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After Hours: Amazon Is Defeated in Court, Broadcom Soars to New Highs

By Eric Volkman - Jul 3, 2019 at 7:44PM

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The big retailer suffers a legal setback, while a hot takeover rumor in the IT sector gathers steam.

The minds of most investors are on the barbecues and fireworks of July 4, so there hasn't been too much serious action so far following today's abbreviated market hours.

That said, a few pyrotechnics have already occurred with certain stocks. It's worth watching their trajectory after the beach visits, hot-dog-eating, and flag-waving are over.

Person in black robes rapping a gavel.

Image source: Getty Images.

Court: Amazon liable for third-party merch (AMZN 0.19%) is the earth's largest retailer, but it's been cut down to size in the legal arena. On Wednesday, it was made known after the market closed that a federal appeals court has ruled against the massive company in a product-liability case that could set a new precedent.

The 3rd U.S. Circuit Court of Appeals in Philadelphia decided that Amazon may be held liable when it functions as a marketplace for third-party products. A Pennsylvania woman named Heather Oberdorf sued the company when a ring on a dog collar -- sold via Amazon by one of those third-party merchants -- malfunctioned, sending a retractable leash flying and causing her an eye injury.

In its ruling, the court said that according to U.S. tort law, Amazon is a "seller" in such a transaction. As a seller, it is subject to the liability laws of Pennsylvania. Those laws are considered rather strict in relation to those of other states.

The ruling goes against the grain of lawsuits related to third-party merchandise sold on Amazon. Several other courts in the U.S., including a pair of federal appellate courts, have ruled in favor of the retailer in the Oberdorf case.

Amazon has not yet commented on this most recent ruling. Its shareholders don't seem too spooked by the legal setback, though -- the company's shares are down only very slightly in after-hours action.

Symantec cruises even higher

Shares of cybersecurity company Symantec (NLOK -0.17%) are up modestly after market close, sending the stock to greater record highs. At the moment, it's trading at levels not seen in over a year.

The reason is simple: A hot rumor has it that the highly acquisitive IT conglomerate Broadcom (AVGO -4.27%) is gearing up to buy the company. The latest reports on the situation have it that a deal is imminent. An article published Wednesday afternoon in the Financial Times, citing "people briefed on the move," said that a deal for Broadcom to purchase Symantec for more than $15 billion was at an advanced stage.

This wouldn't be Broadcom's latest expensive foray into software. Last year it paid nearly $19 billion in cash to acquire CA Technologies, a veteran in that segment.

Since those buyout rumors began to gather steam earlier in the week, Symantec stock has been on a sharp rise.

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