Charles Schwab, Lennar, Johnson & Johnson: Stocks That Defined the Week
October 04 2019 - 6:51PM
Dow Jones News
By Francesca Fontana
Charles Schwab Corp.
The race to zero in the money management industry is hitting
bottom. Charles Schwab said Tuesday it would eliminate commissions
on trades made on its mobile and web channels, prompting shares to
fall 9.7%. Rivals such as TD Ameritrade Holding Corp. and E*Trade
Financial Corp. quickly followed suit, intensifying a fierce price
war across the financial sector. Interactive Brokers Group Inc. set
the stage for the moves last week when it said it would launch a
zero-commission stock-trading service.
United States Steel Corp.
A big steelmaker is forging a new partnership. U.S. Steel plans
to acquire a 49.9% stake in its lower-cost rival Big River Steel
for $700 million in cash, with an option to take full ownership
within four years, the company said Tuesday. Big River's technology
and ability to produce sheet steel by melting scrap in an electric
furnace will make U.S. Steel more cost-competitive with rivals such
as Nucor Corp. and Steel Dynamics Inc. Domestic steel prices have
fallen sharply in the past year as manufacturers' demand for steel
waned, making it more difficult for U.S. Steel to make a profit
with its high-cost structure and pushing it to pursue a lower-cost
partner. U.S. Steel shares rose 3.3%.
Johnson & Johnson
Johnson & Johnson said Tuesday it agreed to a $20.4 million
deal to avoid a coming trial accusing the company of helping spark
an opioid-addiction crisis in two Ohio counties. The settlement
makes J&J the fourth drugmaker to reach such a deal ahead of
the trial, which is considered a bellwether for thousands of
opioid-related lawsuits that municipalities and states have filed
against drugmakers. The company said the settlement allows it "to
avoid the resource demands and uncertainty of a trial as it
continues to seek meaningful progress in addressing the nation's
opioid crisis." J&J shares gained 1.6% Wednesday.
Lennar Corp.
Low interest rates are propping up the nation's biggest home
builders. Due to better-than-expected earnings Lennar was among the
best S&P 500 performers during a market rout on Wednesday, with
shares adding 3.8%. The Miami company reported a bigger profit than
analysts anticipated and reported an increase in orders and
deliveries. "We continue to believe the basic underlying housing
market fundamentals of low unemployment, higher wages and low
inventory levels remain favorable," Lennar Chairman Stuart Miller
said in prepared remarks. During the company's earnings call, Mr.
Miller added that lower interest rates have stimulated demand and
improved the affordability of new homes.
Constellation Brands Inc.
Constellation Brands' big bet on cannabis isn't working out. The
Corona brewer swung to a loss in the latest quarter, and its latest
results included roughly $500 million in losses from its investment
in Canadian marijuana grower Canopy Growth Corp. Constellation was
one of the first brewers to invest in cannabis and put roughly $4
billion into Canopy in 2018, giving it a 38% stake in the company.
Constellation's investment lost about $1.3 billion of value in the
latest quarter, including a $839 million decline in Canopy's share
price. Constellation shares lost 6.1% Thursday.
Credit Suisse Group AG
A spy scandal is roiling a Swiss banking giant. Credit Suisse
Chief Operating Officer Pierre-Olivier Bouée resigned after an
internal probe found he ordered the surveillance of the bank's
former wealth-management chief, Iqbal Khan, without discussing it
with Chief Executive Tidjane Thiam or other senior bank officials.
The probe cleared the CEO of any involvement. Credit Suisse also
said it found no evidence Mr. Khan, who started work at rival UBS
Group AG on Tuesday, made any attempt to poach employees or
clients, contrary to suspicions that people close to the bank had
described as underpinning the surveillance. American depositary
shares of Credit Suisse fell 2.7% Tuesday.
HP Inc.
HP may be printing new pink slips. Shares of the computer
hardware maker plummeted 9.6% Friday after the company said it
could eliminate 7,000 to 9,000 jobs from its roughly 55,000
workforce over the next three years. Incoming Chief Executive
Enrique Lores's restructuring plan also aims to revive lagging
printer sales. HP is changing its sales model: The company will
still offer customers the option of buying their discounted
printers, but then will lock them into buying ink from HP as well,
rather than from other, cheaper vendors. Otherwise, they can opt to
purchase printers at a higher price that would allow them to use
third-party ink cartridges.
Write to Francesca Fontana at francesca.fontana@wsj.com
(END) Dow Jones Newswires
October 04, 2019 18:36 ET (22:36 GMT)
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