UnitedHealth, Deutsche Bank, Netflix: Stocks That Defined the Week
July 12 2019 - 6:59PM
Dow Jones News
By Francesca Fontana
The Dow Jones Industrial Averaged and the S&P 500 crossed
major milestones this past week as the Federal Reserve chief
sounded a dovish view and President Trump backed off a plan to curb
drug rebates.
Among individual movers this past week, Boeing stands to lose
its place as the No. 1 plane maker to rival Airbus as its 737 MAX
woes go on; Deutsche Bank's restructuring plan wasn't
well-received; and Twitter announced a tougher policy on hate
speech.
UnitedHealthcare Group Inc.
A rally in health-care stocks helped lift the Dow to a record
Thursday after the Trump administration abandoned a plan to curb
drug rebates. The reversal relieved concerns from pharmacy-benefit
managers that stood to lose rebates from drugmakers. UnitedHealth
led the Dow higher, with shares gaining 5.5% Thursday, while Cigna
Corp. jumped 9.2% and CVS Health Corp. added 4.7%.
Deutsche Bank AG
The German lender unveiled a broad restructuring plan in an
attempt to save itself after years of decline. Deutsche Bank said
the overhaul -- which involves cutting 18,000 jobs by 2022,
significantly shrinking its investment bank and reducing costs by
one-quarter -- would lead to a net loss of around $3 billion for
the second quarter. Analysts expressed concern surrounding the
bank's expectation to make a profit in 2020, and President Trump
called his longtime lender a "now badly written about and maligned"
bank. Deutsche Bank shares fell 5.4% Monday.
Boeing Co.
Boeing is poised to lose its place as the No. 1 plane maker to
rival Airbus as deliveries fell by more than a third in the first
half with the grounding of its 737 MAX aircraft after two fatal
crashes. The latest blow: A Saudi discount airline called flyadeal
said Sunday that it would purchase up to 50 Airbus jets instead of
the Boeing jets it had committed to buy in December. Shares of
Boeing lost 1.3% Monday after the flyadeal deal, valued at more
than $5.5 billion, fell through. Separately, Boeing said late
Thursday that the head of its 737 MAX production facility will
retire after less than a year.
Acacia Communications Inc.
Cisco Systems agreed Tuesday to buy the networking company for
$70 a share, a roughly 46% premium to Acacia's closing price of
$48.06 on Monday. The deal, subject to regulatory reviews in the
U.S. and China, will boost Cisco's optical-networking portfolio and
will allow its hardware users to drive more data over high-speed
internet networks amid rising performance demands with the rollout
of 5G wireless. The $2.6 billion deal -- Cisco's latest to bring a
major supplier in-house -- is the company's largest purchase since
2017. Acacia shares surged 35% Tuesday, while Cisco shares edged up
0.3%.
Twitter Inc.
Twitter said Tuesday that it updated its policy on hateful
conduct to better protect religious groups, the social-media
company's latest bid to patrol speech and prevent abuse. Under the
modified policy, any new or old tweets that contain language that
"dehumanizes on the basis of religion" will be removed when
reported by users or found by the company. Separately, a federal
appeals court in New York ruled Tuesday that President Trump's
practice of blocking some users on Twitter violates the free-speech
protections of the First Amendment. Twitter shares rose 3.3%
Tuesday.
Netflix Inc.
First Jim and Pam, now Ross and Rachel. After losing "The
Office," Netflix will also lose "Friends" after AT&T's
WarnerMedia said its new direct-to-consumer service will be the
exclusive streaming home of reruns of the sitcom. WarnerMedia said
its new service, HBO Max, will launch in the spring after a test
run later this year. The loss is another blow to Netflix as
competition heats up for streaming content; Disney has also
indicated it would take back shows it has sold to Netflix when
those deals expire. Netflix shares slipped 1.9% for the week.
Anheuser-Busch InBev SA
The Budweiser maker called off the nearly $10 billion listing of
its Asian business, abandoning what would have been the year's
largest initial public offering. AB InBev's American depositary
receipts shed 3% Friday after the news was announced. The Hong Kong
IPO of the unit aimed to raise between $8.3 billion and $9.8
billion, and The Wall Street Journal reported that the unit had
guided investors to expect it would price in the lower half of a
previously indicated range. AB InBev said it would "closely monitor
market conditions" while it weighs options.
(END) Dow Jones Newswires
July 12, 2019 18:44 ET (22:44 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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