Here Are 3 Hot Things to Know About Stocks Right Now
- The Dow Jones Industrial Average
rose Friday but gave up most gains as bank stocks faltered.
- JPMorgan Chase & Co. (JPM ended lower, while Citigroup Inc. (C gained after the Federal Reserve didn't object to the banks' capital-distribution proposals.
- Nike Inc. (NKE jumped 11.4% after its earnings and sales topped analysts' forecasts.
Wall Street Overview
Stocks rose on Friday, June 29, but gave up much of their gains in late trading as bank stocks fell back. Financials had risen earlier after most of the 35 lenders supervised by the Federal Reserve passed the second phase of stress tests that will allow them to increase dividends and share buybacks.
The Dow Jones Industrial Average
For the month, the Dow ended down 1.48%, the S&P 500 down 0.59% and the Nasdaq down 0.58%.
Halfway through the calendar year, the Dow is off 1.8%, The S&P is up 1.67% and the Nasdaq up 8.79%.
Shares of Germany's Deutsche Bank AG (DB rose 2% on Friday even after receiving a fresh rebuke from the Federal Reserve over "critical deficiencies" in its financial planning, while Goldman Sachs Group Inc. (GS and Morgan Stanley (MS faced new restrictions in their planned dividends and stock buybacks.
The Fed said Thursday, June 28, it had identified "widespread and critical deficiencies" in the capital-planning practices of DB USA, Deutsche Bank's U.S. subsidiary. As a result, DB USA won't be able to pay out regular dividends to the German parent company at least until next year, a senior Federal Reserve official told reporters.
Goldman Sachs and Morgan Stanley, meanwhile, failed an annual "stress test" that required them to maintain adequate financial strength even following a severe recession and market downturn, according to the Fed. The two firms were barred from increasing their planned distributions to shareholders beyond the prior year's levels.
- Deutsche Bank Fails 'Stress Test' as Goldman, Morgan Stanley Face Curbs
- Deutsche Bank Shares Pop Despite Fed Stress Test Fail, But Concerns Remain
The Fed didn't object to more than 30 other capital-distribution proposals by big banks, including those of JPMorgan Chase & Co. (JPM , Bank of America Corp. (BAC , Citigroup Inc. (C and Wells Fargo & Co. (WFC .NKE rose 11.4% on Friday after the sneaker and sports apparel company posted fiscal fourth-quarter earnings and sales that topped analysts' forecasts.
Nike said a renewed focus on direct-to-consumer sales, fostered by a revamped online strategy and a partnership with Amazon.com Inc. (AMZN , helped boost North American sales more than 2.7% in the three months ended in May. That helped lift overall sales by 12.8% to $9.79 billion and translated into a bottom line of $1.14 billion, or 69 cents a share, which topped analysts' forecasts by 5 cents.
The Eugene, Ore.-based company said it now sees fiscal 2019 revenue growth in the "high single digit range" and forecast margin expansion of at least 50 basis points.
- Nike Shares Set for Record High Open After Big North American Turnaround
- Why Nike's Jordan Brand Isn't Flying as High These Days
Constellation Brands Inc. (STZ fell 5% after posting fiscal first-quarter adjusted earnings of $2.20 a share, below analysts' forecasts of $2.44. The wine and beer company said it expects fiscal 2019 earnings of $9.40 to $9.73 a share; analysts expect $9.73.
KB Home (KBH rose 7.2% after the homebuilder posted second-quarter earnings and sales that beat Wall Street forecasts. KB Home also delivered 2,717 units in the quarter, higher than forecasts of 2,588.
Novartis AG (NVS said Friday it would spin off its eyecare unit, Alcon, after putting it up for review in 2017. American depositary receipts of Novartis rose 3.5%.