U.S. stocks fell on Tuesday after a four-session rally as Citigroup reported weaker-than-expected quarterly earnings, overshadowing developments in the Washington budget and debt-limit talks.
The Dow Jones industrial average was down 0.16 percent. The Standard & Poor’s 500 Index was down 0.11 percent while the Nasdaq Composite Index was up 0.09 percent.
** CITIGROUP INC, $49.19, down 1 pct (9:33 a.m. ET)
The company reported a marginal fall in adjusted quarterly profit from ongoing businesses after the Federal Reserve’s decision to continue its bond-buying program for longer than expected slowed trading by clients.
** SAVIENT PHARMACEUTICALS INC, $0.10, down 83 pct (9:34 a.m. ET)
The U.S. biotech firm filed for Chapter 11 bankruptcy protection in a Delaware court on Monday and said it has agreed to sell most of its assets to Sloan Holdings CV for about $55 million. The agreement with Sloan, a unit of US WorldMeds LLC, would serve as a “stalking horse” bid in a court-supervised auction of Savient’s assets, the company said.
** JOHNSON & JOHNSON, $90.67, up 1 pct (9:34 a.m. ET)
The company reported better-than-expected quarterly results due to strong growth for its prescription drugs, including new treatments for cancer and medication to prevent blood clots. Johnson & Johnson slightly raised its full-year profit forecast.
** ATLAS PIPELINE PARTNERS LP, $38.05, down 4.6 pct (10:54 a.m. ET)
Robert W. Baird & Co analysts cut their rating on the natural gas gathering and processing company’s stock to “neutral” from “outperform,” according to Theflyonthewall.com.
** OMEROS CORP, $12.04, up 4.4 pct (10:44 a.m. ET)
The drug developer said the U.S. Food and Drug Administration (FDA) agreed with its plan to test its drug, OMS302, in pediatric patients undergoing a type of cataract extraction. The FDA said the successful completion of the study would make the drug eligible for an additional six months of marketing exclusivity in the United States.
The drug has been submitted for FDA approval as a treatment for maintaining pupil dilation and reducing postoperative pain following cataract and other lens replacement surgery.
** CHARLES SCHWAB CORP, $23.02, up 4.6 pct (9:59 a.m. ET)
The retail brokerage firm said it expected revenue to grow 3 percent to 5 percent faster than expenses in 2014, reversing a higher-than-expected jump in costs in the first half of the year. The company made the forecast as it announced that its third-quarter profit rose 17 percent from a year earlier to $290 million while revenue jumped 15 percent to its highest level in 13 years.
** XENOPORT INC, $6.12, up 6 pct (9:35 a.m. ET)
Shareholder Clinton Group Inc urged the biopharmaceutical company to hire a new chief executive and asked for a change in capital allocation. In a letter, the Clinton Group said it believed “Xenoport’s assets are worth substantially more than the current stock price implies.”
The group said it owned more than 1.3 million shares of Xenoport’s common stock. The company had 47.7 million outstanding shares as of July 15.
** TERADATA CORP, $43.92, down 16 pct (11:35 a.m. ET)
** INFORMATICA CORP, $37.06, down 3 pct
Teradata, a data analytics firm, cut its full-year earnings forecast by about 10 percent on Monday after preliminary third-quarter results missed estimates on the back of sliding revenue.
Business software maker Informatica’s stock fell as its software extracts data from operating systems, catalogs and delivers it to a Teradata system for analysis.
** COCA-COLA CO, $38.08, up 0.4 pct (9:36 a.m. ET)
The company reported higher quarterly earnings and a lower revenue on Tuesday, helped by strong global sales of its Coca-Cola brand products but challenged by volatility in some parts of Europe.
** FEDEX CORP, $117.87, up 2 pct (9:37 a.m. ET)
The world’s No. 2 packaging company said it has authorized a share repurchase program of up to 32 million of its outstanding shares of common stock. The company bought back 2.8 million shares during the quarter ended August. It had 317 million common shares outstanding as on Sept. 30.
** DOMINO‘S PIZZA INC, $65.60, down 5 pct (9:37 a.m. ET)
The second-largest U.S. pizza chain missed analysts’ estimates on its adjusted earnings by a cent, reporting 51 cents per share as general and administrative expenses rose about 8 percent to $53.8 million.
** MAC-GRAY CORP, $21.00, up 40 pct (9:53 a.m. ET)
The coin laundry operator said it would sell itself to CSC ServiceWorks Inc for about $524 million, including debt. Mac-Gray, which operates laundries in apartment buildings and student residence halls, said the offer for $21.25 per share is at a premium of 42 percent to Mac-Gray’s Monday close.
** MER TELEMANAGEMENT SOLUTIONS LTD, $2.90, up 58 pct (10:43 a.m. ET)
The Israel-based vendor of telecommunications expense management and billing software said in a filing that it entered into a three-year agreement with SBC Communications LLC, an internet and cable television services company, to provide its cloud and managed services software.
** NOVOGEN LTD, $6.21, up 62 pct (10:39 a.m. ET)
Shares of the Australia-based company, which is developing a cancer drug, rose after an article on investment website SeekingAlpha.com said that major pharmaceutical companies such as Merck or Bristol-Myer could partner with Novogen. (link.reuters.com/zad83v)
The article cited Novogen's annual report, which said the company was in talks concerning a collaboration that would allow it to work towards individualizing chemotherapy. The talks are expected to conclude by the end of the year. (link.reuters.com/ced83v)
** VEECO INSTRUMENTS INC, $36.10, down 5 pct (11:38 a.m. ET)
Oppenheimer analysts cut their rating on the LED equipment maker’s stock to “perform” from “outperform,” saying they expect a “severe correction” of Wall Street estimates when the company reports its pending earnings statements.
Veeco, which has not filed quarterly statements since October last year due to an accounting review, faces a delisting deadline of Nov. 4.
** COLDWATER CREEK CO, $0.88, down 30 pct (9:37 a.m. ET)
The women’s apparel and accessories retailer said it was exploring strategic alternatives, including a sale of the company. The company discontinued its quarterly guidance after struggling with declining sales.
** INSMED INC, $14.63, up 11.6 pct (10:38 a.m. ET)
The company said it had completed patient enrolment in a mid-stage trial of its drug Arikace, which is intended to treat lung disease caused by nontuberculous mycobacteria, found in soil and water.
** TESLA MOTORS INC, $188.64, up 5 pct (9:59 a.m. ET)
Wedbush raised its rating on the electric sports car maker’s stock to “outperform” from “neutral,” citing a survey that pointed to a larger-than-expected market for the company’s so-called Gen 3 models, a new family of battery-powered compacts priced from around $35,000. The survey indicated good receptiveness of mainstream car buyers to purchase electric vehicles and generally realistic expectations around vehicle performance and costs, analysts wrote in a note to clients.
** GENERAL CABLE CORP, $32.14, down 5 pct (10:03 a.m. ET)
The cable maker said that due to some accounting errors, its financial statements from 2008 through 2012 as well as those for the quarter ended March 29 should no longer be relied upon.
** BASIC ENERGY SERVICES INC, $12.39, down 4.3 pct (10:36 a.m. ET)
The oilfield services company said it expected fourth-quarter revenue to fall by about 6-7 percent from a quarter earlier due to seasonal factors. Basic Energy said that due to the seasonal slowdown, lower utilization levels could increase competitive pressure in some markets.
** ARENA PHARMACEUTICALS INC, $4.62, up 6 pct (9:50 a.m. ET)
** VIVUS INC, $10.23, down 2.5 pct
Japan’s Eisai Inc, Arena’s marketing partner for its obesity drug Belviq, said it would add over 200 contract sales representatives focusing on educating healthcare providers in the United States about the drug. Eisai plans to increase its sales force to about 400 by December, double the number when Belviq became available in June.
Earlier on Tuesday, Vivus reported third-quarter prescriptions of its own weight-loss drug, Qsymia - which competes with Belviq - of about 108,000, above the 81,000 prescriptions it reported in the second quarter.
** MICROSOFT CORP, $34.78, up 1 pct (9:38 a.m. ET)
Jefferies upgraded the company’s stock to “buy” from “hold” and raised its price target to $42 from $33 citing faster growth, higher margins from sales of Windows operating system licenses, and growing recurring revenue from subscription sales of Office productivity software, servers, and Azure cloud service to enterprise customers.
The brokerage also expects the company to benefit from patent licensing agreements with makers of smartphones and tablets running Google Inc’s Android operating system.
** FLIR SYSTEMS INC, $30.26, down 9 pct (10:04 a.m. ET)
The sensor systems maker said it would close up to six plants in the United States and Europe and transfer those operations to larger factories. The company said it also intended to consolidate its optics and laser manufacturing businesses.
** OMNICOM GROUP INC, $64.95, up 1.6 pct (9:39 a.m. ET)
The company reported a 2.5 percent rise in quarterly revenue due to an increase in advertising income from its biggest market, the United States. The company reported net income of $196 million, or 74 cents per share, in the three months ended September, compared with $203.9 million, or 74 cents per share, a year earlier.
** MOLYCORP INC, $5.77, down 19 pct (9:39 a.m. ET)
The rare earths producer said its cash cushion has dwindled to insufficient levels and announced its second major financing in less than a year. Molycorp said it could sell up to $200 million worth of common stock in a public offering, or up to $230 million if its underwriters exercise their options in full.
** ALCATEL-LUCENT, $3.69, down 2 pct (9:39 a.m. ET)
The telecoms company’s future is at risk after it missed key technological shifts and has been in the red since 2006, Chief Executive Michel Combes warned as workers prepared to protest against job cuts. The Franco-American group last week unveiled plans to slash 10,000 jobs worldwide, arguing the cuts were its last chance to stem years of losses and turn the company around.
** RIO TINTO, $50.95, up 2 pct (9:40 a.m. ET)
The global miner boosted its 2013 copper output forecast after a better-than-expected recovery at its landslide-hit U.S. Kennecott mine, and posted record iron ore and coal output in the third quarter. Copper production was also buoyed by a ramp-up at the Oyu Tolgoi mine in Mongolia.
** PACKAGING CORP OF AMERICA, $58.95, up 1 pct (9:40 a.m. ET)
The maker of containerboard and corrugated packaging products reported on Monday third-quarter results that beat analysts’ estimates as corrugated products shipments rose 7.8 percent. The company also forecast fourth-quarter earnings of 84 cents per share, excluding items. Analysts on average were expecting 83 cents, according to Thomson Reuters I/B/E/S.
** BOEING CO, $118.56, down 0.8 pct (9:42 a.m. ET)
The aircraft maker on Monday rebutted a Pentagon inspector general report that said the company overcharged the U.S. Army by up to $16.6 million on a $4.4 billion helicopter contract and said it was still waiting to receive the final report under a Freedom of Information Act request.
** BLACKBERRY LTD, $8.09, down 0.6 pct (9:43 a.m. ET)
The Canadian smartphone maker sought on Monday to reassure its restive customers and partners that it was financially stable and “here to stay,” even though it announced massive layoffs and sources say it is in talks to sell all or part of the company. In an open letter published in 30 news outlets across nine countries, the company stressed that its customers could continue to count on BlackBerry and its products, despite the challenges it is facing and the changes it is undergoing.
** CANADIAN NATIONAL RAILWAY CO, $104.51, down 0.6 pct (9:44 a.m. ET)
Talks between the railroad workers’ union and Canadian National Railway Co have broken down, raising the possibility of a strike or a lockout by Oct. 28 at Canada’s largest railroad operator, the union said on Monday.
** WI-LAN INC, $4.14, down 1.3 pct (9:47 a.m. ET)
** HEWLETT PACKARD CO, $22.77, down 0.6 pct
** NOVATEL WIRELESS INC, $2.96, up 4.6 pct
Patent licensing company Wi-Lan said it entered a patent license agreement with Hewlett-Packard and settled all pending patent litigation. Under the agreement, Hewlett-Packard was granted a license related to some WiLAN patents and HP wireless products. Financial terms were not disclosed.
Wi-LAN also said it settled all pending litigation with Novatel Wireless, granting the company license to certain WiLAN products.
** YAHOO INC, $33.71, down 1 pct (9:55 a.m. ET)
The company’s advertising revenue isn’t expected to show much improvement during the third quarter, but Wall Street will be looking for signs that the Web portal is making gains growing its audience and enticing people to spend more time on its websites. Investors will also home in on the included results of Chinese e-commerce giant Alibaba, in which Yahoo owns a 24 percent stake, and which is planning for a massive public offering.
** INTEL CORP, $23.52, up 0.3 pct (9:55 a.m. ET)
When the company reports results, investors will want evidence that recently appointed Chief Executive Brian Krzanich’s new focus on mobile is leading to concrete results. The company has promised its new Bay Trail mobile chip would find its way into a slew of new tablets but it is unclear how much progress Intel has actually made in mobile and whether the new chips could also cannibalize sales of more profitable PC processors.
** RESOURCE CAPITAL CORP, $5.81, down 4 pct (10:29 a.m. ET)
The commercial real estate and commercial finance company said on Monday that it planned to offer $100 million of convertible senior notes due 2018 in an underwritten public offering.
** LANDEC CORP, $11.92, down 3 pct (10:37 a.m. ET)
Feltl & Co cut its rating on stock of the company, which makes polymer products for agricultural and medical industries, to “buy” from “strong buy,” according to Theflyonthewall.com. (Compiled by Sneha Banerjee in Bangalore; Editing by Kirti Pandey)