Charles Schwab, Lennar, Johnson & Johnson: Stocks That Defined the Week

Date : 10/04/2019 @ 10:51PM
Source : Dow Jones News
Stock : HP Inc (HPQ)
Quote : 20.01  0.0 (0.00%) @ 12:55PM

Charles Schwab, Lennar, Johnson & Johnson: Stocks That Defined the Week

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By Francesca Fontana 

Charles Schwab Corp.

The race to zero in the money management industry is hitting bottom. Charles Schwab said Tuesday it would eliminate commissions on trades made on its mobile and web channels, prompting shares to fall 9.7%. Rivals such as TD Ameritrade Holding Corp. and E*Trade Financial Corp. quickly followed suit, intensifying a fierce price war across the financial sector. Interactive Brokers Group Inc. set the stage for the moves last week when it said it would launch a zero-commission stock-trading service.

United States Steel Corp.

A big steelmaker is forging a new partnership. U.S. Steel plans to acquire a 49.9% stake in its lower-cost rival Big River Steel for $700 million in cash, with an option to take full ownership within four years, the company said Tuesday. Big River's technology and ability to produce sheet steel by melting scrap in an electric furnace will make U.S. Steel more cost-competitive with rivals such as Nucor Corp. and Steel Dynamics Inc. Domestic steel prices have fallen sharply in the past year as manufacturers' demand for steel waned, making it more difficult for U.S. Steel to make a profit with its high-cost structure and pushing it to pursue a lower-cost partner. U.S. Steel shares rose 3.3%.

Johnson & Johnson

Johnson & Johnson said Tuesday it agreed to a $20.4 million deal to avoid a coming trial accusing the company of helping spark an opioid-addiction crisis in two Ohio counties. The settlement makes J&J the fourth drugmaker to reach such a deal ahead of the trial, which is considered a bellwether for thousands of opioid-related lawsuits that municipalities and states have filed against drugmakers. The company said the settlement allows it "to avoid the resource demands and uncertainty of a trial as it continues to seek meaningful progress in addressing the nation's opioid crisis." J&J shares gained 1.6% Wednesday.

Lennar Corp.

Low interest rates are propping up the nation's biggest home builders. Due to better-than-expected earnings Lennar was among the best S&P 500 performers during a market rout on Wednesday, with shares adding 3.8%. The Miami company reported a bigger profit than analysts anticipated and reported an increase in orders and deliveries. "We continue to believe the basic underlying housing market fundamentals of low unemployment, higher wages and low inventory levels remain favorable," Lennar Chairman Stuart Miller said in prepared remarks. During the company's earnings call, Mr. Miller added that lower interest rates have stimulated demand and improved the affordability of new homes.

Constellation Brands Inc.

Constellation Brands' big bet on cannabis isn't working out. The Corona brewer swung to a loss in the latest quarter, and its latest results included roughly $500 million in losses from its investment in Canadian marijuana grower Canopy Growth Corp. Constellation was one of the first brewers to invest in cannabis and put roughly $4 billion into Canopy in 2018, giving it a 38% stake in the company. Constellation's investment lost about $1.3 billion of value in the latest quarter, including a $839 million decline in Canopy's share price. Constellation shares lost 6.1% Thursday.

Credit Suisse Group AG

A spy scandal is roiling a Swiss banking giant. Credit Suisse Chief Operating Officer Pierre-Olivier Bouée resigned after an internal probe found he ordered the surveillance of the bank's former wealth-management chief, Iqbal Khan, without discussing it with Chief Executive Tidjane Thiam or other senior bank officials. The probe cleared the CEO of any involvement. Credit Suisse also said it found no evidence Mr. Khan, who started work at rival UBS Group AG on Tuesday, made any attempt to poach employees or clients, contrary to suspicions that people close to the bank had described as underpinning the surveillance. American depositary shares of Credit Suisse fell 2.7% Tuesday.

HP Inc.

HP may be printing new pink slips. Shares of the computer hardware maker plummeted 9.6% Friday after the company said it could eliminate 7,000 to 9,000 jobs from its roughly 55,000 workforce over the next three years. Incoming Chief Executive Enrique Lores's restructuring plan also aims to revive lagging printer sales. HP is changing its sales model: The company will still offer customers the option of buying their discounted printers, but then will lock them into buying ink from HP as well, rather than from other, cheaper vendors. Otherwise, they can opt to purchase printers at a higher price that would allow them to use third-party ink cartridges.

Write to Francesca Fontana at francesca.fontana@wsj.com

 

(END) Dow Jones Newswires

October 04, 2019 18:36 ET (22:36 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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