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Business

Brazil court grants bankruptcy protection for retailer Americanas

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SAO PAULO, Jan 19 (Reuters) – A Rio de Janeiro court on Thursday accepted Brazilian retailer Americanas SA’s (AMER3.SA) bankruptcy protection request, days after the company disclosed nearly $4 billion in accounting inconsistencies that have sparked a legal feud with creditors and investors.

Americanas, a 93-year-old company with stores all over Brazil and a major e-commerce unit, said in a securities filing that it would restructure debts of about 43 billion reais ($8.2 billion).

Shares in the company plunged about 42.5% to 1.00 real following news of the filing, extending its year-to-date drop to around 90%.

The firm, backed by the billionaire trio that founded 3G Capital, said the move had come “despite the efforts and measures that the management has been taking in the past few days alongside its financial and legal advisers to protect the company from the effects” of the accounting scandal.

Investors had expected the decision, with some deeming it unavoidable, especially after lender BTG Pactual (BPAC3.SA) obtained on Wednesday a court decision overturning part of the firm’s protection from creditors.

Americanas is also facing seven different investigations launched by securities regulator CVM, as well as an arbitration process requesting compensation of 500 million reais to the firm and the trio that founded 3G Capital.

In a document filed with the court, law firms Basilio Advogados and Salomao Kaiuca Abrahao attributed the urgency in filing for bankruptcy to the creditors’ decision to seize the companies’ assets.

The retailer also mentioned a debt downgrade by ratings agencies, which prevented any new loans from being extended. S&P, Moody’s and Fitch all downgraded Americanas’ credit ratings following the accounting scandal.

Earlier, Americanas had said that its current cash position stood at only 800 million reais, down from a previously reported 7.8 billion.

Lucas Pogetti, a partner at M&A advisers RGS Partners, said a large part of Americanas’ previously disclosed cash position was linked to the prepayment of receivables or deposited with creditors.

“Naturally, when the banks became aware of the company’s real situation they began to adopt a more aggressive posture to protect themselves, consequently restricting access to resources,” Pogetti said.

In the filing, Americanas asks to exclude its fintech, Ame, from the bankruptcy protection, as it is regulated by the central bank, and for authorization to increase its capital.

Americanas’ stores are ubiquitous at Brazilian shopping malls. It e-commerce unit, which traded as a separate company before a recent restructuring, is one of the country’s top online retailers.

Chief executive Sergio Rial resigned last week, less than two weeks after taking the job, citing the discovery of “accounting inconsistencies” totaling 20 billion reais.

Rial, the former head of Banco Santander’s Brazilian arm (SANB3.SA), attributed the inconsistencies to differences in accounting for the financial cost of bank loans and debt with suppliers.

Chief financial officer Andre Covre, who had just joined Americanas as well, also left the firm, which has Brazilian billionaires Jorge Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles as reference shareholders.

Americanas said the reference shareholders intended to maintain the company’s liquidity at levels that allowed for a “good operation” of its stores, digital channel and other entities.

($1 = 5.2226 reais)

Reporting by Gabriel Araujo, Tatiana Bautzer and Peter Frontini in Sao Paulo and Carolina Pulice in Mexico City; Editing by Rosalba O’Brien and Bradley Perrett

Our Standards: The Thomson Reuters Trust Principles.

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S&P 500, Nasdaq snap losing streaks after jobless claims rise

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  • Weekly jobless claims rise in line with estimates
  • Moderna, Pfizer up as FDA authorizes updated COVID boosters
  • Exxon climbs after boosting buyback program
  • Indexes up: Dow 0.55%, S&P 0.75%, Nasdaq 1.13%

Dec 8 (Reuters) – The S&P 500 (.SPX) ended higher on Thursday, snapping a five-session losing streak, as investors interpreted data showing a rise in weekly jobless claims as a sign the pace of interest rate hikes could soon slow.

Wall Street’s main indexes had come under pressure in recent days, with the S&P 500 shedding 3.6% since the beginning of December on expectations of a longer rate-hike cycle and downbeat economic views from some top company executives.

Such thinking had also weighed on the Nasdaq Composite (.IXIC), which had posted four straight losing sessions prior to Thursday’s advance on the tech-heavy index.

Stocks rose as investors cheered data showing the number of Americans filing claims for jobless benefits increased moderately last week, while unemployment rolls hit a 10-month high toward the end of November.

The report follows data last Friday that showed U.S. employers hired more workers than expected in November and increased wages, spurring fears that the Fed might stick to its aggressive stance to tame decades-high inflation.

Markets have been swayed by data releases in recent days, with investors lacking certainty ahead of Federal Reserve guidance next week on interest rates.

Such behavior means Friday’s producer price index and the University of Michigan’s consumer sentiment survey will likely dictate whether Wall Street can build on Thursday’s rally.

“The market has to adjust to the fact that we’re moving from a stimulus-based economy – both fiscal and monetary – into a fundamentals-based economy, and that’s what we’re grappling with right now,” said Wiley Angell, chief market strategist at Ziegler Capital Management.

The Dow Jones Industrial Average (.DJI) rose 183.56 points, or 0.55%, to close at 33,781.48; the S&P 500 (.SPX) gained 29.59 points, or 0.75%, to finish at 3,963.51; and the Nasdaq Composite (.IXIC) added 123.45 points, or 1.13%, at 11,082.00.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 7, 2022. REUTERS/Brendan McDermid

Nine of the 11 major S&P 500 sectors rose, led by a 1.6% gain in technology stocks (.SPLRCT).

Most mega-cap technology and growth stocks gained. Apple Inc (AAPL.O), Nvidia Corp (NVDA.O) and Amazon.com Inc (AMZN.O) rose between 1.2% and 6.5%.

Microsoft Corp (MSFT.O) ended 1.2% higher, despite giving up some intraday gains after the Federal Trade Commission filed a complaint aimed at blocking the tech giant’s $69 billion bid to buy Activision Blizzard Inc . The “Call of Duty” games maker closed 1.5% lower.

The energy index (.SPNY) was an exception, slipping 0.5%, despite Exxon Mobil Corp (XOM.N) gaining 0.7% after announcing it would expand its $30-billion share repurchase program. The sector had been under pressure in recent sessions as commodity prices slipped: U.S. crude is now hovering near its level at the start of 2022.

Meanwhile, Moderna Inc (MRNA.O) advanced 3.2% after the U.S. Food and Drug Administration authorized COVID-19 shots from the vaccine maker that target both the original coronavirus and Omicron sub-variants for use in children as young as six months old.

The regulator also approved similar guidance for fellow COVID vaccine maker Pfizer Inc (PFE.N), which rose 3.1%, and its partner BioNTech, whose U.S.-listed shares gained 5.6%.

Rent the Runway Inc (RENT.O) posted its biggest ever one-day gain, jumping 74.3%, after the clothing rental firm raised its 2022 revenue forecast.

Volume on U.S. exchanges was 10.07 billion shares, compared with the 10.90 billion average for the full session over the last 20 trading days.

The S&P 500 posted 15 new 52-week highs and three new lows; the Nasdaq Composite recorded 82 new highs and 232 new lows.

Reporting by Shubham Batra, Ankika Biswas, Johann M Cherian in Bengaluru and David French in New York; Editing by Vinay Dwivedi, Sriraj Kalluvila, Anil D’Silva and Richard Chang

Our Standards: The Thomson Reuters Trust Principles.

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Business

Tesla plays ‘whack-a-mole’ with snags as deliveries fall for first time in two years

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July 5 (Reuters) – Tesla Inc (TSLA.O) faces a series of hurdles ranging from production snags to rising inflation that may hit profits, Wall Street analysts said on Tuesday, as the electric-car maker reported a fall in deliveries for the first time in two years.

Stung by China’s COVID-19 lockdowns and soaring costs, Tesla said on Saturday it delivered 254,695 vehicles in the second quarter, down about 18% from the first quarter. read more

Supply chain snarls at the company’s newer facilities in Texas and Germany also hurt production, with analysts warning that these issues may crimp Tesla’s profits.

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The world’s largest electric-car maker’s shares fell 3.4% to $658.50 in early trading on Tuesday.

“Tesla’s luster has dimmed yet again with this latest drop in deliveries coming in lower than expectations,” Hargreaves Lansdown analyst Susannah Streeter said, adding that this was a setback to the carmaker’s ambitions to stay at the front of the EV pack.

Model Y cars are pictured during the opening ceremony of the new Tesla Gigafactory for electric cars in Gruenheide, Germany, March 22, 2022. Patrick Pleul/Pool via REUTERS

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“Tesla is faced with a whack-a-mole scenario, the faster one problem is fixed, another pops up.”

J.P Morgan analysts, who cut their PT on the company’s shares by $10 to $385, said Tesla’s production and financial results could be hurt by company-specific execution issues at the carmaker’s new factories in Texas and Berlin.

Tesla CEO Elon Musk recently described both factories as “gigantic money furnaces” that are losing billions of dollars. read more

Streeter cautioned that the cost-of-living squeeze around the world due to red-hot inflation could have a knock-on effect on demand down the line.

Some analysts, however, expect a recovery toward the end of the year.

The Austin and Berlin plants are likely to remain a drag on results until they attain higher utilization rates, but expect volumes to rebound strongly in the second half of the year, Garrett Nelson, senior equity analyst at CFRA Research, said.

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Reporting by Eva Mathews in Bengaluru; Editing by Ankur Banerjee and Shounak Dasgupta

Our Standards: The Thomson Reuters Trust Principles.

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Business

Wall St slides as oil prices surge, Nasdaq confirms bear market

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  • Dow industrials confirm correction
  • Financial, travel shares lead declines
  • Energy stocks outperform broader market
  • Oil prices hit highest levels since 2008
  • Indexes down: Dow 2.37%, S&P 2.95%, Nasdaq 3.62%

March 7 (Reuters) – Wall Street’s main indexes fell sharply on Monday, with the Nasdaq Composite confirming it was in a bear market, as the prospect of a ban on oil imports from Russia sent crude prices soaring and fueled concerns about rising inflation.

Nasdaq ended down 20.1% from its Nov. 19 record high close, confirming the tech-heavy index has been in a bear market since hitting that record high, according to a widely used definition. That marks the Nasdaq’s first bear market since 2020, when the coronavirus outbreak crushed global economies.

The Dow Jones Industrial Average ended down 10.8% from its Jan. 4 closing record high, confirming it was in a correction. A correction is confirmed when an index closes 10% or more below its record closing level.

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Oil prices jumped to their highest levels since 2008 as the United States and European allies considered banning Russian oil imports, in response to the country’s invasion of Ukraine, while it looked less likely that Iranian crude would return swiftly to global markets.

Russia calls the campaign a “special operation”.

Energy (.SPNY), the standout S&P 500 group so far this year, was one of the only sectors logging a gain on Monday, rising 1.6%. read more

“That concern on oil has led to concerns on higher inflation and potential for stagflation,” said Mona Mahajan, senior investment strategist at Edward Jones. “I think there is just a broader concern that there may be a hit to growth from the consumer given higher prices at the pump.”

The Dow Jones Industrial Average (.DJI) fell 797.42 points, or 2.37%, to 32,817.38, the S&P 500 (.SPX) lost 127.79 points, or 2.95%, to 4,201.08 and the Nasdaq Composite (.IXIC) dropped 482.48 points, or 3.62%, to 12,830.96.

Amazon , Microsoft (MSFT.O) and Apple (AAPL.O) were among the top individual drags on the S&P 500 while the financials sector (.SPSY) fell 3.7%. The utilities sector (.SPLRCU), one of the defensive areas of the stock market, gained 1.3%.

Ukrainian officials said a bread factory had been hit by a Russian air strike as the country’s negotiators assembled for talks with Russian officials after previous rounds that brought no respite in the conflict. read more

Shares of United Airlines Holdings Inc fell 15% and Norwegian Cruise Line Holdings (NCLH.N) dropped 11.6%, among a broad downswing in travel and leisure stocks as the jump in oil prices threatened to disrupt a nascent recovery.

Stocks have struggled to start 2022 as concerns about the Russia-Ukraine crisis have deepened a sell-off initially fueled by worries over higher bond yields as the Federal Reserve is expected to tighten monetary policy this year to fight inflation. The S&P 500 marked its lowest closing level since June 2021.

“The market was already nervous about a Fed rate hike cycle,” said Burns McKinney, portfolio manager at NFJ Investment Group. “Now when you layer on higher energy prices on top of that… that has the investment community increasingly concerned that we may end up quickly moving toward the late stages of the market cycle.”

Investors are waiting for a U.S. consumer prices report on Thursday, with the Fed widely expected to hike rates later this month to combat surging inflation.

Declining issues outnumbered advancing ones on the NYSE by a 3.62-to-1 ratio; on Nasdaq, a 2.74-to-1 ratio favored decliners.

The S&P 500 posted 50 new 52-week highs and 69 new lows; the Nasdaq Composite recorded 63 new highs and 546 new lows.

About 17 billion shares changed hands in U.S. exchanges, compared with the roughly 13 billion daily average over the last 20 sessions.

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Reporting by Lewis Krauskopf, Stephen Culp and Caroline Valetkevitch in New York, Devik Jain and Sabahatjahan Contractor in Bengaluru; Editing by Sriraj Kalluvila and Lisa Shumaker

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Business

Wall St tumbles as yield spike hits tech, banks slump after Goldman miss

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The Nasdaq logo is displayed at the Nasdaq Market site in Times Square in New York City, U.S., December 3, 2021. REUTERS/Jeenah Moon

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  • Goldman shares drop 7% as profit hit by weaker trading
  • Benchmark U.S. Treasury yields jump to two-year highs
  • Activision soars on $68.7 billion Microsoft deal
  • Indexes down: Dow 1.45%, S&P 1.73%, Nasdaq 2.24%

Jan 18 (Reuters) – Wall Street’s main indexes fell sharply on Tuesday as weak results from Goldman Sachs weighed on financial stocks and tech shares continued their sell-off to start the year as U.S. Treasury yields rose to milestones.

Goldman Sachs(GS.N) shares fell 7.3% after the investment bank missed quarterly profit expectations amid weak trading activity. Financials (.SPSY) were the biggest-declining S&P 500 sector, falling 2.4%.

Benchmark U.S. Treasury yields jumped to two-year highs and two-year yields breached 1% as traders prepared for the Federal Reserve to be more aggressive in tackling unabated inflation.

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The steep ascent in yields to start 2022 has weighed in particular on tech and growth stocks, whose future expected cash flows are discounted more sharply as yields rise.

“The hot inflation prints have spooked the market that the Fed is going to move and so we are seeing this rise in yields,” said Mona Mahajan, senior investment strategist at Edward Jones.

“It’s not only the rise in yields but the rapid rise in yields … that really does cause some indigestion in the market, but particularly in growth, higher valuation, more speculative asset classes,” Mahajan said.

The Dow Jones Industrial Average (.DJI) fell 520.39 points, or 1.45%, to 35,391.42, the S&P 500 (.SPX) lost 80.55 points, or 1.73%, to 4,582.3 and the Nasdaq Composite (.IXIC) dropped 334.31 points, or 2.24%, to 14,559.44.

All 11 major S&P 500 sectors were trading lower with the heavyweight tech sector down 2.1%.

Declines in megacap stocks, including Microsoft (MSFT.O), Apple (AAPL.O) and Amazon , weighed most on the S&P 500 among individual shares.

A BofA survey showed that fund managers had cut their overweight positions in tech to their lowest levels since 2008, while another survey by Deutsche Bank found that a majority of respondents believed U.S. technology stocks are in bubble territory. read more

The Nasdaq fell as much as 9.5% below its Nov. 19 closing record. To confirm a correction the index would need to close 10% or more below the record close.

“We’re having a repricing going on as the market prepares for interest rate hikes and we still have a bit of a ways to go to prepare for three rate hikes or four rate hikes,” Michael O’Rourke, chief market strategist at JonesTrading. “We haven’t priced that in.”

Investors are zeroing in on next week’s Fed policy meeting for more clarity on central bankers’ next moves to rein in inflation. Data last week showed U.S. consumer prices increased solidly in December, culminating in the largest annual rise in inflation in nearly four decades. read more

In company news, Activision (ATVI.O) shares jumped 25% after Microsoft (MSFT.O) announced a deal to buy the video-game maker for $68.7 billion. Shares of other video game companies rose, with Electronic Arts (EA.O) up 4.5% and Take-Two Interactive Software (TTWO.O) up 2.2%. Microsoft shares fell 2%. read more

Declining issues outnumbered advancing ones on the NYSE by a 6.32-to-1 ratio; on Nasdaq, a 4.90-to-1 ratio favored decliners.

The S&P 500 posted 32 new 52-week highs and eight new lows; the Nasdaq Composite recorded 63 new highs and 534 new lows.

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Reporting by Bansari Mayur Kamdar, Shreyashi Sanyal, Sruthi Shankar in Bengaluru, Sinéad Carew in New York and Danilo Masoni in Milan; Editing by Maju Samuel and Lisa Shumaker

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Business

Tech rally lifts Wall Street from Omicron-driven rout

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  • S&P tech, consumer discretionary sectors lead gains
  • Banks sink as rate hike bets get postponed
  • Twitter down 0.6% after CEO Dorsey steps down
  • Indexes up: Dow 0.39%, S&P 1.10%, Nasdaq 1.50%

Nov 29 (Reuters) – Bargain buying in technology stocks drove Wall Street higher on Monday following a slump related to Omicron, while the Dow Jones lagged its peers as major banks fell and investors awaited more information on the new coronavirus variant.

The S&P technology subindex (.SPLRCT) jumped 2.1%, indicating that investors were likely favoring pandemic-resistant technology stocks amid growing fears of Omicron.

Gains in Amazon.com (AMZN.O) and Tesla Inc (TSLA.O) also drove the S&P consumer discretionary sector (.SPLRCD) 1.7% higher, with investors viewing Friday’s losses as a cue for bargain hunting into high-value tech names.

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“People are looking at it as a little bit of a sale on Friday and an opportunity to get into some areas of the market that got hit hard,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management.

Wall Street indexes had slumped between 2.0% and 3.5% on Friday following news of the Omicron variant. Investors were now awaiting an update from President Joe Biden on the virus and the country’s response, due later in the day. read more

Twitter Inc (TWTR.N) pared early gains and traded 0.1% lower after the social media firm said CEO Jack Dorsey will step down and be succeeded by Chief Technology Officer Parag Agrawal. The move ends Dorsey’s run as being CEO of two major technology companies, the second being digital payments firm Square Inc (SQ.N). read more

Square’s shares fell 0.4%.

The Dow (.DJI) severely lagged its peers, with major bank stocks weighing the most after Treasury yields fell from the day’s highs.

Investors were considering a potential delay to the Federal Reserve’s plans for raising interest rates, in light of the new virus variant.

“If Omicron did become a major issue, it would have to be bigger than the Delta waves which we just went through. There’s no question that the (Fed) taper would either be paused or delayed,” said Thomas Hayes, managing member, Great Hill Capital LLC, New York.

Merck & Co Inc (MRK.N) fell 4.5% and was also among the top drags on the Dow. The stock extended Friday’s losses after updated data from a study of its experimental COVID-19 pill showed lower efficacy in reducing risk of hospitalization and deaths than previously reported. read more

At 11:37 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 136.63 points, or 0.39%, at 35,035.97 and the S&P 500 (.SPX) was up 50.66 points, or 1.10%, at 4,645.28. The Nasdaq Composite (.IXIC) was up 232.46 points, or 1.50%, at 15,724.11.

Among other stocks, casino operators Wynn Resorts (WYNN.O) and MGM Resorts International (MGM.N) slipped 3.8% and 1.8%, respectively, tracking losses in their Macau units, which were rattled by arrests over alleged links to cross-border gambling and money laundering. read more

Advanced Micro Devices (AMD.O) rose 2.5% following a report electric-car maker Tesla has started using a new AMD chip in Model Y vehicles in China.

Tesla’s shares gained 4.6% after a report that chief Elon Musk urged employees to reduce cost of vehicle deliveries.

Apple Inc (AAPL.O) gained 1.9% after HSBC raised its price target on the iPhone maker’s stock.

Declining issues outnumbered advancers for a 1.06-to-1 ratio on the NYSE and for a 1.51-to-1 ratio on the Nasdaq.

The S&P index recorded four new 52-week highs and 15 new lows, while the Nasdaq recorded 29 new highs and 215 new lows.

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Reporting by Ambar Warrick in Bengaluru; Editing by Shounak Dasgupta and Maju Samuel

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China Evergrande bond trading suspended after downgrade

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SHANGHAI, Sept 16 (Reuters) – China Evergrande Group’s (3333.HK) main unit, Hengda Real Estate Group Co Ltd, applied on Thursday to suspend trading of its onshore corporate bonds following a downgrade, as the country’s No.2 property developer wrestles with a liquidity crisis.

The application follows repeated trading freezes of the bonds in recent days by the Shanghai and Shenzhen stock exchanges due to volatile trade.

Hengda received notice on Sept. 15 from rating agency China Chengxin International (CCXI) that the bonds’ ratings had been downgraded to A from AA, and that both the bonds ratings and its issuer rating were put on a watch list for further downgrades, it said in a stock exchange filing.

Hengda applied to suspend trade of its onshore corporate bonds for one day, it said. On the resumption of trade on Sept. 17, its Shanghai and Shenzhen exchange-traded bonds will only be traded through negotiated transactions.

A bond trader, who declined to be identified, said that the changes in the trading mechanism were likely aimed at limiting participation and curbing volatility.

“Many companies would adjust the trading mechanism of their bonds ahead of default,” he said.

The company’s January 2023 Shenzhen-traded bond was last quoted at 24.99 yuan on Wednesday, and its Shanghai-traded May 2023 bond traded at 30 yuan.

China Evergrande’s 8.75% June 2025 dollar bond was trading at 29.375 cents on Thursday morning, up about 4 cents from lows on Wednesday, according to financial data provider Duration Finance.

The indebted property developer is scrambling to raise funds to pay its many lenders and suppliers, as it teeters between a messy meltdown with far-reaching impacts, a managed collapse or the less likely prospect of a bailout by Beijing. read more

Worries over possible contagion from Evergrande’s debt crisis have spilled over to other Chinese high-yield issuers. An index of Chinese high-yield dollar debt (.MERACYC) fell to 374.646 on Thursday morning, its lowest level since April 14, 2020.

Reporting by Samuel Shen and Andrew Galbraith; Editing by Jacqueline Wong and Stephen Coates

Our Standards: The Thomson Reuters Trust Principles.

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