Here Are 3 Hot Things to Know About Stocks Right Now

  • Stocks fell on Monday following last week's sharp losses. The Dow Jones Industrial Average fell 4.2% last week, the S&P declined 4.1% and the Nasdaq tumbled 3.7%. It was the worst weekly performances for the indexes since March.
  • Sears Holdings Corp. (SHLD) filed for Chapter 11 bankruptcy protection. Sears' controlling shareholder, Edward Lampert, stepped down as CEO but will remain chairman.
  • Bank of America Corp.'s  (BAC)  third-quarter earnings of 66 cents a share topped estimates by 4 cents.

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Wall Street Overview

Stocks mainly fell on Monday, Oct. 15, amid escalating tensions between the U.S. and Saudi Arabia over the death of a prominent Saudi journalist in Turkey last month as well as renewed concerns for trade disputes between the U.S. and its major economic partners.

Jamal Khashoggi's disappearance last week, following a visit to the Saudi consulate in Istanbul on Sept. 28, has sparked both an international murder investigation and a sharp response from the White House, with Donald Trump threatening "severe" consequences if the Saudi government was to be found responsible. Khashoggi is a columnist for the Washington Post.

The tensions slammed shares in Riyadh on Monday. The turmoil also sent crude oil prices higher. West Texas Intermediate crude oil for November delivery rose 0.4% to $71.63 a barrel on Monday.

The Dow Jones Industrial Average fell 89 points, or 0.4%, to 25,250.55, the S&P 500 fell 0.6%, and the Nasdaq was down 0.9% as shares of Apple Inc. (AAPL) fell 2.1%.

Stocks in Asia fell sharply Monday after also being rattled by the tensions as well as comments from U.S. Treasury Secretary Steven Mnuchin, who told the International Monetary Fund's annual meeting in Bali that his department would like to use language to prevent current manipulation into any new U.S. trade deals.

In U.S. economic data, retail sales in the U.S. in September rose 0.1% for the second consecutive month. Economists expected retail sales to rise 0.6%.

Sears Holdings Corp. (SHLD)  filed for Chapter 11 bankruptcy protection on Monday.

The filing for the Hoffman Estates, Ill.-based department store owner comes ahead of a looming debt repayment due later Monday and just after the chain added restructuring expert Alan J. Carr to its board. It reportedly had started missing payments to vendors, sparking concerns about its future.

The stock was down 23.1% on Monday to 31 cents. Sears started 2018 above $3.50 and was above $6.20 in October 2017.

Sears said it will close 142 unprofitable stores near the end of the year, which are in addition to the previously announced closings of 46 unprofitable stores that are expected to be completed by November. It also said it reached a deal with its lenders that will allow hundreds of its stores to remain open for now.

The retailer said its controlling shareholder, Edward Lampert, has stepped down as CEO, but will remain chairman. The company said it created an Office of the CEO that will run day-to-day operations during the bankruptcy process.

Bank of America Corp. ( BAC)  earned 66 cents a share in the third quarter, 4 cents above analysts' estimates. Net income rose 32% from a year earlier to $7.2 billion. The bank said profit jumped as the Trump administration's tax cuts boosted its bottom line, while the economic stimulus from the legislation helped to boost loan and deposit growth.
 
The stock fell about 1.9%.

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Defense companies Harris Corp. (HRS) and L3 Technologies Inc. (LLL) agreed to merge, creating the sixth-largest defense contractor in the U.S. with a market value of about $34 billion.

The all-stock deal values L3 at $15.7 billion, slightly above its market capitalization on Friday of $15.3 billion. Harris has a market capitalization of $18.2 billion. Under the deal, Harris shareholders will own about 54% of the combined company -- L3 Harris Technologies Inc. -- with L3 shareholders owning the rest.

The deal comes amid increased military spending from the Trump administration.

Harris shares rose about 12%, and L3 shares jumped 13% on Monday.

Carl Icahn said he opposes a buyback of stock that tracks Dell Technologies' VMware Inc. (VMW) subsidiary and said his investment vehicle has built an 8.3% stake in the group controlled by founder and CEO Michael Dell. 

In an open letter to shareholders, Icahn said VMware's business should grow and become more profitable over the medium term, while Dell Technologies Inc.'s (DVMT) "very cyclical business" would stagnate or decline. Given that, he said, investors should consider a separate, partial bid to rival Dell's approach in order to provide VMware with liquidity but without forcing a merger with Dell.

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