Updated 10:07 a.m. ET, Thursday, June 29.
Strong gains in the financials sector weren't enough to buoy all of Wall Street on Thursday, June 29, as another tech selloff weighed on the Nasdaq.
The S&P 500 slipped 0.27%, the Dow Jones Industrial Average fell 0.14%, and the Nasdaq declined 0.8%.
Financials were the best performers on Wall Street after the dividend and stock-buyback plans of all 34 of the country's biggest banks won approval from the Federal Reserve, but it was a close call for some.
Capital One Financial Corp. (COF) - Get Capital One Financial Corporation Report was asked to resubmit its proposal to address "weaknesses" in its planning process. A number of other big banks came close to failing a new test that considers its balance-sheet assets as well as its off-balance sheet exposures, including Goldman Sachs Group Inc. (GS) - Get Goldman Sachs Group, Inc. (GS) Report , Morgan Stanley (MS) - Get Morgan Stanley (MS) Report , State Street Corp. (STT) - Get State Street Corporation Report and JPMorgan Chase & Co. (JPM) - Get JPMorgan Chase & Co. (JPM) Report .
The "stress tests" of the 34 large financial institutions, known as the Comprehensive Capital Analysis and Review, were set up in the aftermath of the 2008 financial crisis, when a number of financial institutions increased payouts despite rising defaults in the $15 trillion U.S. mortgage market and dour assessments from analysts.
Tech stocks took another dive on Thursday, another downswing in a series of selloffs that has plagued the sector in recent weeks. Tech names, particularly the FAANG stocks (Facebook Inc. (FB) - Get Facebook, Inc. Class A Report , Amazon.com Inc. (AMZN) - Get Amazon.com, Inc. Report , Apple Inc. (AAPL) - Get Apple Inc. (AAPL) Report , Netflix Inc. (NFLX) - Get Netflix, Inc. (NFLX) Report , and Alphabet Inc. (GOOGL) - Get Alphabet Inc. Class A Report ), have been under pressure after a steep run-up in the year to date. The FAANG stocks had contributed a hefty portion to the S&P 500's gains in the year to date.
Walgreens Boots Alliance Inc. (WBA) - Get Walgreens Boots Alliance Inc Report and Rite Aid Corp. (RAD) - Get Rite Aid Corporation Report called off a merger agreement but struck a new deal. As part of the new deal, Walgreens will pay $5.175 billion to Rite Aid in cash and receive 2,186 stores in return. Walgreens will also pay Rite Aid a $325 million termination fee for the cancelation of the deal.
Walgreens will be an even bigger drug-selling beast, with more than 15,000 stores spanning 11 countries. Walgreens expects synergies of $400 million from the deal and for the new stores to increase its adjusted earnings within the first year of the deal's closing. As for Rite Aid, it will be left with about 2,300 stores once the deal closes in six months.
The original merger agreement struck in 2015 was called off. The deal had been under intense scrutiny from antitrust regulators and doubts swirled that the agreement would gain approval. The original deal was first announced in October 2015 with amended conditions in Janunary 2017.
Fred's Inc. undefined stock crashed more than 26% as it will be shut out of buying 865 stores the combined company planned to divest.
This new deal could hurt one of Walgreens' biggest rivals CVS Health Corp. (CVS) - Get CVS Health Corporation Report , said Brian Sozzi over at our premium site for investors, Real Money. Get his insights with a free trial subscription.
Separately, Walgreens topped earnings and sales estimates over its fiscal second quarter. The pharmaceutical chain earned an adjusted $1.33 a share, 3 cents higher than consensus. Sales of $30.1 billion exceeded estimates of $29.7 billion. The company now anticipates full-year earnings guidance of $4.98 to $5.08 a share, increasing the lower-end of guidance from $4.90.
The U.S. economy grew at a slightly faster pace than previously estimated over the first three months of the year, according to the final print of first-quarter GDP. First-quarter GDP was increased to 1.4% growth from the original estimate of 1.2%. Consumer spending was bumped up to 1.1% from 0.6%, largely driven by increases in healthcare spending. Export growth was increased to 7% from 5.8%.
Wekkly jobless claims rose in the past week, though remained near multi-year lows. The number of new claims for unemployment benefits increased by 2,000 to 244,000. The less-volatile, four-week average fell by 2,750 to 242,250.
Crude oil prices extended gains achieved on Wednesday, June 28. West Texas Intermediate had surged 1.1% a day earlier even after an increase in domestic stockpiles. The Energy Information Administration reported a 100,000-barrel build in crude oil inventories over the past week, while gasoline and distillate stockpiles fell.
Crude has been under pressure lately on worries over global oversupply and stubbornly high production. Crude reached its lowest level in 10 months on Wednesday, June 21.
West Texas Intermediate crude was up 1.5% to $45.42 a barrel on Thursday.
Blue Apron Holdings Inc. (APRN) - Get Blue Apron Holdings, Inc. Class A Report opened for trading in its market debut on the New York Stock Exchange on Thursday. The groceries delivery service opened at $10 a share, its issue price. The company lowered its listing price to $10 to $11 on Wednesday from a previous range of $15 to $17.
Conagra Brands Inc. (CAG) - Get Conagra Brands, Inc. Report fell 1.9% even after reporting higher quarterly profit than a year earlier. Earnings of 36 cents a share came in higher than 27 cents a year earlier. Adjusted profit of 37 cents came in as expected. Revenue declined by 9.3% to $1.86 billion, but met consensus. Fiscal 2018 adjusted profit guidance of $1.84 to $1.89 a share was in line with estimates.
Constellation Brands Inc. (STZ) - Get Constellation Brands, Inc. Class A Report climbed 6.4% after a better-than-expected quarter. Net income of $2 a share was 45 cents higher than a year earlier. Adjusted earnings of $2.34 a share came in far higher than $1.98 consensus. Sales of $1.94 billion fell shy of estimates. Beer sales improved 8%, while wine and spirits sales decreased 4%.
Other earnings of note include HB Fuller Co. (FUL) - Get H.B. Fuller Company Report , Pier Imports Inc. (PIR) - Get Pier 1 Imports, Inc. Report , Worthington Industries Inc. (WOR) - Get Worthington Industries, Inc. Report , McCormick & Co. Inc. (MKC) - Get McCormick & Company, Incorporated (MKC) Report , Lindsay Corp. (LNN) - Get Lindsay Corporation Report , Acuity Brands Inc. (AYI) - Get Acuity Brands, Inc. Report and Greenbrier Cos. (GBX) - Get Greenbrier Companies, Inc. Report .
Office supply company Staples Inc. (SPLS) agreed to be acquired by private-equity firm Sycamore Partners for $10.25 a share, or $6.9 billion. The sale comes a year after a federal judge, citing antitrust concerns, blocked Staples' proposed $6.3 billion merger with rival Office Depot Inc. (ODP) - Get ODP CORPORATION Report . The deal is expected to close by the end of the year.
It's the final week of the second quarter and benchmark indexes are expected to post solid gains. Strong fundamentals and a positive earnings season have given markets a boost over the past three months even as volatility held at multi-year lows.
The Dow is on track to end nearly 4% higher for the quarter, adding to the 4.5% growth seen in the first quarter. Likewise, the S&P 500 is on track to end with gains of roughly 3%, slowing from the 5.5% increase seen in the first three months of the year.
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