Noble Energy, Shake Shack, J.C. Penney: Stocks That Defined the Week
By Francesca Fontana
Noble Energy Inc.
It was another wild, chaotic week for the oil world. Crude
prices dropped below zero for the first time Monday, the result of
falling demand from the coronavirus pandemic and a failure by
energy and oil producers to drop output fast enough. Noble Energy
fell 2% the following day, while Chevron Corp. fell 2.3% and
Occidental Petroleum fell 2%. Oil prices then rebounded later in
the week, sparked by the prospect of fresh U.S.-Iran tensions.
Shake Shack Inc.
Shake Shack is returning a $10 million loan meant to help small
businesses during the coronavirus pandemic. The burger chain, which
employs more than 8,000 people, is one of several larger restaurant
operators that have received funds from the federal Paycheck
Protection Program. The company said Monday that it would return
its PPP loan, after raising additional capital from stock
investors. Many restaurants and other small businesses said they
didn't get funding from the program before it ran out of funds last
week. The Treasury Department on Thursday asked publicly traded
companies to repay loans they received from the program. Shake
Shack shares gained 6.7% Monday.
HCA Healthcare Inc.
Coronavirus is upending how hospitals make money. HCA
Healthcare, one of the nation's largest hospital chains, said
Tuesday that its first-quarter profit fell as emergency departments
and operating rooms emptied out in response to state orders to
combat the pandemic. The company suspended its quarterly dividend
and joined other companies that have withdrawn guidance in recent
weeks, saying it couldn't predict how the pandemic would continue
to affect HCA's performance. Many states have required some or all
hospitals and surgery centers to suspend procedures that weren't
urgent or emergencies, with orders beginning in mid-March. Shares
lost 4.5% Tuesday.
Expedia Group Inc.
Expedia has reached a deal to sell a stake to private-equity
firms Silver Lake and Apollo Global Management Inc. after
widespread travel bans ravaged the online-booking company's
business. The Wall Street Journal reported late Tuesday that the
investment is likely to total around $1 billion and could tide the
company over until travel restrictions are lifted and the economy
recovers. The company named a new CEO and confirmed the investment
on Thursday. Demand for its flights and lodging has disappeared as
much of the world's population stays at home to limit the spread of
coronavirus. Expedia shares added 7.3% Wednesday.
People stuck at home are turning to Snapchat to connect with
friends during the pandemic. Snap on Tuesday reported a surge in
growth in revenue and users on its chat app, surprising analysts
who have estimated sharp decreases in digital ad spending in the
quarter. Communication with friends on the company's Snapchat app
increased by more than 30% in the last week of March compared with
the last week of January, the company said. In areas hardest hit by
the pandemic, communication with friends on Snapchat increased more
than 50%. Snap's performance could bode well for social-media
heavyweights like Facebook Inc., which delivers earnings next week.
Snap shares soared 37% Wednesday.
Coronavirus lockdowns are cutting into Target's bottom line.
Consumers flocked to stores to stock up in late February and early
March, but Target Chief Executive Brian Cornell said Thursday that
traffic slowed considerably as shoppers grew more reluctant to
venture outside amid the pandemic. Sales from stores weakened
significantly in late March and early April, and buying has shifted
online through home delivery, store pickup and other services.
Throughout, Target experienced a surge in sales of food, household
goods and, more recently, office supplies and cooking appliances,
while sales of higher-margin goods such as apparel and accessories
fell. Target shares fell 2.8% Thursday.
J.C. Penney Co.
One of the dominant department-store chains of the last century
appears closer to succumbing to the economic collapse caused by the
coronavirus pandemic. The Wall Street Journal reported late
Thursday that J.C. Penney is in advanced talks with a group of
lenders for funding that would keep the department-store chain's
operations funded during a court-supervised bankruptcy. The loan
package could total roughly $800 million to $1 billion, with some
of that money potentially including existing debt. The company has
been losing money for years, and with its stores unlikely to reopen
soon J.C. Penney has been forced to put aside its latest turnaround
strategy. J.C. Penney shares fell 11% Friday.
Write to Francesca Fontana at firstname.lastname@example.org
(END) Dow Jones Newswires
April 24, 2020 19:38 ET (23:38 GMT)
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