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U.S. stocks dropped on Wednesday, putting equities on pace for their fourth straight losing session as a World Bank forecast sparked concerns about weak economies and U.S. retail sales for December missed expectations. The Dow Jones industrial average was down 1.62 percent at 17,328.87, the S&P 500 was down 1.28 percent at 1,997.13 and the Nasdaq Composite was down 0.93 pct at 4,617.97.
** JPMORGAN CHASE & CO, $55.63, -5.46 pct
** WELLS FARGO & CO, $50.715, -2.19 pct
** BANK OF AMERICA CORP, $15.88, -3.47 pct
U.S. large cap banks backpedal after JPMorgan and Wells Fargo report fourth-quarter results.
JPMorgan, the biggest U.S. bank by assets, reported a 6.6 percent drop in quarterly profit as legal costs exceeded $1 billion in the wake of government probes into alleged wrongdoing and it set aside more to cover bad loans.
Wells Fargo, the biggest U.S. mortgage lender, reported a slight increase in quarterly profit as it lent more to commercial and industrial customers, but mortgage lending fell to $44 billion from $50 billion a year earlier and $48 billion in the third quarter.
Graphic on bank earnings - here
** GENERAL MOTORS CO, $33.87, -3.91 pct
The car maker’s chief financial officer, Chuck Stevens, said the number of car recalls would rise in 2015. The company, at the Global Auto Industry Conference, also said it did not expect to be profitable in Europe in 2015. It added that pricing in international markets was likely to be flat to slightly up and market share in North America would likely remain flat.
** ZIOPHARM ONCOLOGY INC, $9.04, +57.49 pct
** INTREXON CORP, $37.5, +32.18 pct
Drug developers buy license to make cancer drugs using what is touted as the next big technology. Ziopharm and Intrexon bought license from University of Texas MD Anderson Cancer Center to develop a new CAR-T cell therapy, which modifies the body’s own defenses to kill cancer cells.
** TESLA MOTORS INC, $192.2301, -5.88 pct
Chief Executive Elon Musk said on Tuesday that the electric luxury car maker’s sales in China were “unexpectedly weak” during the fourth quarter.
The company plans to boost production of electric cars to “at least a few million a year” by 2025 from fewer than 40,000 last year, Musk said.
** REGADO BIOSCIENCES INC, $1.1299, +31.38 pct
Privately held Tobira Therapeutics Inc is to buy Regado, which has been exploring strategic alternatives.
Regado suspended research on its blood-thinning drug in September. Tobira will own about 68 percent of the combined company, which will have a cash balance of nearly $60 million, enough to fund a study of Regado’s lead liver disease drug.
** ENTEROMEDICS INC, $1.4, +18.64 pct
The medical device maker said the U.S. FDA approved its implantable obesity device, Maestro rechargeable system, the first since 2007. The device controls hunger and blocks the primary nerve that regulates the digestive system.
EnteroMedics said additional data convinced the agency that benefits of the device outweighed the risks for certain patients. The company must conduct a five-year study on safety and effectiveness data on 100 patients.
** PIONEER ENERGY SERVICES, $3.815, -14.27 pct
Raymond James downgraded the oil and gas driller’s stock to “underperform” from “market perform”, saying the company is significantly exposed to declining rates for older rigs, which are likely the first to be dropped from their contracts in the downturn in capital spending.
A number of oil and gas companies have lowered capital spending plans for 2015, in line with plunging oil prices.
CHART - Oil price rout: link.reuters.com/zuw73w
** FOREST CITY ENTERPRISES INC, $24.11, +8.55 pct
The real estate developer said late on Tuesday that it would convert to a real estate investment trust (REIT) by Jan. 1, 2016.
BMO Capital Markets raised its price target to $28 from $25; reiterating their “outperform” rating.
** SMITH MICRO SOFTWARE INC, $1.57, +24.60 pct
The wireless and mobility software maker estimated fourth-quarter 2014 revenue and forecast full-year 2015 revenue above analysts’ average estimate.
** FREEPORT-MCMORAN INC, $18.29, -13.07 pct
Copper prices slid to their lowest in 5-1/2 years following cuts in global economic growth forecast by the World Bank and big falls oil prices. Three month copper on the London Metal Exchange was down 4.7 percent at $5,584.50 at 08:18 ET.
Oil prices have fallen more than 13 percent so far in January.
** GOODRICH PETROLEUM CORP, $2.47, -9.52 pct
** COMSTOCK RESOURCES INC, $4.53, -9.40 pct
** INTEROIL CORP, $34.16, -9.41 pct
** PARAGON OFFSHORE PLC, $2.29, -9.13 pct
** DENBURY RESOURCES INC, $6.47, -5.13 pct
Brent crude oil fell a little more on Wednesday as increased U.S. crude stockpiles and a weak World Bank growth forecast conspired to keep prices close to the near six-year lows touched in the previous session
Crude prices turned positive in early afternoon but failed to stage a significant rally as the World Bank reinforced worries about sluggish growth in energy demand.
The World Bank lowered its 2015 and 2016 world economic growth forecasts on Tuesday.
February Brent crude gained 31 cents to trade at $46.28 a barrel by 1627 GMT, while West Texas Intermediate crude for February rose 15 cents at $46.04
Small caps continue to be hit.
** CIRCOR INTERNATIONAL INC, $47.53, -11.92 pct
Stifel cut its rating on the provider of valves for oil and gas markets to “hold” from “buy”, citing a Circor distributor’s intent to switch to selling cheaper valves from a private competitor. The brokerage expects the switch to impact Circor’s revenue in 2015.
** DATAWATCH CORP, $5.795, -23.95 pct
Canaccord Genuity downgraded the data analytics software maker’s stock to “hold” from “buy” after the company’s first-quarter revenue estimate fell below the average analyst expectation.
The brokerage also cut its price target to $6.50 from $12.
** GAMESTOP CORP, $36.6, +11.69 pct
The world’s largest retailer of video game products said December same-store store sales rose 4.4 percent, driven by higher demand for games such as Call of Duty: Advanced Warfare, Grand Theft Auto V and Far Cry 4.
** ZELTIQ AESTHETICS INC, $29.275, +4.93 pct
The medical device maker estimated fourth-quarter revenue of $51 million-$52 million, compared with analysts’ estimate of $49.6 million.
Zeltiq said it expects 2015 revenue of about $230 million, above the $215.7 million estimated by analysts.
** OCWEN FINANCIAL CORP, $6.84, -12.08 pct
The mortgage collection company’s shares fell to their lowest since April 2009, reversing course from a near 8 percent rise premarket on Wednesday. The stock slumped 36 percent on Tuesday after California said it was seeking to suspend the company’s license for failing to submit papers showing it complies with state laws,
The state accounts for 15 percent of Ocwen’s total loans and 23 percent of total balance due, according to the Los Angeles Times.
Ocwen is also facing scrutiny from the New York state and federal governments over whether it improperly stalled short sales of property to collect more fees.
** BEBE STORES INC, $3.2415, +8.78 pct
Analysts at Janney Capital Markets upgraded the women’s fashion retailer’s stock to “buy” from “hold”, citing the company’s return to positive comparable sales. The brokerage also raised fair value to $5 from $3.
** PROGRESS SOFTWARE CORP, $24.465, -7.33 pct
The enterprise software maker forecast FY 2015 profit well below estimates, citing acquisition-related financing and a stronger dollar.
Progress Software also reported lower-than-expected fourth-quarter profit
** GOLDMAN SACHS GROUP INC, $179.31, -3.04 pct
The banker had to write down its loan to the troubled Portuguese bank Banco Espirito Santo SA in the fourth quarter, cutting the bank’s profit and some employees’ bonuses, people familiar with the matter told Reuters.
** NOKIA OYJ, $7.59, +1.74 pct
JPMorgan hiked its price target on the Finnish company’s shares to 9 euros from 8 euros. The brokerage also named the stock a top pick in its sector for 2015.
JPMorgan said weakness in the euro may benefit Nokia. The brokerage also said low exposure in the U.S. would help the company as it expects overall telecom capex to be down marginally in 2015 due to a decline in U.S. capex.
** IROBOT CORP, $31.04, -3.63 pct
J.P. Morgan Securities downgraded the robot maker’s stock to “underweight” from “neutral”, citing growth to decelerate in 2015. The brokerage also cut price target to $34 from $38.
** NEW MEDIA INVESTMENT GROUP INC, $20.83, -6.72 pct
The print and online publisher priced an offering of 7 million shares at $21.70, which represents a discount of 2.8 percent to the stock’s Tuesday close.
** MAGNA INTERNATIONAL INC, $96.25, -6.54 pct
The Canadian auto-parts maker and contract vehicle manufacturer forecast lower-than-estimated revenue for fiscal 2015.
Magna forecast total revenue of $34.4 billion to $36.1 billion for the year, short of analysts’ average estimate of $37.65 billion, according to Thomson Reuters I/B/E/S.
** FOOT LOCKER INC, $52.035, -6.09 pct
Goldman Sachs downgraded the footwear retailer’s stock to “sell” from “neutral”, saying company’s margins are at risk from a potential slowdown in growth in the basketball shoes category.
** NTT DOCOMO INC, $15.96, +3.10 pct
The Japanese telecom operator’s shares rose after India’s central bank allowed conglomerate Tata Sons Ltd to buy DoCoMo’s stake in their struggling Indian venture.
DoCoMo said on Jan. 4 that it had asked a London court to ensure Tata Sons found a buyer for its stake in the joint venture for $1 billion.
** MONEYGRAM INTERNATIONAL INC, $8.04, -4.85 pct
** WESTERN UNION CO, $17.22, -3.26 pct
Moneygram’s shares fall after larger rival Western Union said it would launch a service allowing U.S. customers to send cash directly to Mexican banks.
Western Union shares fall after Bank of America Merrill Lynch downgrades the two companies' to "underperform" from "neutral," according to StreetInsider.com. (bit.ly/1u4bBR7) (Compiled by Yashaswini Swamynathan in Bengaluru; Editing by Simon Jennings)