U.S. futures were in the red to start off the new month. The S&P 500, Dow Jones Industrials and Nasdaq were all down about 0.3% before the bell. Crude oil was also declining, off 1.2% ahead of Thursday's OPEC meeting.
It was a down day in other world markets. All the Asian markets closed in the red Thursday, with the Nikkei declining the most, down 1.6%, and the Hang Seng and Shanghai Composite off 0.3% and 0.1%, respectively. European markets were also lower. The FTSE 100 was down 1.1%, while the DAX and the CAC 40 were both about 0.8% lower with about three hours left of trading.
Nike (NKE) shares were down about 3% during premarket trading Wednesday after Morgan Stanley and Bank of America revised their opinions of the athletic apparel company. Analysts at Morgan Stanley said in a research note Thursday that the U.S. athletic apparel category is weakening, which raises the possibility of a sales slowdown for Nike. Due to this weakness, the firm lowered their price target by $9 to $60. Additionally, Bank of America Merrill Lynch analysts concluded that Nike is losing market share in North America for the first time since 2010, as Adidas and Growth Seeker holding Under Armour (UA) are "leading growth in the market." The firm downgraded Nike to Neutral from Buy and also lowered its price target to $60 from $72.
Shares of Staples (SPLS) were up a tick despite CEO Ron Sargent announcing that he will be stepping down. His departure follows Staples and Office Depot (ODP) dropping their $6.3 billion merger earlier this month after antitrust regulators opposed it. Sargent has been CEO of the office supply retailer for 14 years.
Whole Foods Market (WFM) shares were rising 2% during premarket trading, as Credit Suisse upgraded the supermarket chain to Outperform from Neutral. In a research note Thursday, analysts said they see a "unique opportunity" to own Whole Foods while still in the early stages of repositioning that should reinvigorate growth. Whole Foods is cutting prices and aggressively reducing costs, which shows the team's move to return to growth. However, the firm noted that earnings could "remain choppy near-term," but analysts see a recovery within 18 months.
Action Alerts PLUS holding Kraft Heinz (KHC) shares were down slightly before the bell as Warren Buffett awaits a $8 billion payment from the company. In a the most recent letter to shareholders, Buffett wrote that this "will be good news for Kraft Heinz and bad news for Berkshire." Berkshire Hathaway (BRK.B, BRK.A) also owns Kraft Heinz preferred shares that pay $720 million annually, and are carried at $7.7 billion on Berkshire's balance sheet.
Finally, Salesforce.com (CRM) announced an agreement to buy enterprise cloud-commerce company Demandware (DWRE) for $2.8 billion. Demandware's shares surged more than 55% in premarket trading on news of the sale. The stock had closed at $48 on Tuesday. San Francisco-based Salesforce will pay $75 a share in cash for all of Demandware's outstanding shares. The deal is expected to close in the second quarter of Saleforce's fiscal year 2017, ending July 31, 2016.
--Written by Anders Keitz
