Today's Stock Market News Driven by AMZN Spat and Tax Inversion Deals

Stock market news today, August 12, 2014: U.S. stock markets jumped modestly Monday as they continued to recover from a recent reversal. Investors remain guarded about geopolitical concerns in Ukraine, Gaza, and Iraq, although easing tensions in some of those recent hotspots may be giving stocks a lift.

The consumer staples led yesterday's gains, propelled by a positive earnings report by Sysco Corp. (NYSE: SYY), which saw shares increase by more than 3% after its announcement. Shares of Tesla Motors Inc. (Nasdaq: TSLA) were also up 4.5% after the company received another upgrade from Deutsche Bank AG (NYSE: DB).

Here's what you should know to make your Tuesday profitable:

• Digital Standoff: The Wall Street Journal reports that the ongoing dispute between e-commerce giant Amazon.com Inc. (Nasdaq: AMZN) and The Walt Disney Co. (NYSE: DIS) is about more than just product prices. The financial newspaper reports that the companies are in a dispute over current product promotion and product placement on the e-commerce giant's website. According to the report, the two firms have a major disagreement about AMZN's pricing practices, particularly in how the company is poised to lose money now and then in an effort to match the prices of its competition. AMZN has received a wealth of criticism from authors, production houses, and others over their business practices in recent months. Just last week, more than 900 authors, including Pulitzer Prize winners, horror-icon Steven King, and best-seller John Grisham, signed an open letter accusing AMZN of hurting authors working with Hachette Publishing.

• It's Bananas: Shares of Chiquita Brands International Inc. (NYSE: CQB) surged nearly 30% yesterday on news that the company received a buyout offer from Brazilian agribusiness firm Cutrale Group and investment bank Safra Group. The deal comes in the wake of the Obama Administration's admonishing statements about tax inversions and U.S. companies purchasing foreign firms to reduce their tax burden by relocating to other nations. CQB had signed a deal in March to purchase Irish tropical fruit producer Fyffes PLC and planned to relocate operations abroad. Now, that deal is uncertain after this bid from the two companies. If accepted, CQB would sell itself to the foreign company in order to work around any potential laws created to prevent inversions from providing those tax benefits. American companies could simply sell their operations to the highest international bidder to tackle their tax challenge and maximize shareholder value, an unintended consequence of any action by Washington to deter inversion deals through regulation, legislation, or harsh rhetoric.

Garrett Baldwin

About the Author

Browse Garrett's articles | View Garrett's research services

Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.

Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.

… Read full bio