The Dow Jones Industrial Averaged and the S&P 500 crossed major milestones this past week as the Federal Reserve chief sounded a dovish view and President Trump backed off a plan to curb drug rebates.
Among individual movers this past week, Boeing BA 1.76% stands to lose its place as the No. 1 plane maker to rival Airbus as its 737 MAX woes go on; Deutsche Bank DB 2.54% ’s restructuring plan wasn’t well-received; and Twitter TWTR 1.69% announced a tougher policy on hate speech.
A rally in health-care stocks helped lift the Dow to a record Thursday after the Trump administration abandoned a plan to curb drug rebates. The reversal relieved concerns from pharmacy-benefit managers that stood to lose rebates from drugmakers. UnitedHealth led the Dow higher, with shares gaining 5.5% Thursday, while Cigna Corp. jumped 9.2% and CVS Health Corp. added 4.7%.
Deutsche Bank AG
The German lender unveiled a broad restructuring plan in an attempt to save itself after years of decline. Deutsche Bank said the overhaul—which involves cutting 18,000 jobs by 2022, significantly shrinking its investment bank and reducing costs by one-quarter—would lead to a net loss of around $3 billion for the second quarter. Analysts expressed concern surrounding the bank’s expectation to make a profit in 2020, and President Trump called his longtime lender a “now badly written about and maligned” bank. Deutsche Bank shares fell 5.4% Monday.
Boeing is poised to lose its place as the No. 1 plane maker to rival Airbus as deliveries fell by more than a third in the first half with the grounding of its 737 MAX aircraft after two fatal crashes. The latest blow: A Saudi discount airline called flyadeal said Sunday that it would purchase up to 50 Airbus jets instead of the Boeing jets it had committed to buy in December. Shares of Boeing lost 1.3% Monday after the flyadeal deal, valued at more than $5.5 billion, fell through. Separately, Boeing said late Thursday that the head of its 737 MAX production facility will retire after less than a year.
Cisco Systems agreed Tuesday to buy the networking company for $70 a share, a roughly 46% premium to Acacia’s closing price of $48.06 on Monday. The deal, subject to regulatory reviews in the U.S. and China, will boost Cisco’s optical-networking portfolio and will allow its hardware users to drive more data over high-speed internet networks amid rising performance demands with the rollout of 5G wireless. The $2.6 billion deal—Cisco’s latest to bring a major supplier in-house—is the company’s largest purchase since 2017. Acacia shares surged 35% Tuesday, while Cisco shares edged up 0.3%.
Twitter said Tuesday that it updated its policy on hateful conduct to better protect religious groups, the social-media company’s latest bid to patrol speech and prevent abuse. Under the modified policy, any new or old tweets that contain language that “dehumanizes on the basis of religion” will be removed when reported by users or found by the company. Separately, a federal appeals court in New York ruled Tuesday that President Trump’s practice of blocking some users on Twitter violates the free-speech protections of the First Amendment. Twitter shares rose 3.3% Tuesday.
First Jim and Pam, now Ross and Rachel. After losing “The Office,” Netflix will also lose “Friends” after AT&T ’s WarnerMedia said its new direct-to-consumer service will be the exclusive streaming home of reruns of the sitcom. WarnerMedia said its new service, HBO Max, will launch in the spring after a test run later this year. The loss is another blow to Netflix as competition heats up for streaming content; Disney has also indicated it would take back shows it has sold to Netflix when those deals expire. Netflix shares slipped 1.9% for the week.
The Budweiser maker called off the nearly $10 billion listing of its Asian business, abandoning what would have been the year’s largest initial public offering. AB InBev’s American depositary receipts shed 3% Friday after the news was announced. The Hong Kong IPO of the unit aimed to raise between $8.3 billion and $9.8 billion, and The Wall Street Journal reported that the unit had guided investors to expect it would price in the lower half of a previously indicated range. AB InBev said it would “closely monitor market conditions” while it weighs options.
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