Stocks finished lower after a tumultuous week driven by trade tensions and the prospect of a currency war with China. The Dow Industrials suffered their worst one-day drop of the year on Monday, but regained ground throughout the week.
In individual moves,
missed earnings expectations,
New Media Investment Group
’s GateHouse Media and
Inc. announced a $1.4 billion union, and
agreed to buy
’s enterprise business.
Uncertainty surrounding the trade-and-currency battle between the U.S. and China roiled financials all week long. Wells Fargo was among the big banks that fell early in the week as bond yields dropped and President Trump urged the Federal Reserve to cut interest rates “bigger and faster.” Then Wells Fargo surged on Thursday as geopolitical tensions eased. Shares of financial companies tend to fare poorly when interest rates are declining. Higher rates tend to boost banks’ profitability. Wells Fargo fell 0.2% Friday.
New Media Investment Group Inc.
Two giant local newspaper chains made their own headlines on Monday when New Media’s GateHouse Media and Gannett Co. announced a $1.4 billion union. Gannett’s shares closed 2.7% higher, while New Media’s closed 7.6% lower. GateHouse, the acquirer, is the largest owner of U.S. newspapers by titles with 400 papers, while Gannett is the largest newspaper group by readership, with a circulation of 4.32 million and 215 titles including USA Today, according to a University of North Carolina study. The private equity-backed Gatehouse, which is known for its rigorous cost-cutting, will become a towering presence in the industry. The deal reinforces the rise of financial investors who have been relentless about cutting costs in local news.
The founder and chief executive of Care.com announced her resignation on Tuesday. Sheila Lirio Marcelo’s disclosure came five months after The Wall Street Journal published an investigation showing that the online marketplace provided limited vetting of its caregivers, sometimes with tragic results. Ms. Marcelo will remain CEO until a successor is appointed. Shares fell 24.4% as the company reduced revenue and earnings expectations for the 2019 fiscal year, in part due to the “word-of-mouth” impact of the Journal’s investigation, the company said. Care.com has overhauled its screening practices in recent months to include in-depth background checks for caregivers.
Walt Disney Co.
Yes, “X-Men: Dark Phoenix” was that much of a flop. The poor performance of the 21st Century Fox Inc. film and other entertainment assets purchased by Disney in March was what led to the media giant’s weaker-than-expected second-quarter earnings, the company said late Tuesday. The $71.3 billion purchase of the major entertainment assets of 21st Century Fox has given Disney valuable franchises like “Avatar” and significant overseas expansion, but has also tied the industry leader to a smaller rival that has lagged behind so far this year. Even the blockbuster success of Disney’s “Avengers: Endgame” and other record-setting hits couldn’t buoy the quarter’s performance. Shares fell 4.9% Wednesday.
FedEx is marking “return to sender” on a contract to deliver
packages through its ground network, essentially severing ties with one of the world’s biggest shippers. Its shares gained 2.2% Thursday following the announcement on Wednesday. In June, FedEx said it was ending its air-shipping contract with Amazon in the U.S. The moves indicate escalating tensions between the longtime partners as Amazon builds its own delivery network. While it is walking away from the largest e-commerce player in the country, FedEx is positioning itself as a go-to carrier for
and other Amazon competitors.
Investors are losing their taste for Kraft Heinz. The company reported falling sales on Thursday and wrote down the value of its brands again due to operational missteps and pressure on big food makers to improve their products as consumers gravitate to newer alternatives. Food giants like Kraft Heinz,
and others have seen sales suffer in recent years as customers forgo their packaged foods. Kraft Heinz has been hit harder than most, in part due to fact that it hasn’t acquired smaller brands more focused on healthfulness or natural ingredients—or updated its products to the same degree as some competitors. Shares fell 8.6% Thursday.
Chip maker Broadcom Inc. wasn’t able to buy Symantec outright. So it is settling for a piece of the cybersecurity firm instead. Broadcom has agreed to buy Symantec’s enterprise business for $10.7 billion, Broadcom said late Thursday, after The Wall Street Journal reported that the two were close to a deal on Wednesday. The deal is big for Symantec, as the antivirus software seller’s entire market value is about $12.6 billion, compared to Broadcom’s roughly $107.6 billion market value, as of Wednesday. Shares of Symantec surged 12% Thursday after the Journal report. The stock price fell sharply last month when the two companies failed to reach an agreement on terms of a full-company sale.
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