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Daily Scan: Stocks fall after Wal-Mart scare; IPOs beware
Updated throughout the day
Good evening everyone. Economic data in the U.S. Wednesday did little to dispel the fear of deflation: producer prices in September fell 0.5%, the biggest drop in eight months, and retail sales were weak. The Fed’s survey of its districts, the beige book, revealed modest expansion but no wage pressures anywhere. Meanwhile, Wal-Mart shocked investors with a dismal outlook and nosedived, pulling down the Dow Jones Industrials 0.92% to 16,925, marking the first back-to-back drop this month. The S&P 500 trimmed 0.48% to 1,994. And the U.S. 10-year note did just what you would expect in the face of this dismal economic news: yields fell below 2%, hitting a 5-month low at 1.97%. What was the Fed was saying about a rate hike?
Here's what else you need to know:
IPOS beware. Albertson’s scotched its $2 billion IPO scheduled for Wednesday but First Data soldiered on with its offering, lowering the price to $16/share, from the $18-$20 originally anticipated. The weather is getting rougher and rougher for IPOs. KKR must have been very anxious to price First Data, the largest processor of e-commerce transactions. Street Insider
Square braves the treacherous IPO market. The payment startup, led by Jack Dorsey – CEO at both Square and Twitter -- doesn’t appear to have a weather vane. The company is going where many tech companies have turned away from. Wall Street Journal (paywall)
Wal-Mart slammed after earnings outlook. Wal-Mart shocked investors by predicting a huge drop in earnings next year, with per-share profits to fall between 6% and 12% in 2017. Shares for the company plummeted 10% in response, a 3-year low and the worst drop for the company since 1988. The stock is now down almost 30% this year. Wal-Mart says profits are being sucked by the increase in employee wages. CNN
Volkswagen loses designated North American chief. Winfried Vahland was named to run the North America business three weeks ago after working for the car manufacturer for 25 years. Vahland is leaving the company due to differences about the organization in North America, not the current diesel engine scandal, he says. Wall Street Journal
First Jamaican writer wins Man Booker prize. Marlon James was awarded the prestigious writing award for his fictional account of the attempted murder of Bob Marley in 1976. The judges were unanimous in their decision to award "A Brief History of Seven Killings" because it "kept surprising the judges." The Guardian
Hillary Clinton emerges strong from first Democratic debate. That's the consensus. She even got a boost from rival Bernie Sanders who lambasted the media for spilling so much ink on Clinton's email controversy.
Sharp differences on Wall Street. Clinton would tweak while former Maryland Governor Martin O'Malley would re-introduce