the boost from a new Disney hit goes beyond just ticket sales. The nation’s largest exhibitor, AMC Entertainment Holdings Inc., said Sunday it had set company records in food-and-beverage sales on Friday and Saturday.

About 45% of global ticket sales over the weekend were for premium-priced 3-D screenings, according to RealD Inc., and IMAX Corp. said its previous opening-weekend record was nearly doubled by “Endgame” returns of about $91.5 million in its big-screen auditoriums.

“It speaks to what works right now, which is people want big events and people can galvanize on a global basis,” said IMAX Entertainment President Megan Colligan.

Opening-weekend audiences approved of “Endgame,” giving it a rare “A+” grade, according to the CinemaScore market research firm, a response that could signal repeat customers in the weeks to come.

Companies with little or no history in the sector are now posing competition

Many pharmaceutical companies expect cancer treatments to drive growth in the coming years. One notable exception: the world’s largest cancer-drug maker.

Switzerland’s Roche Holding AG RHHBY 0.65% has enjoyed almost two decades as an unrivaled force in oncology. Now, with more companies piling into the space and its top-selling drugs losing sales to lower-cost copies, that is about to change.

Roche’s cancer franchise generated double the sales of its nearest competitor in 2018 but is expected to shrink over the next few years. Companies with little or no history in cancer drugs are now posing competition. And the pending combination of Celgene Corp. CELG 0.32% and Bristol-Myers Squibb Co. BMY 0.55% is set to create a rival that will soon knock Roche off its top spot.

Roche has dominated the cancer-drug market since 2002, largely thanks to its partnership with California biotech Genentech, which it took full ownership of in 2009. Genentech developed Roche’s top-selling trio—Herceptin, Avastin and Rituxan—that have generated sales of more than 240 billion Swiss francs ($235 billion) over the past 15 years. More than 60% of Roche’s pharmaceutical revenue comes from cancer drugs.

But lower-cost copies are now starting to erode those sales. Roche expects to lose 10 billion francs of annual revenue from Herceptin, Avastin and Rituxan by 2022. Overall, revenue from Roche’s cancer franchise are forecast to fall 12% over the next six years, according to market-research company EvaluatePharma. Over the same period, the data tracker expects the overall cancer market to nearly double in size.

Roche is increasingly looking outside oncology to help plug the gap. The company is counting on Ocrevus, a drug for multiple sclerosis, to replace nearly half the lost sales, according to a recent investor presentation. It also is looking to buy growth, recently acquiring gene-therapy company Spark Therapeutics Inc. in a bid to build its presence in hemophilia. It expects that deal to close in the coming weeks.

Roche’s growing reliance on non-oncology drugs doesn’t mean the company is retreating from cancer, according to Bill Anderson, head of its pharmaceuticals division. “We are not backing down one inch from cancer,” he said in an interview. “We are making every investment in cancer that we think is advisable to make.”

But a recent flood of spending on cancer research by many of Roche’s rivals means the competition to develop new drugs, and win market share, is much tougher than in the past.

Rivals who were previously more rooted in general medicine, like Pfizer Inc., GlaxoSmithKline PLC and AstraZeneca PLC, are pivoting to cancer, spurred by recent scientific breakthroughs, a permissive regulatory system and the potential of high returns.

Between 2007 and 2017, the number of cancer drugs in late-stage clinical trials surged more than 60% to 710, according to IQVIA, a health-care data provider.

“Oncology has been a growth area for our industry and will be for quite some time,” said Brad Loncar, a health-care investor who developed an exchange-traded fund of cancer immunotherapy companies. “They are losing their leadership role at a time when the space itself is at a special moment.” Mr. Loncar doesn’t hold Roche stock.

Roche executives say they believe the company still has an edge over the rising competition. Mr. Anderson said Roche’s cancer pipeline spans a broader range of approaches to attack cancer than many of its competitors. He also cited the company’s investment in data as giving it an advantage in developing new drugs.

“Cancer is getting crowded; there are too many people chasing too few targets,” he said. “I wouldn’t invest in those companies. But I love our investment.”

However, the impact of competition was clear over the past few years in the market for a new class of drugs known as immunotherapies, which boost the immune system’s response to cancer.

Merck & Co.—which has a shorter history in cancer—beat Roche to dominate the immunotherapy space despite the two companies starting to test their drugs in patients within months of each other in 2011. Merck moved faster with clinical trials for its drug, Keytruda, which received its first regulatory approval in 2014, two years before Roche’s Tecentriq. Keytruda now outsells Tecentriq by a factor of 10.

“They outspent us between five and 10 times across the board,” said Daniel Chen, who led the Tecentriq research-and-development program until leaving Roche last year to join a biotech startup. Roche would have had to jettison other promising programs to match Merck’s spend, which was a “very difficult trade-off,” he said.

Roche’s strategy was to run fewer, more targeted clinical trials shaped by scientific understandings amassed from years of immunotherapy research, according to Dr. Chen. While that gave it an advantage in certain areas—he says Roche was the first to recognize the potential of combining immunotherapy with chemotherapy—Merck went on to become the clear leader in the market.

Still, Roche executives aren’t shaken by the company’s laggard position in immunotherapy. “This has been characterized by many as a race,” said Chief Medical Officer Sandra Horning, in an interview. “We think of it as more of a marathon.”

U.S. banks since the financial crisis have largely lapped their European counterparts

The scuttled tie-up between Deutsche Bank AG DB -1.92% and German rival Commerzbank AG CRZBY 3.09% underscores the uneven recovery between lenders on either sideof the Atlantic and how decisions made during the financial crisis are reverberating today.

The possible bank merger in Germany was supposed to put Deutsche Bank, a global player in trading and investment banking, on a path toward profitability and stability. Instead, the firm is now left vulnerable as its core global businesses continue to lag behind those of its U.S. competitors.

And the latest bank earnings reports show the trans-Atlantic gap is widening.

After disclosing last week that deal talks fell apart, Deutsche Bank said it earned €200 million ($222 million) in net income for the first three months of the year and revenue from its investment-banking unit fell again. Meanwhile, JPMorgan Chase & Co., the largest U.S. bank, reported earlier this month $9.18 billion in first-quarter earnings, more than 40 times Deutsche Bank’s.

The U.S. bank’s shares have risen around 17% so far this year and are valued at about 1.6 times book value.

One of the U.S. banks hit hardest by the financial crisis, Citigroup Inc., said it earned $4.7 billion in the first three months of the year. Its shares have risen 34% this year, on pace for their best annual gain in seven years.

Deutsche Bank, meanwhile, is up just 5.4% this year, after sliding 5.7% last week. It is valued at just a quarter of book value.

The differences reflect widely varying profitability. JPMorgan reported a 12.6% return on equity for 2018 and Citigroup clocked in at 9%. Deutsche Bank’s return sat at 0.4%.

European banks more broadly, and not just Deutsche Bank, have been struggling since the financial crisis. That is in part the result of the weak macroeconomic environment, the eurozone crisis and negative interest rates that weigh on profits.

“If you’re looking for a rebound or improvement in profitability and growth among European banks, they have to do that in a flat or declining rate environment,” said Ken Leon, CFRA director of equity research. “That’s hard.”

European banks have lagged also due to decisions made during and after the crisis. In the U.S., banks were forced to take government funding, more quickly recognize losses and shore up their balance sheets. In Europe, banks were slower to clean up loan books or bulk up equity buffers.

“The U.S. banks took their medicine early in terms of recapitalizing their businesses,” said Devin Ryan, a senior analyst at JMP Securities LLC who focuses on investment banks. “There’s a lot of evidence that banking in the U.S. is much better positioned today than a decade ago and better than Europe.”

U.S. banks today are viewed as among the strongest in the world. In Europe, banks continue to limp along and nearly every major financial firm trades below its book value, or net worth—a sign of market distrust. Deutsche Bank is one of the most extreme examples, both in terms of valuation and market size.

Citigroup and Deutsche Bank illustrate the contrast. Before the crisis, Citi’s market value was about $200 billion greater than that of the German bank. In mid-2009, Deutsche Bank was worth nearly $30 billion more.

As Citi climbed out of its hole and began to repair its balance sheet, its market value steadily rose back above that of Deutsche Bank. Today, Citi is again worth about $150 billion more than Deutsche Bank.

European shares have recovered this year, but investors remain pessimistic and wade in gingerly

European stocks have been among the least liked investments for fund managers in recent months. Yet some investors, sensing Europe’s economic gloom lifting, are gingerly returning to the region.

European shares have rebounded strongly so far this year, with the benchmark Stoxx Europe 600 up 16%. That slightly lags behind broad markets in the U.S., where the S&P 500 is up 17%. While U.S. indexes hit record levels last week, European stocks are still some way off the highs reached four years ago, and there remains skepticism that the region’s stocks will have what it takes to pull ahead.

Investors are so generally pessimistic about European stocks that it creates an opportunity because the “news flow doesn’t have to be that positive for people to start buying,” says Emiel van den Heiligenberg, head of asset allocation at Legal & General Investment Management.

He expects the regional economy to stabilize or recover in coming months as countries roll out more generous fiscal policies. His group has been buying European benchmark indexes while trimming its heavy bets on the U.S. But it also has been adding extra exposure to the basic-resources sector in Europe, which is less reliant on growth in the region itself.

“That’s a European sector, but the main play there is on China,” said Mr. van den Heiligenberg, who expects a recovery in the Chinese economy following a series of generous fiscal policies.

Europe has been dragged down by the political uncertainty around Brexit, government finances in Italy and weak German growth. Talk of tariffs on exports into the U.S. also has weighed on investors. The mood worsened after the European Central Bank slashed forecasts for growth in early March.

Reflecting those concerns, the yield on 10-year German government bonds are again in negative territory, reaching minus-0.019% on Friday.

The euro has slipped to a 22-month low against the U.S. dollar, which suppresses returns for U.S.-dollar-based investors but also helps Europe’s export-oriented companies be more competitive.

U.K. and eurozone stocks are the assets that investors are the most negative about compared with their past views, according to Bank of America Merrill Lynch’s latest Global Fund Manager Survey, which covers 239 panelists who control a total $664 billion in assets. European equity funds have faced net withdrawals in all but two weeks over the past year, according to fund-flow data provider EPFR.

One mark against European stocks is that the region lacks a large base of technology companies, a sector that has pulled U.S. stock markets higher, on the backs of companies such as Facebook Inc., Apple Inc., Amazon.com Inc., Netflix Inc. and Alphabet Inc.

Tim Crockford, lead manager for Europe outside the U.K. at Hermes Investment Management, points to companies such as Kion Group AG, a German forklift producer, which could benefit from the shift to automation in large warehouses as e-commerce groups expand.

“Europe does have some very exciting tech companies; it’s just that they tend to be somewhere in the middle of the value chain rather than the very downstream or at the top end,” Mr. Crockford said.

Some bullish investors see reasonable valuations on businesses with a global market rather than in an improvement in the regional economy itself.

Benjamin Segal, portfolio manager at Neuberger Berman in New York, has been building a position in Kerry Group PLC, an Irish butter maker with a large presence in emerging markets and North America; Infineon Technologies AG, a German semiconductor maker, and Gerresheimer AG , a German packaging producer supplying global drugmakers, among others.

“I’m not calling the bottom because I’m not smart enough to do that and I have got it wrong too many times,” Mr. Segal said, adding that some sectors such as health care, pharmaceuticals and consumer staples are still looking relatively expensive.

Investors have repeatedly been burned taking an optimistic view on Europe’s economy. Some piled in too early, buying up European equities at the end of 2017, amid growing optimism around the election of French President Emmanuel Macron, who promised to push through major economic reforms, many of which have been stymied.

Despite joining global markets in a sharp recovery so far in 2019, Europe started from a lower base, having done much worse than other developed markets at the end of last year.

The valuations of European and U.S. equities have diverged since the end of 2016 on certain measures. The Stoxx Europe 600 is currently trading at 14 times forecast earnings, compared with 17 times for the S&P 500, according to FactSet data. The gap in those ratios remains substantially wider than its long-term average over the past decade.

Sale of Texas-based oil and gas company to Chevron in jeopardy

Anadarko Petroleum is preparing to endorse a hostile $55bn bid from its rival Occidental Petroleum, putting its sale to oil major Chevron in jeopardy, according to people with knowledge of the matter.

The Texas-based oil and gas company is expected to make a statement this week after its board determined that a cash and stock offer from Occidental is superior to the $50bn deal it agreed in early April with Chevron.

A decision by Anadarko to endorse the Occidental offer would be a rare win for a hostile bidder, which are often rebuffed. Anadarko acknowledged last week that it had received an offer from Occidental, weeks after it had rejected takeover advances from the group.

Anadarko could not immediately be reached for comment, but last week it said it would “carefully review Occidental’s proposal to determine the course of action that it believes is in the best interest of the company’s stockholders’’.

Occidental, one of the five largest US oil and gas production companies, offered to pay Anadarko shareholders $76 per share, a 22 per cent premium to the bid from Chevron, which is worth roughly $63 per share.

The bid from Occidental was evenly split in cash and stock. Chevron offered to pay 0.39 of its own stock and $16.25 in cash for each share of Anadarko outstanding. Anadarko has agreed to pay Chevron $1bn if it backs out of the deal.

It is unclear if Chevron will increase its bid for Anadarko. However, people with knowledge of the oil major’s thinking have said Chevron was unlikely to enter a bidding war for the assets, the Financial Times has previously reported. Chevron had earlier refused to raise its bid when it had heard Occidental had offered more than $70 a share for Anadarko.

A deal would give Occidental valuable shale oil acreage as well as assets in the Gulf of Mexico and a natural gas project in Mozambique. It would be the largest and boldest bet yet by Occidental chief executive Vicki Hollub.

“This is much more synergistic for us than any other company that might look at this,” Ms Hollub told the FT last week.

Occidental’s interest emerged just minutes after Anadarko announced its sale to Chevron earlier this month, but analysts warned at the time that they did not see how Ms Hollub could outbid her larger rival.

Ms Hollub has promised to sell assets worth up to $15bn if a deal to take over Anadarko is agreed, in part to win backing from Occidental shareholders who must sign off on the cash and stock deal.