STOCKS GO NOWHERE, VALEANT CRASHES: Here's what you need to know

Stocks closed little changed on Thursday. But shares of Valeant Pharmaceuticals suffered another breathtaking plunge, and have nearly halved in value since the controversy blew open last month.

First, the scoreboard:

  • Dow: 17,868.91 +1.33 (0.01%)
  • S&P 500: 2,100.77, -1.54, (-0.07%)
  • Nasdaq: 5,127.75, -14.73, (-0.29%)

And now, Thursday’s top stories:

  1. Valeant shares tanked by about 16%, falling to as low as $US73.72 a share. That’s a near-50% drop since October 21, when Citron Research first published allegations on Valeant’s relationship with Philidor, and asked whether it was an Enron-like fraud. On Wednesday, Senators Claire McCaskill (D-Missouri) and Susan Collins (R-Maine) announced that they were launching an investigation into Valeant and other pharmaceuticals on price gouging. In a statement today, Valeant said its board had “full confidence” in CEO Mike Pearson.
  2. Valeant’s tumble today meant more pain for hedge fund manager Bill Ackman, who’s lost more than $US2 billion on his bet on the company. Ackman sent a letter of support to Pearson today, and said he was as confident as the company’s board.
  3. Facebook’s market cap crossed $US300 billion today, as the company’s shares rallied on solid earnings. The social network surpassed General Electric’s worth. Shares rallied to an all-time high of $US110.65. After Wednesday’s closing bell, the company reported that its revenues rose 41% year-on-year to $US4.5 billion, and monthly active users totaled 1.55 billion in the third quarter — both topping forecasts.
  4. SeaWorld shares fell 7% in afternoon trade after less-impressive earnings numbers. The marine-mammal park said bad weather, legal costs, and reputation control caused it to lower its earnings expectations for 2016. Shares are about 40% lower than they were in early October 2013, right before CNN published the Blackfish documentary about SeaWorld’s treatment of killer whales. SeaWorld now sees full-year earnings at a range of $US360 million to $US370 million from $US370.1 million to $US381.2 million earlier guided.
  5. In economic data, initial jobless claims rose more than expected last week, to 276,000 (262k forecast). The four-week moving average also rose from a 42-year low to 262,750. The Labour Department said no special factors impacted initial jobless claims, which have now run under 300,000 for seven months.
  6. And, job cuts related to the oil industry jumped to a six-month high in October. Staffing firm Challenger, Grey & Christmas said nearly 14,000 of the 50,504 layoffs were related to the oil industry. Job-cut announcements are up 31% from a year ago to 543,935.

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