The Zacks Analyst Blog Highlights: Chevron, Statoil, Merck, Boeing and General Electric

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Dec 15, 2014, 09:30 ET

CHICAGO, Dec. 15, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Chevron Corp. (NYSE:CVX-Free Report), Statoil ASA (NYSE:STO-Free Report), Merck & Co. Inc. (NYSE:MRK-Free Report), Boeing Co. (NYSE:BA-Free Report) and General Electric Company (NYSE:GE-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Friday's Analyst Blog:

Dow 30 Stock Roundup

The Dow had a particularly disappointing week, following a slump in oil prices and disappointing overseas economic data. The blue-chip index began the week on a dismal note because of these factors in the absence of significant domestic data.

The Dow took losses once again on Tuesday as investors remained concerned about the global economy and political turmoil in Greece. The blue-chip index recorded its biggest decline since Oct 9 on Wednesday, after a slump in oil prices dragged down energy shares. Ultimately, the Dow rebounded on Thursday propelled by better-than-expected retail sales data and an impressive initial claims report. The Dow has lost 2% during the first four trading days.

Last Week's Performance

The Dow declined 0.6% on Monday after a slump in oil prices and disappointing overseas economic data dented investor sentiment. Energy shares were hit hard after oil prices plunged to a five-year low over continued concerns of oversupply. Moreover, discouraging China's trade numbers, contraction of Japan's economy and less-than-expected expansion in Germany's industrial output has raised concerns of a slowdown in global economy.

Oil prices took a beating on Monday. The West Texas Intermediate (WTI) crude oil dropped to its lowest level since Jul 2009. Additionally, Brent crude oil prices slumped to its lowest level in five years. Oil prices tumbled on forecasts that oversupply will persist in the first half of 2015.

Meanwhile, China's imports dropped 6.7% in November from the year-ago period, in contrast to analysts' forecast of a 3.9% increase. On the other hand, exports increased 4.7% in November, lower less than October's increase of 11.6%.

Separately, Japan's economy shrank 1.9% from July to September, more than the preliminary estimate of 1.6%. Additionally, German industrial output expanded 0.2% in October, less than analysts' expectation of a rise by 0.3%.

Stocks ended Tuesday's trading session on a mixed note as investors remained concerned about the global economy and political turmoil in Greece. People's Bank of China's move to tighten rules on loans and unexpected declaration of presidential elections in Greece dented investor sentiment. However, the Dow lost only 0.3% erasing much of the initial losses, banking on a rally in energy and technology stocks.

Greece's ASE Index plunged 12.8% after Prime Minister Antonis Samaras declared presidential election. This move came in after the country was given an additional two months to fulfil its bailout obligations. Separately, Germany's November import figures declined 3.1%.

Investors were primarily concerned about economic weakness in China. The country's benchmark Shanghai Composite Index tumbled 5.4%, its biggest one-day percentage decline since Aug 2009. The index plunged after the People's Bank of China tightened lending rules. China's stocks took a beating after the regulator restricted investors from using low-grade corporate debt as security to raise cash. The blue-chip index lost 0.3%.

The Dow slumped 1.5% on Wednesday, recording its biggest decline since Oct 9. Benchmarks suffered their biggest drop in two months on Wednesday after a slump in oil prices dragged energy shares down. Oil prices took a beating after the Organization of Petroleum Exporting Countries (OPEC) slashed its demand for oil estimates in the next year due to abundant North American output and rise in other producers.

OPEC predicts demand for its oil in 2015 to be at 28.9 million barrels a day, less than 29.4 million barrels a day in 2014. Stocks rebounded on Thursday propelled by better-than-expected retail sales data and an impressive initial claims report. Advance estimates of U.S. retail and food services sales for November increased 0.7% from October to $449.3 billion, easily beating the consensus estimate of a gain of 0.4%. Also, retail sales data reflected a decent 5.1% year-on-year jump in retails sales, which is adjusted for seasonal variation and holiday and trading- day differences, but not for price changes.

Meanwhile, jobless claims for the week ending Dec 6 was 294,000, down from previous week's 297,000. This was 3,000 lower than consensus estimate of 297,000. Indices made a comeback from the slump they suffered a day earlier and the bearish mood that mostly prevailed through this week. However, some of the day's gains were eroded post noon by concerns over the US crude futures falling below $60 per barrel for the first time since Jul 2009. The blue-chip index added 0.4%.

Components Moving the Index

Chevron Corp.'s (NYSE:CVX-Free Report) affiliate Chevron New Zealand Exploration Ltd has acquired exploration rights in three blocks located off the coast of New Zealand. This expands the portfolio of the U.S. energy giant's long-term projects in the Asia-Pacific region.

The blocks – 57083, 57085 and 57087 – are located at water depths of 800 meters to 3,000 meters in the Pegasus and East Coast basins. Chevron New Zealand Exploration Ltd., owns a 50% stake in the block and will act as its operator. The remaining 50% interest is held by Norway's Statoil ASA (NYSE:STO-Free Report).

Merck & Co. Inc. (NYSE:MRK-Free Report) announced encouraging early results from the ongoing phase Ib KEYNOTE-013 study on its anti-PD-1 therapy, Keytruda (pembrolizumab).

Results revealed that patients suffering from relapsed/refractory classical Hodgkin Lymphoma treated with Keytruda achieved an overall response rate of 66%. These patients either failed or were ineligible to respond to transplant and disease progressed on or after treatment with Seattle Genetics Inc.'s (SGEN) Adcetris (brentuximab vedotin). Results further revealed that 21% patients in the study achieved complete response.

The study is evaluating the safety, tolerability, and efficacy of Keytruda as a monotherapy in patients suffering from blood cancer like myelodysplastic syndromes, multiple myeloma, Hodgkin lymphoma, mediastinal large B cell lymphoma and non-Hodgkin's lymphoma.

The Boeing Co. (NYSE:BA-Free Report) booked a couple of contracts, worth a cumulative $91.6 million, from the Pentagon on Dec 7.

A $78.7 million delivery order came from the U.S. Air Force on a previously awarded contract for C-32 and C-40 aircraft fleet support. Work on this contract is expected to be completed by Dec 31, 2015.

Under the second contract, Boeing is to exercise the option on a previously awarded contract to continue logistics support, special studies, and local area network sustainment. Boeing is also entitled to carry on maintenance and operations services for the development and delivery of logistics infrastructure for the Space-Based Space Surveillance Block 10 System. This is a modification contract valued at $12.9 million. The contract will run through Jun 20, 2015.

General Electric Company's (NYSE:GE-Free Report) unit GE Energy Financial Services, which funds energy infrastructure projects, strengthened its presence in the Japanese renewable energy market with an agreement to build the 42MW Mimasaka Musashi solar plant in Japan in collaboration with Tokyo-based Pacifico Energy.

The GE unit and Virginia Solar Group have both invested in the plant. The funding was executed on a non–recourse project finance basis and was backed by a ¥13billion ($109.2 million) credit facility from the Bank of Tokyo-Mitsubishi UFJ and Chugoku Bank. Additional financial details were kept under wraps.

In a separate development, GE Capital, Rail Services, recently announced that it will deliver 875 tank cars to its customers that adhere by the latest 2015 safety appliance standards. All railcars manufactured after Jan 2015 will be required to meet this new standard.

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