After Hours Summary: SUNE -7% following receipt of subpoena from DOJAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: VJET 7%, URBN 2.9%
After Hours Losers:
Companies trading lower in after hours in reaction to news: SUNE -7.4% (discloses receipt of subpoena from the DOJ, informal inquiry from SEC), GNCA -5.9% (cautious commentary from Biotech blogger Adam Feuerstein), HOT -4.1% (Anbang-J.C. Flowers-Primavera consortium confirms decision not to proceed with its proposal to acquire Starwood), MRVL -2.5% (files to delay Form 10-K, expects to incur a net loss for fiscal 2016)
Issues statement regarding earlier false press release attributed to Pfizer A false press release related to drug pricing and linking to a fake web site was anonymously issued earlier today. It was erroneously attributed to Pfizer and should be disregarded. Pfizer is investigating this matter and evaluating its legal options against the parties responsible. Pfizer is committed to engaging in an honest discussion and real dialogue about the issues that matter to patients.
Newell poised to wrap up $15B deal for Jarden
Household products giants Newell Rubbermaid and Jarden Corp. will be under the same roof sooner than the companies had hoped, The Post has learned.
Newell is on track to complete its proposed $15 billion deal for Jarden by April 15, which is earlier than the mid-2016 closing it had targeted, according to a source.
The deal struck in December will create a consumer products colossus with about $16 billion in annual revenue and brands ranging from Sharpie pens and Graco baby strollers to Sunbeam appliances and Rawlings baseball gloves.
While regulators were expected to eventually sign off on the deal, they are moving faster than the companies anticipated, said a source close the process.
The deal needs approval from the Federal Trade Commission and regulators in other countries where the firms do business. The FTC is also busy trying to block Staples from buying rival Office Depot, as well as reviewing the Pfizer-Allergan proposed merger, sources said.
While there would seem to be little overlap between ballpoint pens and baseball gloves, the combined company will have more pricing power when it comes to big chains like Walmart and could cross-sell its products in stores.
The companies declined to comment.
Newell will be paying $59.18 a share for Jarden based on Thursday’s closing price. Jarden shares rose 9 cents to close at $58.95.
China’s Anbang Tells Starwood It Is Walking Away
Hotel operator seen returning to Marriott’s previous takeover offer
China’s Anbang Insurance Group Co. has informed Starwood Hotels & Resorts Worldwide Inc. that it is withdrawing its $14 billion bid for the hotelier, according to people familiar with the matter.
The surprise move comes as Anbang appeared close to securing Starwood’s agreement for a deal that would have trumped an earlier merger pact between Marriott International Inc. and Starwood, the people said. Starwood now plans to revert to Marriott’s most recent offer, which valued Starwood at $79.53 a share, or $13.6 billion, according to one of the people.
Last November, Marriott signed a $12.2 billion deal for Stamford, Conn.-based Starwood, which has popular brands including W Hotels, St. Regis and Westin.
Airbnb, Paris Agree to Warnings on Illegal Rentals
French capital continues to crack down on tourist apartments that may be squeezing out residents
PARIS—Airbnb Inc. will start warning members who appear to be violating housing laws in the French capital, a new step by the home-sharing firm to crack down on tourist apartments that cities say are squeezing out local residents.
The California-based firm said Thursday that it has agreed with the city officials to launch a four-month pilot program in April. It will warn any host who is renting out his or her apartment for more than 120 days a year, or who appears to be renting out an apartment that is not his or her primary residence, that it may be a violation of city rules that can bring fines as high as €25,000 ($28,500).
While Airbnb won’t disclose the names of hosts that receive the warnings, a spokesman for the Paris mayor’s office said the city eventually wants to move toward a system that would prevent residents from renting outside legal limits if they cannot prove they have authorization.
“We’re moving step by step,” said Matthieu Lamarre, the mayor’s spokesman. “Eventually we will have to go further.”
The warnings mark a new step in Airbnb’s efforts to woo municipal governments worried about its impact. The company last year began striking deals with cities to pay tourist taxes, and last fall promised that it would start to work with them to resolve their concerns over affordable housing.
The issue has been a divisive one in cities ranging from New York to Berlin. But Paris, which is Airbnb’s largest single market with 60,000 listings, has been a case in point.
Paris officials say there are tens of thousands of tourist apartments in the city, with many operating illegally in dense tourist areas like the Marais. In a sweep of 2,000 apartments in that neighborhood in December, for instance, officials found roughly 100 tourist apartments that were being rented in violation of local law, the city says.
Rules in Paris allow apartment owners and some renters to sublet their primary residence for up to 120 days a year without any authorization. But anyone renting more for longer than that, or renting an apartment where they don't live, must get approval from the city. Such approval generally entails putting another apartment back into the long-term rental market to replace the one being used primarily for tourists.
Closing Market Summary: Indices End Flat Ahead of Employment ReportThe stock market ended the Thursday affair on a flat note with the S&P 500 slipping 0.2% ahead of tomorrow's release of the March Employment Situation Report (consensus 200k). Other contributing factors for today's decline included weakness from the oil pit and the underperformance of the heavyweight financial sector (-0.2%). The benchmark index (-0.2%) ended its day in-line with the Dow Jones Industrial Average (-0.2%) and behind the Nasdaq Composite (UNCH).
The equity market began its day on a flat note as cautious trading overseas and indecision from the oil pit took center stage at the open. International bourses adopted a risk-off posture as they set their sights on tomorrow's influential Employment Situation Report for March. However, a rebound in crude oil and some early sector leadership from the heavily-weighted health care (-0.2%), technology (-0.2%), and financials (-0.2%) would lift the indices to their best levels of the day.
Nevertheless, the rebound in crude would not last as the energy component returned to its intraday low ($38.19/bbl) shortly before the conclusion of its pit session. As a result, WTI crude ended its day lower by 0.2% at $38.29/bbl while the broader market ended in the lower half of its trading range.
On the leaderboard, materials (-0.9%), industrials (-0.4%), consumer staples (-0.3%), and financials (-0.2%) trailed while utilities (+0.5%) and consumer discretionary (-0.1%) outperformed.
The commodity-sensitive materials space (-0.9%) ended its day on the bottom of the board after the release of the quarterly grain stockpile report from the USDA. The report showed that inventories of soybeans and wheat grew a respective 15.0% and 20.0% since last year. Agrochemical names such as Monsanto (MON 87.74, -3.35) and Mosaic (MOS 27.00, -1.12) ended their day with the steepest losses.
Life insurance names underperformed in the financial sector (-0.2%) as they pulled back from yesterday's rally that followed a favorable ruling for MetLife (MET 43.94, -0.79). On that note, the stock surrendered 1.8% after rallying 5.4% yesterday.
In the influential technology space (-0.2%), large cap names pulled back from their recent highs while the high-beta chipmakers underperformed. The PHLX Semiconductor ended its day lower by 0.6% as the sub-group fell in sympathy with Micron Technology (MU 10.47, -0.01). The chipmaker slid as much as 2.9% after guiding its third quarter earnings estimates below analysts' estimates. Conversely, tech heavyweight and Dow component IBM (IBM 151.45, +3.04) topped the price-weighted index.
Biotechnology outperformed throughout today's session as the iShares Nasdaq Biotechnology ETF (IBB 260.81, +5.87) extended its month to date gain to 1.6%. Conversely, weakness from drug manufactures Pfizer (PFE 29.64, -0.43) and Allergan (AGN 268.03, -6.91) weighed on the broader health care sector.
The U.S. Dollar Index (94.62, -0.22) ended off its low as the greenback regained some ground against the yen and the euro. The euro/dollar pair gained 0.4% and ended at 1.1383 after trading as high as 1.1411. Separately, the dollar gained 0.1% (112.56) against the yen.
The Treasury complex inched towards session highs throughout the afternoon with the yield on the 10-yr note ending its day lower by five basis point at 1.77%.
Today's participation was above the recent average as more than 974 million shares changed hands on the NYSE floor.
Today's data included weekly initial claims and the Chicago PMI for March:
- Initial claims for the week ending March 26 rose by 11,000 to 276,000 (consensus 265,000).
- Despite the headline increase, the series remains inside a 250,000-300,000 range that has been in effect since July 2014.
- Including today's release, initial claims have now been below the 300,000 mark for 56 consecutive weeks.
- There were no special factors influencing the report and the four-week moving average moved up by 3,000 to 263,250.
- Continuing claims for the week ending March 19 were 2.173 million, down 7,000 from the upwardly revised prior week level of 2.180 million (from 2.179 million).
- The four-week moving average for the series fell 14,500 to 2.191 million.
- The Chicago Purchasing Managers Index registered a 53.6 reading for March, which was above the consensus estimate of 49.9 and well above the prior month reading of 47.6.
- Today's reading lifted the index above 50, which is the demarcation line between contraction and expansion in activities.
- Over the past seven months (including February), the index registered four contractionary readings, making today's report a welcome sight; however, the series will need to continue expanding in coming months in order to make a run at last year's highs.
- The March improvement was driven by snapbacks in Production and Employment components of the report. The Production Index spiked to 53.7 from 44.0 while Employment surged to 52.8 from 45.2, reaching its highest level since April 2015.
- Furthermore, New Orders (to 55.6 from 51.7) and Order Backlogs (to 49.7 from 45.3) also improved, underpinning the headline increase. Despite the improvements, Backlogs remained below 50 to continue a stretch that dates back to January 2015.
Tomorrow's economic data will include the 8:30 ET release of the Employment Situation Report for March (consensus 200k). Separately, the ISM Index for March (consensus 50.6), Construction Spending for February (consensus 0.2%), and the final reading of Michigan Consumer Sentiment (consensus 90.5) will each cross the wires at 10:00 ET.
- Nasdaq Composite -2.8% YTD
- Russell 2000 -1.9% YTD
- S&P 500 +0.8% YTD
- Dow Jones +1.5% YTD
Judge Extends Shield of U.S. Bankruptcy Law to Spain’s Abengoa
Spanish renewable energy company trying to secure creditors’ support for restructuring
A federal judge agreed to extend the shield of U.S. bankruptcy law to Abengoa SA while the Spanish renewable energy company works to secure creditors’ support for a restructuring plan.
Judge Kevin Carey of the U.S. Bankruptcy Court in Wilmington, Del., on Thursday agreed to preliminarily shield Abengoa SA and a host of affiliates from any creditor actions in the U.S., extending a protection that Abengoa has already secured from a Spanish court.
Abengoa this week sought protection under chapter 15 of the U.S. bankruptcy code, which is available to foreign companies, after 75% of its financial creditors signed on to a standstill agreement that gives Abengoa until the end of October to reach a comprehensive restructuring agreement without the threat of its creditors interfering with those efforts.
“That leaves an unknown 25% out there that we’re not sure what they’re doing or what they’re thinking,” Abengoa lawyer Craig Martin said at Thursday’s hearing.
The extra breathing room afforded by the chapter 15 filing will make sure that any creditors that didn’t sign the standstill agreement can’t turn to the U.S. courts to collect on their debts, Mr. Martin added.
Court papers show Abengoa’s debt load tops €14.6 billion ($16.6 billion). Abengoa, which operates around the world, is hoping in its restructuring to cut costs, shed noncore assets and emerge as a slimmer business valued at €5.395 billion with €4.9 billion in debt.
Creditors that have preliminarily pledged their support for the restructuring include banks like Banco Popular, Banco Santander and Bankia, as well as bondholders like Centerbridge Partners, D.E. Shaw, Elliott Management and KKR & Co.
In connection with the global restructuring, Abengoa also this week put a number of its U.S. units into chapter 11 protection in Delaware. Abengoa lawyer Richard Chesley said more U.S. affiliates may file for bankruptcy later as restructuring talks continue.
Also at Thursday’s hearing, the U.S. units made their initial appearance before Judge Carey, who signed off on a number of requests to keep the companies operating normally following their chapter 11 filings.
This week’s filings are separate from a pending chapter 11 proceeding for other Abengoa U.S. affiliates that was filed in a St. Louis bankruptcy court in February. Those affiliates, which operate ethanol plants in the Midwest, are exploring a sale or stand-alone restructuring. Mr. Chesley said Thursday that those companies are not part of Abengoa SA’s go-forward business plan.