US stocks were mixed after a report on Tuesday showed consumer confidence fell to a more than six-year low in August amid a renewed increase in coronavirus cases during the summer. The consumer confidence index dropped to 84.8 this month from a revised 91.7 in July. The Dow Jones Industrial Average was down 0.4%, while the S&P 500 index was up a mere 0.2% after reaching another record high on Monday, closing above 3,400 for the first time. The Nasdaq Composite Index inched up 0.5%.
Mergers & Acquisitions: Palo Alto announced the acquisition of incident-response company Crypsis Group for $265 million in cash to support its Cortex XDR platform. The company reported better-than-expected 4Q results on Monday as the COVID-19 pandemic-led work-from-home trend boosted demand for network security products.
In other software-related news UK-based industrial software company Aveva announced an agreement to buy SoftBank-backed OSIsoft at an enterprise value of $5 billion in a bid to help businesses run more efficiently and accelerate their digital shift.
Meanwhile US buyout fund Blackstone said it will divest about 40% of its stake in Cheniere Energy Inc’s limited partnership to Brookfield Infrastructure and its own affiliated company. Brookfield reportedly negotiated the terms of the transaction, including a $34.25 per unit sale price that values the deal at $7 billion.
Stock movers: American Airlines dropped 3% after the US air carrier announced it is cutting 19,000 jobs in October once federal aid that secured those jobs expires. American Airlines CEO Doug Parker and presiden, Robert Isom, wrote in a staff note, “We have come to you many times throughout the pandemic, often with sobering updates on a world none of us could have imagined. Today is the hardest message we have had to share so far.”
Portland General sank 9% after the electric utility company lowered its full-year 2020 earnings guidance due to losses from energy trading activities. The news prompted Merrill Lynch analyst Julien Dumoulin Smith to cut the stock to Hold from Buy, while reiterating a price target of $41.
Facebook rose 3.4% as the social media network rolled out its new Shop feature to find business and shop for products on the Facebook app. In the coming weeks, US sellers will be able to start using checkout on Instagram. Other features include Facebook Live Shopping to help businesses set up a live experience featuring products from their Shop and sell directly from the video.
J.M. Smucker surged 7% after the food products company surprised investors posting a better-than-expected quarterly profit in its fiscal first quarter. Adjusted earnings came in at $2.37 per share topping analysts’ expectations for $1.67 in earnings per share. Revenues amounted to $1.97 billion exceeding the Street consensus for $1.81 billion.
Citigroup analyst Paul Lejuez raised Gap to Buy from Sell sending shares up 9%. Lejuez doubled the stock’s price target to $24 (42% upside potential), saying that the retailer’s Athleta and Old Navy brands have significant value within the Gap portfolio. “Bottom line is Athleta is one of the few athletic brands with a combination of scale, but plenty of room for growth (which could be attractive to several acquisitive companies),” the analyst wrote in a note to investors. (See GPS stock analysis on TipRanks)
