Stocks

JPMorgan Chase, Netflix, Gannett: Stocks That Defined The Week

(Saturday, July 20th, 2019) – Major stock indexes ended lower this past week as investors weighed signals of an interest-rate cut and mixed earnings results from some of America’s biggest companies.

Strong consumer businesses drove some banks’ quarterly profits higher; Netflix Inc. says its number of U.S. subscribers declined for the first time in nearly a decade; and Gannett Co. soared after The Wall Street Journal reported that the newspaper publisher is nearing a deal to combine with rival GateHouse Media.

JPMorgan Chase & Co.

U.S. consumers are taking advantage of low interest rates to borrow and spend, lifting results this week for a number of the nation’s biggest banks. Strong Main Street businesses drove quarterly profits higher at JPMorgan Chase & Co. and other banks with a large consumer presence. Morgan Stanley and Goldman Sachs Group Inc., which rely more heavily on Wall Street, reported lower quarterly profits compared to a year ago. Bank stocks ended the week lower after central-bank officials signaled they are likely to cut interest rates by a quarter-percentage point at their upcoming meeting.

Alphabet Inc.

Google’s ties to China attracted the attention of President Trump, who said in a tweet that his administration would examine national-security concerns raised by billionaire investor and Facebook Inc. board member Peter Thiel. In a Sunday speech, Mr. Thiel claimed that Alphabet Inc.’s Google is working with China’s government instead of the U.S. military. President Trump sent a tweet Tuesday saying the U.S. government would look into Mr. Thiel’s concerns, and hours later at a Senate hearing, Google confirmed for the first time that it had killed its controversial plans for a censored search engine in China dubbed “Dragonfly.” Alphabet shares lost 1.2% this week.

Amazon.com Inc.

The e-commerce company faces a new regulatory threat to its growing market power. The European Union said Wednesday it is investigating Amazon.com Inc.’s dealings with third-party merchants on its site, the latest development in the antitrust scrutiny of tech giants such as Facebook and Alphabet Inc.’s Google in the U.S. and abroad. The European Commission, the EU’s top antitrust enforcer, said it will look into whether Amazon is abusing its dual role as the provider of a marketplace for independent sellers and a retailer of products in its own right. The probe will also examine whether Amazon has an unfair advantage to be designated as the default option for products it sells. Amazon.com shares fell 2.3% this week.

Netflix Inc.

The number of people subscribing to Netflix in the U.S. has declined for the first time in nearly a decade, the company said in its most recent quarterly report late Wednesday. The company said it had 130,000 fewer domestic subscribers at the end of the second quarter compared to the end of the first quarter. The streaming giant will also soon face a range of new rival services from Walt Disney Co., Apple Inc., AT&T Inc.’s WarnerMedia and Comcast Corp.’s NBCUniversal. These competitors are also starting to pull their content from Netflix as NBC did to “The Office” and WarnerMedia did to “Friends.” Netflix shares fell 10% Thursday.

Charles Schwab Corp.

A push by Charles Schwab Corp. deeper into the field of financial advice boosted the money manager’s shares 3.3% Tuesday. The Journal reported late Monday that the company is in talks to buy brokerage and wealth-management operations from USAA for roughly $2 billion. The deal could bring Schwab roughly $100 billion of assets and may be reached this month, the Journal reported. Schwab’s move would be the latest in a string of recent deals by big wealth advisers and banks to buy smaller companies, such as Goldman Sachs’s agreement to buy boutique wealth manager United Capital Financial Partners Inc. for $750 million earlier this year.

PG&E Corp.

PG&E Corp. said Monday that it is working to repair nearly 10,000 problems it discovered throughout its electrical system as it steps up efforts to prevent its equipment from sparking more wildfires. A failure last year of a century-old transmission line sparked the deadliest fire in California history. The California utility company said that it is still working through more than 3,700 repairs, including damaged transmission towers, broken hardware on local distribution poles and leaking transformers in its substations. The company didn’t give details on the electric lines and substations that need work but said most of its high-priority repairs should be completed within about three months. PG&E shares ended 8.3% lower this week.

Gannett Co.

The USA Today publisher is nearing a deal to combine with rival GateHouse Media, the Journal reported. The union would join the country’s two largest newspaper groups by circulation as both grapple with a brutal environment for local media nationwide. The two companies are discussing a cash-and-stock deal in which GateHouse’s parent would likely buy Gannett and GateHouse Chairman and Chief Executive Mike Reed would assume the same roles at the enlarged entity, the Journal reported. The private-equity-backed GateHouse has a reputation for aggressively slashing expenses at titles it acquires. Gannett shares gain more than 19% Friday.