T-Mobile, Boeing, Disney: Stocks That Defined The Week
July 26 2019 - 6:14PM
Dow Jones News
By Francesca Fontana
The S&P 500 and Nasdaq Composite ended the week at records
as investors weighed the latest batch of second-quarter earnings
from some large tech names.
In individual moves, Walt Disney's "The Lion King" remake became
the company's fifth blockbuster of 2019; Apple agreed to buy a
majority of Intel's smartphone-modem chip business for $1 billion;
and the Justice Department approved T-Mobile's merger with
Sprint.
Walt Disney Co.
Talk about the circle of life. Twenty-five years after the
release of "The Lion King," a remake of the animated classic became
another Disney blockbuster, grossing $185 million at the domestic
box office on its opening weekend. The film appears poised to
become the most successful yet of Disney's remakes of its older
animated works. Critics said the new film lacked the emotional pull
of the original, but audiences gave it an "A" grade, according to
the CinemaScore market-research firm. In 2019 alone, Disney has
released hits such as "Captain Marvel," "Avengers: Endgame," "Toy
Story 4" and "Aladdin," with March's "Dumbo" as its sole misfire.
Disney shares gained 0.7% Monday and 3.4% for the week.
T-Mobile US Inc.
The Justice Department didn't hang up on T-Mobile's merger with
Sprint Corp. Regulators approved the tie-up Friday after the
companies agreed to create a new wireless carrier by selling assets
to satellite-TV provider Dish Network Corp. T-Mobile shares rose
5.4% and Sprint shares gained 7.4% Friday. The two carriers have
spent weeks negotiating with antitrust enforcers over the transfer
of building blocks for a network to Dish in order to satisfy
concerns that the merger would hurt consumers by reducing price
competition.
Tesla Inc.
Tesla keeps hitting new potholes. Chief Executive Elon Musk said
Wednesday that Tesla's technology chief, JB Straubel, will be
transitioning to a senior advisory role as his responsibilities are
being taken over by Drew Baglino. Mr. Straubel's departure marks
one of the highest-profile exits from the electric auto maker.
Meanwhile, Tesla shares dropped 14% Thursday after the company also
reported a bigger-than-expected second-quarter loss. Tesla
reiterated that it would deliver 360,000 to 400,000 vehicles this
year but warned it would emphasize expanding its production
capacity and model lineup over increasing the bottom line.
Facebook Inc.
Facebook is now paying a real price for its privacy practices.
It agreed to a record $5 billion fine to settle a long-running
investigation by the Federal Trade Commission. A day later, on
Thursday, its shares lost 2.4%. The company agreed to better police
its data-privacy practices after the yearlong FTC probe found the
company had repeatedly used deceptive disclosures and account
settings to lure users into sharing personal information,
undermining their actual privacy preferences. Facebook wrestled
with another privacy misstep earlier in the week when news emerged
that a technical error had recently allowed children on a Facebook
messaging app to interact with users who weren't approved by their
parents.
Boeing Co.
Boeing shares fell 3.7% Thursday as the aerospace giant said it
wouldn't bid on a giant Pentagon program to replace the nation's
land-based nuclear missiles, a potential opportunity valued at more
than $60 billion. Earlier, Boeing said Wednesday it might slow or
halt production of its 737 MAX jetliner if regulators don't approve
its return to service by the end of this year. The warning came as
the company reported its biggest quarterly loss to date, after
taking an initial $7 billion hit on the grounding and slowed
production of the MAX.
Amazon.com Inc.
Amazon can't quit New York City. Months after rejecting the Big
Apple as the site of a new campus, it is scouring the city for
office space. Its search includes the historic building that
formerly housed Lord & Taylor's flagship store, The Wall Street
Journal reported Thursday. The e-commerce giant has held talks with
WeWork Cos. to lease as much as the entire 12-story building -- big
enough to fit several thousand employees, the Journal reported.
Amazon has been considering multiple locations for hundreds of
thousands of square feet of space, including the historic Farley
Post Office, which sits across Eighth Avenue from Pennsylvania
Station. Shares fell 1.6% Friday after the company's record profit
streak ended.
Apple Inc.
Apple is showing new appetite for acquisitions. The Silicon
Valley giant agreed to buy a majority of Intel Corp.'s
smartphone-modem chip business for $1 billion, the company said
late Thursday. Apple will acquire smartphone modem operations as
well as a portfolio of patents and about 2,200 staff members, the
companies said. Once completed, the deal will be Apple's
second-largest acquisition after the 2014 purchase of Beats
Electronics LLC for $3 billion. Intel made the announcement as it
reported a 17% drop in second-quarter profit, driven by weaker
demand in China amid trade tensions. The Wall Street Journal had
reported earlier this week that the companies were close to a deal.
Apple shares gained 2.5% for the week.
Write to Francesca Fontana at francesca.fontana@wsj.com
(END) Dow Jones Newswires
July 26, 2019 17:59 ET (21:59 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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