The S&P 500 and Nasdaq Composite ended the week more than 3% lower after the Federal Reserve decided to cut interest rates and President Trump announced potential new tariffs on Chinese imports.
In individual moves, Pfizer agreed to merge its division of off-patent drugs with Mylan; Capital One experienced one of the largest data breaches of a big bank; and Qualcomm cut its full-year forecast on weaker demand in China.
The pharmaceutical giant has agreed to merge Upjohn, its division that makes off-patent drugs, with generic drugmaker Mylan NV in what will be one of the largest companies selling low-cost prescription medicines. Mylan and Pfizer expect between $19 billion and $20 billion in pro forma revenue in 2020 from the deal, which was announced Monday. As a part of the move, Mylan’s chief executive officer and chief financial officer will leave the company. Before the merger was announced, The Wall Street Journal reported that Pfizer was nearing a deal with Mylan. Pfizer shares fell 3.8% Monday.
Capital One Financial
The fifth-largest U.S. credit-card issuer experienced one of the largest-ever data breaches of a big bank after a hacker accessed the personal information of approximately 106 million card customers and applicants. The company announced the breach late Monday after a woman was arrested by federal agents in Seattle in connection with the hack. The bulk of the exposed data involved information submitted by customers and small businesses that applied for Capital One credit cards between 2005 and early 2019, Capital One said, including addresses, birth dates and self-reported income. The bank’s shares fell 5.9% Tuesday.
Pickup truck sales are expected to help rev up General Motors throughout the rest of this year. The company forecast an acceleration in profits through 2019, driven by an overhauled line of its biggest pickups, executives said Thursday. In its second quarter, GM saw rising profit from North America and the highest operating margin in the region in two years, helping offset weak China sales amid trade tensions between Washington and Beijing. GM is confident the truck market can remain strong, its finance chief said, as there is more pent-up demand for pickups. Shares fell 0.5% Thursday.
A return to growth pushed Apple toward a $1 trillion market capitalization after the company countered another quarter of weak iPhone sales with strong revenue growth from supporting businesses, including its iPads and Macintosh computers. Apple said Tuesday its revenue rose 1% to $53.81 billion in its most recent quarter, an improvement from back-to-back revenue declines in the previous two quarters. Still, foreign rivals like Huawei Technologies Co. are gaining share in China’s smartphone market as the U.S. and Beijing continue trade negotiations. Shares gained 2% Wednesday as the company flirted with the $1 trillion valuation intraday.
Qualcomm’s outlook continues to face pressure from China, including a U.S. ban on exports to Huawei Technologies and a sharp drop in smartphone sales. The chip maker cut its full-year forecast for global smartphone sales when it announced quarterly results late Wednesday, in large part reflecting weaker Chinese demand after the Huawei ban. Some handset makers are also holding off on new releases, prioritizing a new generation of high-speed 5G devices coming next year, the company’s chief executive said during a call with analysts. Shares fell 2.7% Thursday.
General Electric Co.
Despite its second-quarter loss and flat sales, General Electric said Wednesday it is making progress restructuring during its “reset year” and raised its full-year financial projections. In the second quarter, GE reported negative $1 billion in cash flow from industrial operations, at the low end of its own target. “I’m encouraged by the steady progress we are making,” Chief Executive Larry Culp told The Wall Street Journal, saying the power business “seems to be stabilizing.” GE also said its finance chief, Jamie Miller, will be leaving her role and the company is beginning a search for a successor. Still, shares lost 3.5% Thursday.
Exxon Mobil Corp.
Energy giants are hurting from a drop in the price of natural gas stemming from concerns of a glut.
said Friday its second-quarter profit fell 21% as lower returns for gas and petrochemicals offset production growth. European companies such as
Royal Dutch Shell
reported similar results this week, while
’s profit rose, in part from a breakup fee over an abandoned deal for
Exxon shares lost 1% Friday.
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