| Mar 13, 2018 | 4:03 PM EDT
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Closing Bell

Markets gave back all the gains they made in morning trading Tuesday, closing the day near session lows across the board after President Trump announced that former Secretary of State Rex Tillerson will be replaced by current CIA Director Mike Pompeo. 

The Dow Jones Industrial Average fell 0.68% to 25,006 while the Nasdaq declined 1.02% to 7,511 and the S&P 500 declined 0.64% to 2,765. 

AT&T, Time Warner Merger to Cost Subscribers an Extra $436 Million Annually, U.S. Says

The proposed $65 billion merger between AT&T (T) and Time Warner (TWX) will cost subscribers an extra $436 million annually, the U.S. Department of Justice says in its lawsuit attempting to block the merger. 

"In short, the transaction violates Section 7 of the Clayton Act, because its effect 'may be substantially to lessen competition.' Prices for current services will go up and development of emerging competition will slow down," the DOJ said in its trial brief.

AT&T disagreed with the number cited, but said that even if their calculations are correct, the average customer's bill would only increase by 45 cents a month. 

Dick's Says New Gun Policy Is a Headwind

Dick's Sporting Goods DKS decision to raise the minimum age required to purchase firearms at its stores to 21 has resulted in a loss of customers, the company said during its earnings call Tuesday. 

While the company said that hit has received an "outpouring of support" for its new policies, CEO Edward Stack also said that "some of those customers that buy firearms, buy other things also. There are just going to be some people who just don't shop us anymore for anything."

Dick's said that its hunting business has posted negative comps with expectations that the negative trend will continue this year due to its new gun policy. 

All told, the company reported a 7.3% increase in revenue to $2.66 billion while earnings a profit of $1.22 per share on an adjusted basis. Analysts were expected the company to report earnings of $1.20. 

Markets Turn Lower During Volatile Session

The dismissal of Rex Tillerson as Secretary of State originally failed to affect markets, but as the day has gone on volatility has climbed and stocks are currently trading near session lows. 

The Dow Jones Industrial Average was the lone major index to trade in the green, rising 0.13% to 25,211 Tuesday afternoon. The S&P 500 was basically flat at 2,783 and the Nasdaq was down 0.26% to 7,569. 

CIA Director Mike Pompeo is being tapped to take over for Tillerson, who has clashed with President Trump on multiple issues during his year-long tenure. 

Coincheck Repays Customers Affected by $435 Million Crypto Hack

Japanese cryptocurrency exchange Coincheck has repaid customers affected by a January hack $435 million, the company said Tuesday. 

The hack affected 260,000 customers who had kept a digital currency called N?EM at Coincheck. Customers were reimbursed at a rate of 88.549 yen per NEM, in line with what Coincheck had previously promised. 

Coincheck also resumed accepting withdrawals of select cryptos including bitcoin this week. The company hasn't resumed accepting deposits yet. 

Apple Music Boasts 38 Million Subscribers

Apple Music, Apple's (AAPL) music subscription service, saw its subscriber base increase by two million in just over the month to a total of 38 million subscribers. 

Apple announced the new number at the South by Southwest Conference in Austin Texas. 

Rival and market leader Spotify has nearly double the number of subscribers with 71 million paying members and 159 million people using the service at least once a month. 

Harvey Schwartz Gave Goldman Sachs an Ultimatum That Led to Retirement

Goldman Sachs' (GS) CEO Lloyd Blankfein's preference for David Solomon to succeed him as CEO led to Harvey Schwartz retirement, according to a New York Times report. 

Schwartz approached lead director Adebayo Ogunlesi with an ultimatum that he would resign unless the CEO job was offered to him once Blankfein stepped down, according to people familiar with the matter. 

Goldman announced, Schwartz resignation as the company's co-president and co-COO on Monday, clearing the way for Solomon to succeed Blankfein. The Wall Street Journal reported that Blankfein could retire as soon as the end of this year. 

American Airlines Predicts at Least $5 Billion in Pretax Earnings Going Forward

American Airlines (AAL) CEO Doug Parker told JPMorgan's Aviation, Transportation and Industrials conference that the company will average at least $5 billion in pretax earnings annually going forward.

Parker said that the company's mentality has shifted from survival mode before its merger with U.S. Airways in 2013 to thriving mode. Survival mode was characterized by short-term decisions to stay afloat. Now that its finances are secure the company is looking at long-term growth initiatives like changing company culture and replacing its fleet. 

American Airlines has inducted 496 new aircraft while retiring 469 aircraft since 2014 in what it called the most aggressive modernization plan in the history aviation. American Airlines' fleet is valued at $30 billion, compared to valuations in the mid-teen billions for its competitors. 

American Airlines shares were up 1.4% Tuesday morning. 

Defense Stocks Climbing Following Tillerson Ouster

President Donald Trump's decision to oust Secretary of State Rex Tillerson in favor of CIA Director Mike Pompeo sent defense and aerospace stocks rising on Tuesday, March 13.

Military communications and aviation system manufacturer Rockwell Collins Inc. (COL) was up 0.23 in premarket trading, while Northrop Grumman Corp. (NOC) gained 0.74%, Boeing Co. (BA) climbed 0.31%, Lockheed Martin Corp. (LMT) rose 0.21%, and Raytheon Co. (RTN) was up 0.54%.

Mike Pompeo, Director of the CIA, will become our new Secretary of State. He will do a fantastic job! Thank you to Rex Tillerson for his service! Gina Haspel will become the new Director of the CIA, and the first woman so chosen. Congratulations to all!

— Donald J. Trump (@realDonaldTrump) March 13, 2018

United Soars on PRASM Update

United Continental (UAL) shares were rising 2.8% premarket after the airline disclosed that it expects revenue per available seat mile, a key airline profitability metric, to be up between 1% and 3% in the first quarter. The previous PRASM outlook was for between 0% and 2% growth. 

The company also lowered its capacity growth expectations to between 3.5% and 4% from its previous view between 3.5% and 4.5%. Costs per available seat mile, another key metric, are expected to be between flat and down 1%. 

The company also reiterated its 2020 EPS guidance between $11 and $13 per share. 

White House Issues a Presidential Order Blocking Broadcom's Bid for Qualcomm

Broadcom's (AVGO) hostile takeover bid for rival Qualcomm (QCOM) has officially been put out ice after the White House issued a presidential order prohibiting the takeover, merger or acquisition of the company by Singapore-based Broadcom. 

The government also ordered Qualcomm to hold its annual stockholder meeting, which had been delayed, no later than 10 days after a notice, that it said should be provided as soon as possible, of the meeting is provided to stockholders. 

"The Purchaser and Qualcomm shall immediately and permanently abandon the proposed takeover. Immediately upon completion of all steps necessary to terminate the proposed takeover of Qualcomm, the Purchaser and Qualcomm shall certify in writing to the Committee on Foreign Investment in the United States (CFIUS) that such termination has been effected in accordance with this order and that all steps necessary to fully and permanently abandon the proposed takeover of Qualcomm have been completed," The President's edict said.

Broadcom had proposed to purchase Qualcomm for $117 billion, in what would have been the largest tech takeover in history. 

However the Treasury Department's Committee on Foreign Investment had expressed concerns over the hostile bid due to national security concerns tied to the country's 5G network. 


U.S. futures were rising ahead of the opening bell Tuesday as markets looked to bounce back from an uneven day of trading Monday. 

Dow futures were up 0.21%, indicating an open 52 points higher, while Nasdaq futures rose 0.13%, indicating an open 9 points higher, snd S&P futures were rising 0.22%, indicating an open 6 points higher. 

World markets were mixed. In Asia, the Shanghai Composite was the lone major index to decline, falling 0.49% on the day, while the Hang Seng and Nikkei both rose. 

In Europe, the FTSE 100 was basically flat while the CAC 40 led gains, rising 0.4% with about five hours left in trading. 

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