S&P 500 futures rose on Wednesday morning, indicating the index will break its two-day decline. European shares bounced back while the yen fell after gaining the most versus the dollar in three years amidst world-wide confusion about when the Federal Reserve will cut back stimulus efforts.
Futures at 8:30 a.m.: DJIA: +0.41% S&P 500: +0.45% NASDAQ: +0.37%
Here’s what’s buzzing on Wednesday morning:
Boeing (NYSE:BA) has suffered yet another setback with its 787 Dreamliner. ANA Holdings had to switch aircrafts for a flight from Ube in western Japan to Tokyo’s Haneda airport when the 787′s engine failed to start. The incident represents the third cancellation for the Dreamliner in Japan after the craft was grounded for four months due to the battery system overheating. Boeing has said this incident is unrelated to previous problems with the 787′s battery.
Coty is due to price its IPO later today, which will help the beauty products conglomerate raise up to $1.22 billion. IPO buyers won’t have much influence with the current deal, as it retains the firm’s 85 percent voting power, but buyers could stand to benefit as the company looks to expand into developing countries with new skin care products. Coty, which makes perfumes by Calvin Klein and Marc Jacobs, is looking to diversify outside the fragrance industry, which can be more vulnerable to declines in spending than other beauty products.
Herbalife (NYSE:HLF) released the results of a Nielsen study showing that the company has had 7.9 million customers in the U.S. in the last three months, which represents 3.3 percent of the U.S. population. The study comes as the Los Angeles-based nutritional supplement company faces allegations from investor Bill Ackman that it’s a pyramid scheme. Herbalife products are not sold in stores, but are sold by independent distributors who recruit customers and recommend products based on customers’ needs. Ackman said most Herbalife distributors lose money, while those at the top get rich on commissions.
Yum’s (NYSE:YUM) KFC has been suffering in China amidst avian flu fears, taking a 19 percent hit in May. That number is actually an improvement on the 29 percent decline KFC faced in April. While KFC has been struggling, Pizza Hut has shown a 12 percent growth. The bird flu scare has dampened McDonald’s (NYSE:MCD) sales in China as well. Yum remains optimistic about its growth in China, citing the fact that previous bird flu scares have not made a long-lasting impact.
Vodafone (NASDAQ:VOD) shares fell after the company confirmed it’s interested in acquiring German cable, TV, and internet provider Kabel Deutschland. The move represents a departure from the British Vodafone’s focus on the cellular market. The deal could help Vodafone, which owns 45 percent of Verizon Wireless (NYSE:VZ), compete with cable and internet companies that have been expanding into cellular services.
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