Chipotle Stock Downgraded on Latest E Coli Outbreak
Chipotle shares continued falling this week after the latest outbreak of E Coli hit the casual fast food chain. The stock has lost more than a third of its value since October 13, when its value peaked at $750.42 per share. The latest outbreak, which impacted five people in three states, prompted the shares to drop from $538.90 on Monday to below $500 Tuesday afternoon. A number of analysts have responded by downgrading the stock, even some who've considered a downgrade unnecessary after previous issues for Chipotle. When 150 people were infected with norovirus at a Boston Chipotle several weeks ago, JPMorgan analyst John Ivankoe called the outbreak a “phenomenally unlucky coincidence,” saying it would be rash to downgrade the stock at that time. The latest incident prompted Ivankoe to reconsider, and he dropped the stock from “overweight” to “ neutral”.
DuPont, Dow Chemical Stocks Surge as Merger Rumors Spread
Rumors began swirling Wednesday that Dow Chemical Co. and DuPont have begun discussing a merger that would create a $130 billion titan in the chemical industry, prompting both stocks to surge. Shares of Dow Chemical spiked 11.7 percent to a record high of $56.82 at one point during the trading day, while DuPont jumped as much as 13.7 percent at one point and was very much on pace to see its biggest one-day gain ever. The merger talks were first reported Tuesday by the Wall Street Journal, who also said the combined company would then be split into three. The new companies would diversify the new company's agricultural, chemical and materials businesses. Neither company has been willing to speak publicly on the merger rumors, but multiple sources were reporting it by Wednesday afternoon.
AT&T Bumped from Dow in Favor of Apple
Apple was accepted into an elite club on Friday when it was announced the tech giant will replace AT&T on the Dow Jones industrial average. The change is scheduled to take place on March 19th, and is not expected to affect the overall value of the 30-stock index. S&P Dow Jones Indices, which manages the Dow, said the move is in response to a planned stock split by VISA. The scheduled four-to-one split will reduce VISA's stock price by 75 percent, thus reducing the weight of the information technology sector on the index. Bringing in Apple, the index manager said, will help offset the loss of value caused by VISA's stock split.
Twitter Stock Soars Nearly 75 Percent in IPO
Microblogging giant Twitter went public late Wednesday, pricing its shares at $26 apiece. The initial public offering raised about $2 billion for the company, giving it a public valuation of $18.34 billion. But that was Wednesday. When trading opened on the New York Stock Exchange Thursday morning, the shares had already up more than 75 percent at $45.10 per share. The stock, which trades under the ticker symbol TWTR, rose above the $50-per-share mark during Thursday's session, though it trailed off later in the session to finish at $45.41 per share. That represents a 74.65 percent first-day gain and gives the company a market cap of $24.46 billion.
Longtime Dow Jones industrial average components Bank of America, Hewlett-Packard and Alcoa will lose their status as blue-chip issues later this month as the iconic index welcomes three new members to its exclusive 30-member club. The three outgoing stocks, Dow officials explained, have suffered massive declines over the last few years, and their stock prices have simply dropped too far to continue to include them on the index. The Dow Jones family will welcome, meanwhile, Goldman Sachs, Nike and Visa into the fold on September 23rd when the changes take place.
Shares of Apple surged nearly 5 percent in morning trading Wednesday as investors welcomed the company's fiscal third-quarter results issued after Tuesday's closing bell. The world's largest tech firm reported higher-than-expected sales of its popular iPhone for the three months through June, including a 51 percent jump in shipments in the US alone. The report did contain some disappointing metrics, however, as the company's profit slipped 22 percent from the year-earlier period and gross margins fell from 42 percent a year ago to 37 percent.