US Stocks Ended Oct. 21, 2016
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Equity markets traded up slightly last week amid a flurry of corporate earnings announcements, economic news and significant mergers and acquisitions stories. The S&P 500 traded down to start the week as investors had a mild risk-off appetite ahead of significant earnings releases. Netflix Inc. shares jumped over 19% after they announced their quarterly results. The main reason driving the rally was 1.45m new domestic subscribers, significantly beating the 1.0m analysts had estimated for the quarter. They also stated that their content spend would be increasing for a 'long time'. General Electric Co. reported earnings and revenue roughly in line with market expectations. However, they stated that the continued low level of global growth along with poor continuing results from their oil division could continue to mute operating results for the company. There were several company combinations that were reported as well. This weekend brought us official news that AT&T Inc. agreed to acquire Time Warner Inc. Though this combination faces significant antitrust headwinds, if this move gets approved it would be valued around $107b and expected to close in the 4th quarter of 2017. The mega merger would combine AT&T's Baby Bell's (Ameritech, BellSouth, Pacific Telesis, and Southwestern Bell), along with AT&T Wireless and DirectTV, with Time Warner's, Turner Broadcasting (TBS, TNT, CNN and other TV channels), HBO and Warner Brothers. The combined company would likely have a market cap around $300b and be one of the larges five publicly traded companies. British American Tobacco PLC agreed to acquire Reynolds American Inc. for cash and shares. The deal is be valued at $58b and would create the world's largest tobacco company if regulators allow the transaction to go through. Looking ahead to next week, earnings season will continue with Visa Inc., 3M Co., Apple Inc., Amazon.com Inc., Google Inc., Merck & Co Inc. and Procter & Gamble Co. among those expected to report quarterly results.
Posted on Monday, October 24, 2016 @ 8:08 AM

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