Wall Street could be in for another rough ride after a short reprieve. All three major averages are back in the minus column (^DJI, ^GSPC, ^IXIC) this morning after breaking a 5-day losing streak on Thursday, as investors remain cautious ahead of the UK referendum vote next week.
Smith & Wesson sales surge
Smith & Wesson (SWHC) shares surged in early trading. The gun maker raised its outlook for the current quarter, and the year, after it reported better-than-expected earnings and revenue for its fiscal fourth quarter, with sales jumping 22%. Demand for fire arms tends to rise after violent incidents like the one in Orlando amid concerns that tougher regulations will restrict access in the future. That makes shares of gun manufacturers like Smith & Wesson more appealing to investors.
More headaches for Apple
Apple (AAPL) shares were lower in early trading after a Chinese bureau claimed that the US tech giant may have violated patents in their iPhone 6 and 6 Plus, according to various reports. A small electronics maker in China — Shenzhen Baili says the iPhone is too similar to its 100C phone. Now Apple may have to stop selling iPhones in China. The company can appeal the ruling but did not comment on its next move.
Stocks to watch
Elizabeth Arden (RDEN) shares soared in early trading. The cosmetics company is being bought by rival Revlon (REV) for $419 million dollars in cash, or $14 dollars a share. That's a 50% premium based on Elizabeth Arden's closing price on Thursday. The deal will help expand Revlon's global footprint.
Lumber Liquidators (LL) shares surged in the pre-market. The U.S. Consumer Product Safety Commission ended its probe of the company after testing showed no unsafe levels of formaldehyde in its flooring. Shares of Lumber Liquidators have taken a big hit following a "60 Minutes" report last March suggesting its flooring from China contained high levels of the cancer-causing substance. Lumber Liquidators has agreed not to resume selling its existing inventory of laminate flooring previously sourced from China.
Oracle (ORCL) shares got a nice pop this morning. Even though the software giant posted earnings per share that missed estimates, revenue topped expectations thanks mainly to its growing cloud business, which raked in $690 million dollars. That's a 66% increase from a year ago for that segment, helping offset the decline in software sales.
The city of brotherly love is the first to pass a soda tax. Philadelphia’s city council voted 13 to 4 to approve a 1.5 cent “per ounce” tax on sugary and diet drinks. The tax goes into effect in January. The American Beverage Association, which represents Pepsi (PEP) and Coca-Cola (KO) plans to fight the tax in court.