Stocks Down but Off Session Lows After Weak Trade Data From China

 thestreet.com  1/14/2019 9:10:49 PM  2  Joseph Woelfel

Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average was falling on Monday, coming off a strong week for U.S. equities. The Dow last week rose 2.4%, the S&P 500 gained 2.5%, and the Nasdaq finished 3.5% higher.  
  • Citigroup Inc (C)  rose 3.9% after the bank posted fourth-quarter adjusted profit that beat analysts' estimates but revenue missed.
  • Newmont Mining Corp. (NEM) reached an agreement to acquire Goldcorp Inc. (GG) for stock valued at $10 billion. Goldcorp shares jumped 8.3% on Monday.

Wall Street Overview

Stocks fell on Monday, Jan. 14, as surprisingly weak trade data from China added yet another level of concern over the health of the world's second-largest economy and added more pressure on the slow-moving trade talks between Washington and Beijing.

China's export engine, the world's biggest, suffered its largest monthly drop in two years in December, with exports falling 4.4% and imports contracting a much larger-than-expected 7.6%.

However, China's trade surplus with the United States jumped 17% to a record $323.32 billion last year, a figure that is certain to add an extra dimension of tension into the ongoing trade talks, given that Donald Trump had vowed to reduce that figure during his election campaign, only to see it print consecutive all time highs when he has been in office.

Some of the world's biggest companies, including Apple Inc. (AAPL) and Samsung Electronics Co. (SSNLF) , have directly or indirectly cited slowing growth in China as the main catalyst for reduced earnings forecasts or weaker-than-expected current quarter earnings.

The Dow Jones Industrial Average tumbled 92 points, or 0.39%, to 23,903 - at its session low the blue-chip index declined 230 points. The S&P 500 fell 0.5%, and the Nasdaq was down 0.72%.

Citigroup Inc. (C) , the third-biggest U.S. bank, was up 3.9% after it posted fourth-quarter profit that beat analysts' estimates, with CEO Michael Corbat cutting costs as revenue slid.

Net income was $4.3 billion. Earnings per share were $1.64, while adjusted profit of $1.61 beat the average analyst estimate of $1.55 in a FactSet survey.

"A volatile fourth quarter impacted some of our market-sensitive businesses, particularly fixed income," Corbat said in the statement. The company "carefully managed both our expenses and balance sheet."

Earnings from JPMorgan Chase & Co. ( JPM) and Wells Fargo & Co. ( WFC) are expected before the market opens on Tuesday.

Citigroup and JPMorgan are holdings in Jim Cramer's Action Alerts portfolio. Want to be alerted before Jim Cramer buys or sells C or JPM? Learn more now.

Newmont Mining Corp. (NEM) reached an agreement to acquire Goldcorp Inc. (GG) for stock valued at $10 billion.

Newmont will acquire each Goldcorp share for 0.328 of a Newmont share, which represents a 17% premium based on the companies' 20-day volume weighted average share prices. With the inclusion of debt, the enterprise value of the deal is about $12.5 billion, with Newmont holding around 65% of the combined entity.

"This combination will create the world's leading gold business with the best assets, people, prospects and value-creation opportunities," said Newmont CEO Gary Goldberg. "We have a proven strategy and disciplined implementation plan to realize the full value of the combination, including an exceptional pool of talented mining professionals, stable and profitable gold production of six to seven million ounces over a decades-long time horizon, the sector's largest gold Reserve and Resource base, and a leading project and exploration pipeline."

Goldcorp shares were rising 8.3% to $10.49. Newmont fell 7.7%.

PG&E Corp. (PCG) said Monday it plans to begin voluntary bankruptcy proceedings under Chapter 11 in the face of billions of dollars in potential liability for recent California wildfires.

In a statement, the California utility company said it intends to file petitions to reorganize under Chapter 11 on or about Jan. 29.

"PG&E expects that the Chapter 11 process will, among other things, support the orderly, fair and expeditious resolution of its potential liabilities resulting from the 2017 and 2018 Northern California wildfires, and will assure the company has access to the capital and resources it needs to continue to provide safe service to customers, the company said.

On Sunday, PG&E said its CEO Geisha Williams had stepped down, and reports said the utility company could be notifying its 20,000 employees as early as Monday that it was headed toward bankruptcy

Shares declined 49.1% to $8.96. 

Jim Cramer takes a look at PG&E, Citigroup's earnings and other headlines.

MNG Enterprises Inc., better known as Digital First Media, offered to buy Gannett Co. Inc. (GCI) for $12 a share in cash, a bid that would value the USA Today publisher at around $1.4 billion.

MNG, which publishes the Denver Post and the Boston Herald, said it owns a 7.5% stake in Gannett through its managed investment account, making it the company's biggest shareholder. The company argued in a letter to shareholders Monday that "a series of value-destroying decisions made by an unfocused leadership team," including an "ill-fated hostile for Tribune Publishing" have hit the company's bottom line.

"With Gannett's CEO departing by May and its key digital executive leaving later this month, there's now an even greater leadership void," the letter stated. "Frankly, the team leading Gannett has not demonstrated that it's capable of effectively running this enterprise as a public company."

Gannett shares rose 19.8% Monday to $11.68.

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