U.S. stocks fell on Tuesday, as the Dow and S&P retreated from their latest records and the Nasdaq dipped below 5,000 after scaling the milestone level for the first time in 15 years. Disappointing auto sales also gave a reason to pause.
Springleaf Holdings Inc said it would buy Citigroup Inc's OneMain Financial Holdings Inc for $4.25 billion in cash, creating the largest subprime lender in the United States. Citigroup has been seeking to hive off OneMain since at least 2011 as part of the No. 3 U.S. bank's plan to sell unwanted assets and focus on wealthier clients. The deal will create a lender with $15 billion in assets and nearly 2,000 branches, serving the large and growing population of non-prime customers in the United States. Springleaf shares soared 38 percent to a record $52.44 on Tuesday.
"The U.S. economy and the job outlook are starting the year in a stronger position than 2014," said Randall Stephenson, chairman of Business Roundtable and CEO of AT&T Inc . Passage of tax-extender legislation late last year gave companies greater confidence to invest, Stephenson said.
Best Buy Co Inc , the largest U.S. consumer electronics chain, on Tuesday reported higher-than-expected quarterly earnings on a strong holiday season and said it would buy back stock for the first time since 2012. Chief Executive Officer Hubert Joly said on a conference call that Best Buy planned this year to start a cost-cutting effort to save $400 million over the next three years. Best Buy authorized a $1 billion share buyback over three years and announced a special dividend of about $180 million, or 51 cents per share, from proceeds from settlements of a lawsuit on price-fixing of TFT-LCD panels. Best Buy's sales at stores open at least a year increased 2 percent during the fourth quarter ended on Jan. 31, slightly more than the 1.9 percent rise estimated by analysts polled by research firm Consensus Metrix.
For the second year in a row, ferocious winter weather slowed U.S. vehicle sales in February, causing the major automakers to miss analysts' bullish projections. Eleven analysts surveyed by Thomson Reuters had expected a year-to-year gain of 7.1 percent. The 48 economists polled by Thomson Reuters, on average, predicted annualized sales in February of 16.7 million vehicles. Most companies blamed extreme weather conditions in the U.S. Northeast and Midwest, and some pointed to a spike in fuel prices toward the end of the month.