US stocks fell for the first time in 10 days on Thursday, temporarily ending a streak that took stocks to new highs for the first time in 13 months.
Intel shares fell the most on the Dow Jones Industrial Average, by 4%, after the company’s earnings results on Wednesday showed that its most important business — the data center group — slowed last quarter.
First, the scoreboard:
- Dow: 18,515.73, -79.30, (-0.43%)
- S&P 500: 2,165.06, -7.96, (-0.37%)
- Nasdaq: 5,073.90, -16.03, (-0.31%)
- WTI crude oil: $44.75, -$1.00, (-2.19%)
- The Department of Justice is suing to stop the mergers of four health insurance giants. The department filed suits to block the merger of Anthem and Cigna as well as Aetna and Humana. The combined value of the deals was roughly $91 billion. The suits, filed in US District Court in Washington, DC, said that the mergers would be anticompetitive, Attorney General Loretta Lynch said in a press conference announcing the moves. “If the big five were to become the big three, not only would the bank accounts of the American people suffer, but the American people themselves,” Lynch said.
- Warren Buffett, Jamie Dimon and 11 other corporate titans want to change some of Wall Street’s worst business practices. They signed on to a list of suggested changes for companies to adopt, titled “Commonsense Corporate Governance Principles.” Among the six proposals, companies should not have to report earnings guidance, should be clear about the difference between GAAP and adjusted earnings, and boards should have an independent lead director, especially if the CEO has a dual role on it. To the final point, Business Insider’s Linette Lopez noted that Dimon is both CEO and chairman of JPMorgan, and has fought hard to maintain control of the bank. Other signees to the letter included GM CEO Mary Barra and ValueAct Capital CEO Jeff Ubben.
- Exxon is buying InterOil in a deal worth as much as $2.5 billion. The energy giant outbid Oil Search to boost its business in Papual New Guinea, where InterOil has a huge presence, and to strengthen its liquefied natural gas position. In a statement on Thursday, Exxon said it will pay $45 per share for the oil and gas company, which has a market cap of about $2.4 billion. In addition, InterOil shareholders will get an additional contingent resource payment of $7.07 per share for each trillion cubic feet equivalent (tcfe) of the Elk-Antelope field that’s above 6.2 tcfe, up to a maximum of 10 tcfe.
- Something surprising happened with existing home sales in June. The sales rose 1.1% to a seasonally adjusted annual rate of 5.57 million, beating an expected fall, according to the National Association of Realtors. But that wasn’t it. “The gain is even more surprising given a continued shortage of homes available for sale, with inventory down almost 6% compared to the same time a year ago,” noted Zillow chief economist Svenja Gudell in a note. She believes limited inventory and high prices will continue to thwart a return to a ‘normal’ market.
- In other housing data, home prices rose 0.2% month-over-month in May, less than expected, according to the Federal Housing Finance Agency. Economists had expected prices to rise by 0.4%, according to Bloomberg.
- Initial jobless claims unexpectedly fell last week to 253,000, lower than economists’ expectations for an increase to 265,000. Claims have not risen above 300,000 for 72 straight weeks — the longest stretch in 43 years. The data are often volatile around this time of year because of seasonal adjustment issues, but they still send an upbeat message about labour-market conditions, according to JPMorgan’s Daniel Silver.
- Pandora rejected an offer to sell itself for more than $3.4 billion. The Wall Street Journal reported that the offer came from Liberty Media CEO Greg Maffei, whose company controls Sirius XM. It was more of an exploration than a firm offer, and Pandora also lent ears to Apple and Amazon, sources told the Journal. In March, Pandora brought back founder Tim Westergren to be its CEO and help launch an on-demand product to compete with the likes of Spotify and Apple Music. This endeavour has not yet excelled or flopped.