Weak earnings play havoc with indexes
U.S. stocks fell Tuesday after weak first-quarter reports from Johnson & Johnson and Goldman Sachs frustrated investors who hope that company earnings are on the rise. Health care companies lost the most. Wall Street has high hopes for company earnings this spring, and weak results from the world’s largest health care products company and one of the biggest financial firms had them concerned. Johnson & Johnson took its biggest one-day loss in a year. The Standard & Poor’s 500 index shed 6.82 points, or 0.3 percent, to 2,342.19. The Dow Jones industrial average lost 113.64 points, or 0.6 percent, to 20,523.28. Goldman Sachs was responsible for most of that loss. The Nasdaq composite fell 7.32 points, or 0.1 percent, to 5,849.47. The Russell 2000 index of small-company stocks recovered from an early loss and rose 0.71 points, close to 0.1 percent, to 1,361.89.
Verizon chief says he is open to a merger
Verizon Communications is considering merger possibilities to reset the course of the company given the fast-changing structure of the industry, and would be open to talks with Comcast, Walt Disney or CBS, said Chief Executive Lowell McAdam. Verizon, the largest U.S. wireless carrier, is seeking new sources of growth as the mobile-phone business matures and its new media ventures take time to gain traction. Comcast’s assets in particular would help Verizon build a fiber-optic network to handle a deluge of video streaming and ultrafast 5G technology. Verizon would entertain a deal with Comcast CEO Brian Roberts to roll out that network faster, McAdam said. Among cable operators, Comcast has the best fiber assets, in addition to a compelling media business with NBCUniversal. Still, McAdam said he would take that same call from Disney’s Bob Iger or CBS’ Les Moonves.
United CEO says no firings over PR disaster
United Airlines will not fire employees involved in the recent dragging of a passenger from his seat, an incident CEO Oscar Munoz on Tuesday called “a system failure.” Executives of the Chicago-based airline sought to assure investors that United is working to learn from the recent uproar over viral videos of Chicago Aviation Department security officers dragging Dr. David Dao from a Louisville, Ky.-bound flight. Dao was removed from the plane at Chicago’s O’Hare International Airport after he refused to give up his seat to make room for airline employees.
PetSmart to buy Chewy.com for $3.35B
PetSmart, the nation’s largest pet-supplies retailer, has agreed to acquire Chewy.com, the market’s No. 1 online retailer. The combination of Phoenix-based PetSmart, with 1,500 stores nationwide, and Chewy, based outside Miami, will enhance both companies’ reach, the companies said Tuesday. The acquisition, which is subject to customary regulatory approvals, is expected to close by the end of PetSmart’s second fiscal quarter. Terms of the transaction were not disclosed. However, tech media site Recode reported that the deal in place is valued at $3.35 billion. That would make the sale of Chewy the biggest e-commerce acquisition in history, even larger than Wal-Mart’s $3.3 billion deal for jet.com last year.