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Wall Street Jumps with Energy, Materials

The Gilmer Free Press

U.S. stocks climbed on Monday, giving the S&P 500 its biggest gain since May as indexes bounced back sharply from last week’s losses, buoyed by gains in commodity-related shares and optimism over Warren Buffett’s latest deal.

Copper rebounded from six-year lows while oil prices also rallied, helping push the S&P 500 energy index .SPNY up 3.1 percent and the materials index .SPLRCM up 2.5 percent.

Disappointing economic data in China boosted hopes for additional stimulus from Beijing, lifting Chinese stocks. Adding to investor optimism, Greece and international creditors could wrap up a multibillion-euro bailout accord by Tuesday.

Buffett’s Berkshire Hathaway (BRKa.N) (BRKb.N) said it would buy Precision Castparts (PCP.N) in a deal valuing the company at $32.3 billion. Precision Castparts’ shares jumped as much as 19.1 percent to $230.92, while Berkshire Class B shares dipped 0.1 percent to $143.42.

The Dow Jones industrial average .DJI rose 241.79 points, or 1.39 percent, to 17,615.17, the S&P 500 .SPX gained 26.61 points, or 1.28 percent, to 2,104.18 and the Nasdaq Composite .IXIC added 58.25 points, or 1.16 percent, to 5,101.80.

The S&P 500 registered its biggest daily percentage gain since May 08.

On Friday, the Dow closed down for the seventh straight day after solid July jobs data pried the door open a little wider for a rate hike in September.

With U.S. interest rates near zero for nearly a decade, debt has been cheap. But with the Federal Reserve widely expected to hike rates later this year, merger and acquisition activity has increased.

July was the seventh-strongest month for global deal activity since 1980. Through July, cross-border M&A activity totaled $913.5 billion, up 23 percent from a year earlier, according to Thomson Reuters data.

In other deal news, ammonia maker CVR Partners’ (UAN.N) deal to buy Rentech Nitrogen Partners (RNF.N) for about $533 million sent Rentech soaring 28.6 percent to $13.25. CVR shares were down 2.9 percent at $10.38.

Twitter (TWTR.N) shares jumped 9.1 percent to $29.50 after CEO Jack Dorsey joined other insiders in buying more shares, while the company also clinched a multiyear partnership with the National Football League.

Advancing issues outnumbered declining ones on the NYSE by 2,329 to 734, for a 3.17-to-1 ratio on the upside. On the Nasdaq, 1,937 issues rose and 856 fell for a 2.26-to-1 ratio favoring advancers.

The benchmark S&P 500 index posted 35 new 52-week highs and three new lows; the Nasdaq Composite recorded 58 new highs and 85 new lows.

Wall Street Drops as Jobs Report Augurs for September Rate Hike

The Gilmer Free Press

U.S. stocks ended lower on Friday after solid job growth data for July pried the door open a little wider for a potential interest rate hike by the Federal Reserve in September.

Wall Street took the latest signs of an improving economy as a fresh reason to sell shares in a market that has remained range-bound for much of 2015 in anticipation of the Fed’s first rate hike in nearly 10 years.

U.S. non-farm payrolls increased 215,000 last month, less than the 223,000 forecast by economists, but the unemployment rate held at a seven-year low of 5.3 percent.

U.S. overnight indexed swap rates rose after the jobs data, suggesting traders were pricing a 52 percent chance that rates would be raised in September rather than December, up from 47 percent prior to the data, according to John Briggs, head of cross-asset strategy at RBS Securities Inc in Stamford, Connecticut.

The Dow Jones industrial average .DJI fell 0.27 percent to end at 17,373.38. The S&P 500 .SPX lost 0.29 percent to 2,077.57 and the Nasdaq Composite .IXIC finished 0.26 percent lower at 5,043.54.

For the week, the Dow lost 1.8 percent, the Nasdaq dipped 1.7 percent and the S&P edged down 1.2 percent. After hitting a record high in May, the S&P 500 is now up less than 1 percent for the year.

On Friday, seven of the 10 major S&P sectors were lower, with the energy index’s .SPNY 1.86 percent fall leading the decliners as oil prices LCOc1 CLc1 headed for a sixth week of losses.

Exxon Mobil’s (XOM.N) 1.61 percent drop weighed the most on the S&P 500.

With second-quarter earnings season almost over, S&P 500 companies’ aggregate profits are estimated to have increased 1.6 percent, while revenues are projected to have fallen 3.4 percent.

With many U.S. companies boosting their earnings per share by cutting costs and buying back stock instead of by growing their businesses, stock valuations remain a concern. The S&P 500 trades at 16.6 times expected earnings, which is pricier than the 10-year median of 14.7.

Cablevision Systems’ (CVC.N) shares fell 2.68 percent after the company managed to stem video subscriber losses, but at the cost of margins.

Nvidia’s (NVDA.O) shares surged 12.37 percent a day after the chipmaker reported a surprise rise in quarterly revenue, helped by strong demand for its graphic chips for high-end video game computers.

Decliners outnumbered advancers on the NYSE by 1,800 to 1,262. On the Nasdaq, 1,701 issues fell and 1,088 advanced.

The S&P 500 index chalked up four new 52-week highs and 20 new lows; the Nasdaq Composite saw 27 new highs and 161 new lows.

About 6.7 billion shares changed hands on all U.S. exchanges, under an average 7.0 billion in the past five sessions.

Wall Street Bruised by Media Stock Selloff

The Gilmer Free Press

Wall Street ended sharply lower on Thursday as weak earnings reports from media companies stirred fears that more viewers are ditching cable TV, dragging the sector to its worst two-day loss since the financial crisis.

The selloff was compounded by nervousness ahead of key jobs data on Friday that could provide clues about the timing of the first Federal Reserve interest rate hike in almost a decade.

Viacom (VIAB.O) fell 14.22 percent to its lowest in almost four years after reporting lower-than-expected quarterly revenue due to weakness in its cable TV business. Walt Disney (DIS.N) was off 1.79 percent and down for a second session after it lowered profit guidance for its cable networks unit on Tuesday.

The S&P 500 media index .SPLRCMDIA lost 2.12 percent and notched its biggest two-day fall since November 2008, with Time Warner (TWX.N), Comcast (CMCSA.O) and CBS (CBS.N) all in the red and Twenty-First Century Fox (FOXA.O) down 6.4 percent.

Viacom’s results and Disney’s warning put the spotlight on a trend of viewers shifting from cable TV to Internet-based services such as Netflix (NFLX.O), which rose 2.21 percent.

The Dow Jones industrial average .DJI fell 0.69 percent to end at 17,419.75 and the S&P 500 .SPX lost 0.78 percent to 2,083.56. The Nasdaq Composite .IXIC dropped 1.62 percent to 5,056.44, its biggest one-day tumble since early July.

Eight of the 10 major S&P sectors were lower, with the health index’s .SPXHC 2.09 percent fall leading the decliners. Allergan (AGN.N) fell 5.1 percent after the Irish drugmaker reported a second-quarter loss.

In other earnings-driven stock moves, Tesla (TSLA.O) fell 8.88 percent and Keurig Green Mountain (GMCR.O) slumped as much as 29.75 percent after reporting disappointing numbers.

Investors were also jittery ahead of the release of U.S. non-farm payroll numbers, which are expected to have risen by 223,000 in July, matching gains in June.

The Fed has said it will raise rates only when it sees a sustained recovery in the economy.

After the bell, Zynga (ZNGA.O) fell 6 percent after it posted a disappointing quarterly report.

With about three-quarters of the S&P 500 companies having reported, second-quarter earnings are estimated to have increased 1.6 percent while revenues are projected to have fallen 3.4 percent.

However, valuations look stretched. The S&P 500 is trading at a 25 percent premium to its historical median price-to-sales ratio, Jack Ablin, chief investment officer at BMO Private Bank said in a note to clients.

In Thursday’s session, declining issues outnumbered advancing ones on the NYSE by a rate of 1.47 to 1. On the Nasdaq, that rate was 2.46 to 1 favoring decliners.

The S&P 500 index posted 18 new 52-week highs and 44 new lows; the Nasdaq Composite saw 64 new highs and 169 new lows.

About 7.8 billion shares changed hands on all U.S. exchanges, well above an average 6.77 billion in the past five sessions.

McDonald’s New Menu Item: ‘Lettuce’ Burger

The Gilmer Free Press

McDonald’s has become the latest fast-food chain to offer a bunless burger and the bread replacement is something a lot healthier than the fried chicken in KFC’s Double Down: lettuce.

The “lettuce burgers” have been introduced as part of the chain’s “Create Your Taste” burger-building option—you can create your own here—which has now been rolled out widely in Australia, and has led to some inspired creations using the 31 ingredients available, CNN reports.

Customers can order their creations using touch-screen kiosks, picking their own toppings, fillings, and bun.

The burger-building option is also available in some U.S. restaurants, and the chain plans a wider American roll-out this year, according to Business Insider.

Robert Sietsema at Eater tried out the “Create Your Taste” menu at a New York City McDonald’s yesterday and found that while lettuce wraps were an option—as well as your choice of “guacamole, chili lime tortilla strips, crinkle cut pickle, crisp red onions, crisp green lettuce, fresh sliced tomato, jalapeno sliced, grilled onions, grilled mushroom”—there was no way to build a completely vegetarian lettuce burger.

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