- Barry Adams
- 01 Aug, 2022
- New York City
Stocks on Wall Street fell at the opening after rallying for three days on the worries that the sentiment may be ahead of market fundamentals.
Benchmark indexes surged the most in July and logged the best monthly gains in two years on the hopes that the Federal Reserve may slow down the future rate hikes and avoid a recession.
Manufacturing activities rose in July for the 26-month in a row but the pace of growth slowed.
The index for manufacturing activities edged slightly lower to 52.8 from 53.0, according to the data released by the Institute for Supply Management Monday.
Investors are also looking ahead to economic data and earnings reports from about 1,200 companies this week.
July non-farm payrolls are scheduled to be released on Friday and economists are estimating an increase of at 250,000 after the labor market expanded by 372,000 in June.
ZoomInfo Technologies, Checkpoint Software, and Activision Blizzard are scheduled to release earnings after the market closes today.
Airbnb, Caterpillar, Cummins, Marriott, Starbucks, S&P Global, Uber are among the 410 companies scheduled to release earnings on Tuesday.
The S&P 500 index decreased 0.2% to 4,124,15 and the Nasdaq Composite index rose 0.2% to 12,408.95.
Futures of crude oil declined $5.12 to $93.51 a barrel and natural gas eased 33 cents to $7.81 a unit.
The yield on 10-year Treasury notes fell to 2.603% and on 2-year notes edged lower to 2.89%.
Oil companies led the decliners after crude oil prices dropped more than 5% in New York and in European trading.
Exxon Mobil Corp and Chevron Corp declined 2.5% and Marathon Oil dropped 4%, Bakers Hughes and Schlumberger declined more than 3%.
In European trading, benchmark indexes advanced and the eurozone manufacturing shrank in July.
S&P Global Purchasing Managers' Index decline was revised to a 25-month low of 49.8 in July from 52.1 in June.
The preliminary estimate showed the July index as 49.6.
Any reading below 50 indicates a contraction, and the manufacturing activities contracted for the first time in over two years.
The DAX index in Frankfurt, the CAC-40 index in Paris, and the FTSE 100 index in London rose 0.4%.
Markets in Asia gained and the Sensex index in Mumbai led the gainers in the region after manufacturing activities rose at the fastest pace in eight months in July.
Domestic vehicle sales also continued to rebound in July as the demand for 2-wheeler and passenger and commercial vehicles soared.
The Sensex extended gains for the fourth day and jumped about 0.95%, the Nikkei index gained 0.7%, and the Hang Seng Index jumped 0.04%.
- Brian Turner
- 30 Jul, 2022
- New York City
Eurozone GDP expanded unexpectedly in the second quarter ending in June, according to the flash estimate released by the eurostat.
On a quarterly basis, the GDP rose 0.7% after rising 0.5% in the first quarter.
On an annual basis, the GDP growth slowed to 4.0% in the second quarter after rising at 5.4% in the first quarter.
The revised estimate of the data is set to be released on August 17.
Despite the rising energy prices and persistent supply chain disruptions, the French economy expanded on rising exports and investments and Spain and Ital's economy grew on rising household spending.
France's GDP rose 0.5% from the first quarter when the economy shrank 0.2%, Spain's GDP advanced 1.1% from the previous quarter when the economy grew 0.2%.
Italy's GDP rose 1.0% in the second quarter after barely growing at 0.1% rate in the previous quarter.
Germany's GDP was flat after rising at 0.8% in the previous quarter and the growth slowed to 1.5% from 3.6% on an annual basis.
Eurozone Inflation Accelerates
The statistical agency also reported July inflation accelerated to 8.9% from June's 8.6% in its flash estimate Friday.
Core inflation excluding food, energy, and alcohol and tobacco rose to 4.0% from 3.7% in the previous month.
Estonia, Latvia, and Lithuania reported more than 20% inflation rate topping the inflation rate among all other currency block members.
- Barry Adams
- 29 Jul, 2022
- New York City
Wall Street indexes extended gains for the third day in a row after tech companies reported better-than-expected earnings and investors looked beyond the latest rate hike and recession worries.
Investors overlooked the latest release of preferred inflation measure data and surmised that the weaker GDP data may encourage the Fed in slowing the future rate hikes.
For the week, the Nasdaq Composite and the S&P 500 indexes advanced 4.0%.
The S&P 500 index increased 1.4% to 4,130.29 and the Nasdaq Composite index rose 1.9% to 12,390.35.
In July, the S&P 500 index gained 8.8%, its best monthly return in the year so far and the Nasdaq Composite index has jumped 12%, its best monthly performance in 2022.
Futures of crude oil increased $1.80 to $98.21 a barrel and natural gas gained 17 cents to $8.31 a unit.
PCE Jumps to 40-year High
The yield on 10-year Treasury notes rose to 2.703% and 2-year notes rose to 2.93% after the Fed's preferred measure of inflation, which always understates the inflation experienced by most families, rose 6.8% in June.
The personal consumption expenditure price index rose 6.8% in June, the fastest pace since 6.9% in 1982, according to the report released by the Bureau of Economic Analysis Friday.
The PCE index increased 1% from May, the largest monthly increase since February 1981.
Core PCE, which excluded food and energy prices, rose 4.8% in June after rising at 5.3% in February.
On a monthly basis, the core PCE index increased 0.6%, its largest monthly increase since April 2021.
Movers: Amazon, Apple, Chevron, ExxonMobil, Intel
Amazon.com, Inc surged 10.4% to $134.99 after the online retailer reported a loss but guided higher-than-expected third quarter revenues.
Revenues in the second quarter rose 7% to $121.23 billion.
In the second quarter, Amazon reported a net loss of $2.0 billion or 20 cents a diluted share compared to $7.8 billion or 76 cents a diluted share a year ago.
Second quarter 2022 net loss includes a pre-tax valuation loss of $3.9 billion from its investment in Rivian Automotive, Inc.
The online retailer guided third quarter revenues between $125 billion and $130 billion, an increase between 13% and 17% from a year ago.
Apple Inc jumped 3.1% to $162.04 in trading after the regular trading hours after the company reported June quarter revenues increased 2% to $83 billion.
Net income in the fiscal 2022 third quarter declined to $19.4 billion or $1.20 a diluted share from $21.7 billion or $1.331 a diluted share a year ago.
Chevron Corp increased 8.5% to $163.14 after the oil explorer, refiner, and distributor reported June quarter revenues soared more than 80% to $68.7 billion from $37.6 billion a year ago.
Net income in the quarter soared four-fold to $11.7 billion from $3.1 billion a year ago.
Diluted earnings per share soared to $5.95 from $1.60 a year ago.
Exxon Mobil Corp increased 4.5% to $96.65 after the energy company said June quarter revenues soared to $115.7 billion from $67.7 billion a year ago.
Net income in the quarter jumped to $17.9 billion from $4.5 billion a year ago.
Diluted earnings per share rose to $4.21 from $1.10 a year ago.
Exxon Mobil also announced a quarterly dividend of $3.72 billion or 88 cents compared to 87 cents a share or $3.7 billion a year ago.
Free cash flow in the quarter totaled $16.9 billion and shareholder distributions were $7.6 billion for the quarter, including $3.7 billion of dividends.
Intel Corp declined 10.7% to $35.41 after the semiconductor chipmaker reported June quarter revenues declined 22% to $15.3 billion, its largest decline in more than a decade.
Intel's gross margin plunged to 36.5% from 57.1% a year ago and swung to net loss of $0.5 billion from net income of $5.1 billion a year ago.
Quarterly loss was 11 cents a diluted share compared to income of $1.24 a year ago.
Procter & Gamble Co declined 4.8% to $140.90 after the consumer products maker reported net sales in the fiscal year 2022 fourth quarter ending in June increased 3% to $19.5 billion.
Net income rose 5% to $3.06 billion from $2.90 billion and diluted earnings per share rose to $1.21 from $1.13 a year ago.
Eurozone Growth Accelerates
Eurozone GDP expanded unexpectedly in the second quarter ending in June, according to the flash estimate released by the eurostat.
GDP rose 0.7% on a quarterly basis after rising at 0.5% in the first quarter.
On an annual basis, the GDP growth slowed to 4.0% in the second quarter after rising at 5.4% in the first quarter.
The revised estimate of the data is set to be released on August 17.
Despite the rising energy prices and persistent supply chain disruptions, the French economy expanded on rising exports and investments and Spain and Ital's economy grew on rising household spending.
France's GDP rose 0.5% from the first quarter when the economy shrank 0.2%, Spain's GDP rose 1.1% from the previous quarter when the economy grew 0.2%.
Italy's GDP rose 1.0% in the second quarter after rising at 0.1% rate in the previous quarter.
Germany's GDP was flat after rising at 0.8% in the previous quarter on a quarterly basis and the growth slowed to 1.5% from 3.6% on an annual basis.
The statistical agency also reported July inflation accelerated to 8.9% from June's 8.6% in its flash estimate Friday.
Core inflation excluding food, energy, and alcohol and tobacco rose to 4.0% from 3.7% in the previous month.
Estonia, Latvia, and Lithuania reported more than 20% inflation rate topping the inflation rate among all other currency block members.
- Brian Turner
- 29 Jul, 2022
- New York City
The yield on 10-year Treasury notes rose to 2.703% and 2-year notes rose to 2.93% after the Fed's preferred measure of inflation, which always understates the inflation experienced by most families, rose 6.8% in June.
The personal consumption expenditure price index rose 6.8% in June, the fastest pace since 6.9% in 1982, according to the report released by the Bureau of Economic Analysis Friday.
The PCE index increased 1% from May, the largest monthly increase since February 1981.
Core PCE, which excluded food and energy prices, rose 4.8% in June after rising at 5.3% in February.
On a monthly basis, the core PCE index increased 0.6%, its largest monthly increase since April 2021.
- Barry Adams
- 29 Jul, 2022
- New York City
Benchmark indexes are set to rise for the third day in a row and extend weekly and monthly gains on the back of positive sentiment.
The S&P 500 and the Nasdaq Composite indexes are set to advance at least 3.5% in the week after investors digested the latest batch of earnings.
Investors overlooked the latest release of preferred inflation measure data and surmised that the weaker GDP data may encourage the Fed in slowing the future rate hikes.
The S&P 500 index increased 1.3% to 4,124.725 and the Nasdaq Composite index rose 1.6% to 12,358.92.
In July, the S&P 500 index is up 8%, the best monthly return in the year so-far and the Nasdaq Composite index has jumped 12%, its best monthly return in 2022.
Futures of crude oil increased $3.80 to $100.21 a barrel and natural gas gained 20 cents to $8.32 a unit.
Amazon.com, Inc surged 10.4% to $134.99 after the online retailer reported a loss but guided higher-than-expected third quarter revenues.
Revenues in the second quarter rose 7% to $121.23 billion.
In the second quarter, Amazon reported a net loss of $2.0 billion or 20 cents a diluted share compared to $7.8 billion or 76 cents a diluted share a year ago.
Second quarter 2022 net loss includes a pre-tax valuation loss of $3.9 billion from its investment in Rivian Automotive, Inc.
The online retailer guided third quarter revenues between $125 billion and $130 billion, an increase between 13% and 17% from a year ago.
Apple Inc jumped 3.1% to $162.04 in trading after the regular trading hours after the company reported June quarter revenues increased 2% to $83 billion.
Net income in the fiscal 2022 third quarter declined to $19.4 billion or $1.20 a diluted share from $21.7 billion or $1.331 a diluted share a year ago.
Chevron Corp increased 8.5% to $163.14 after the oil explorer, refiner, and distributor reported June quarter revenues soared more than 80% to $68.7 billion from $37.6 billion a year ago.
Net income in the quarter soared four-fold to $11.7 billion from $3.1 billion a year ago.
Diluted earnings per share soared to $5.95 from $1.60 a year ago.
Exxon Mobil Corp increased 4.5% to $96.65 after the energy company said June quarter revenues soared to $115.7 billion from $67.7 billion a year ago.
Net income in the quarter jumped to $17.9 billion from $4.5 billion a year ago.
Diluted earnings per share rose to $4.21 from $1.10 a year ago.
Exxon Mobil also announced a quarterly dividend of $3.72 billion or 88 cents compared to 87 cents a share or $3.7 billion a year ago.
Free cash flow in the quarter totaled $16.9 billion and shareholder distributions were $7.6 billion for the quarter, including $3.7 billion of dividends.
Intel Corporation declined 10.7% to $35.41 after the semiconductor chipmaker reported June quarter revenues declined 22% to $15.3 billion, its largest decline in more than a decade.
Intel's gross margin plunged to 36.5% from 57.1% a year ago and swung to net loss of $0.5 billion from net income of $5.1 billion a year ago.
Quarterly loss was 11 cents a diluted share compared to income of $1.24 a year ago.
Procter & Gamble declined 4.8% to $140.90 after the consumer products maker reported net sales in the fiscal year 2022 fourth quarter ending in June increased 3% to $19.5 billion.
Net income rose 5% to $3.06 billion from $2.90 billion and diluted earnings per share rose to $1.21 from $1.13 a year ago.
- Barry Adams
- 29 Jul, 2022
- New York City
Benchmark indexes are set to rise for the third day in a row and extend weekly and monthly gains on the back of positive sentiment.
The S&P 500 and the Nasdaq Composite indexes are set to advance at least 3.5% in the week after investors digested the latest batch of earnings.
Investors overlooked the latest release of preferred inflation measure data and surmised that the weaker GDP data may encourage the Fed in slowing the future rate hikes.
The S&P 500 index increased 1.01% to 4,113.75 and the Nasdaq Composite index rose 1.4% to 12,335.52.
In July, the S&P 500 index is up 8%, the best monthly return in the year so-far and the Nasdaq Composite index has jumped 12%, its best monthly return in 2022.
Futures of crude oil increased $3.80 to $100.21 a barrel and natural gas gained 20 cents to $8.32 a unit.
PCE Jumps to 40-year High
The yield on 10-year Treasury notes rose to 2.703% and 2-year notes rose to 2.93% after the Fed's preferred measure of inflation, which always understates the inflation experienced by most families, rose 6.8% in June.
The personal consumption expenditure price index rose 6.8% in June, the fastest pace since 6.9% in 1982, according to the report released by the Bureau of Economic Analysis Friday.
The PCE index increased 1% from May, the largest monthly increase since February 1981.
Core PCE, which excluded food and energy prices, rose 4.8% in June after rising at 5.3% in February.
On a monthly basis, the core PCE index increased 0.6%, its largest monthly increase since April 2021.
Movers: Amazon, Apple, Intel
Amazon surged 10.4% to $134.99 after the online retailer reported a loss but guided higher-than-expected third quarter revenues.
Revenues in the second quarter rose 7% to $121.23 billion.
In the second quarter, Amazon reported a net loss of $2.0 billion or 20 cents a diluted share compared to $7.8 billion or 76 cents a diluted share a year ago.
Second quarter 2022 net loss includes a pre-tax valuation loss of $3.9 billion from its investment in Rivian Automotive, Inc.
The online retailer guided third quarter revenues between $125 billion and $130 billion, an increase between 13% and 17% from a year ago.
Apple Inc jumped 3.1% to $162.04 in trading after the regular trading hours after the company reported June quarter revenues increased 2% to $83 billion.
Net income in the fiscal 2022 third quarter declined to $19.4 billion or $1.20 a diluted share from $21.7 billion or $1.331 a diluted share a year ago.
Intel declined 10.7% to $35.41 after the semiconductor chipmaker reported June quarter revenues declined 22% to $15.3 billion, its largest decline in more than a decade.
Intel's gross margin plunged to 36.5% from 57.1% a year ago and swung to net loss of $0.5 billion from net income of $5.1 billion a year ago.
Quarterly loss was 11 cents a diluted share compared to income of $1.24 a year ago.
Procter & Gamble declined 4.8% to $140.90 after the consumer products maker reported net sales in the fiscal year 2022 fourth quarter ending in June increased 3% to $19.5 billion.
Net income rose 5% to $3.06 billion from $2.90 billion and diluted earnings per share rose to $1.21 from $1.13 a year ago.
- Barry Adams
- 28 Jul, 2022
- New York City
Stocks on Wall Street closed higher for the second day in a row and the U.S. economy shrank for the second quarter in a row.
Seasonally adjusted GDP declined at a slower pace of 0.9% in the second quarter following the 1.6% fall in the first quarter, the Bureau of Economic Analysis reported Thursday.
Weak private investments and lower investment in inventories and falling government spending drove the pace of the decline.
Higher exports helped but the falling real personal expenditure also dragged the economic activities in the quarter.
On Wall Street most investors regard two consecutive quarterly economic growth declines as the start of the recession.
Officially, the National Bureau of Economic Research's view on the economy is widely accepted as the final assessment of the health of the economy but it may take months before the determination.
Initial jobless claims totaled 256,000 for the week ended July 23, a fall of 5,000 from the upwardly revised data for the previous week, according to the report released by the Labor Department.
The S&P 500 index rose 1.2% to 4,072.43 and the Nasdaq Composite index increased 1.1% to 11,162.59.
Futures of crude oil price decreased 17 cents to $97.09 a barrel and natural gas fell 33 cents to $8.22 a thermal unit.
The yield on 10-year Treasury notes declined to 2.66% on the hopes that the Fed will limit the future rate hike and avoid dipping the economy into a full blown recession.
Stocks dipped briefly in the morning after the release of weaker than expected GDP data. and failed to build on the 2% advance in the previous session following the 0.75 percentage point rate hike by the Federal Reserve.
Benchmark indexes turned around by 11:00 a.m. ET and continued to climb higher supported by the sentiment that the weak economy may nudge the Fed in increasing rates at a slower pace of 50 basis points.
Latest earnings results also supported the positive sentiment and tech stocks led the charge again.
Spirit Airlines rose 5.6% to $25.66 after the discount carrier canceled its merger plan with Frontier Group and agreed to be acquired by JetBlue after protracted negotiations.
The proposed $3.8 billion merger, which still requires a clearance by the U.S. Department of Justice, will create the fifth-largest U.S. airline after a fierce battle between Frontier and JetBlue.
Frontier Group soared 20.5% to $13.58 and JetBlue declined 0.4% to $8.37.
Southwest Airlines declined 6.4% to $38.15 after the discount carrier guided a challenging business environment and predicted higher operating costs.
The company also reported total operating revenues increased 67.8% to $6.7 billion and net income soared 118% to $760 million from a year ago.
Diluted earnings per share rose to $1.20 from 57 cents a year ago.
Stanley Black & Decker, Inc plunged 16.1% to $98.58 after the toolmaker lowered its full-year outlook and said the demand softened towards the end of the quarter.
Metal Platforms, Inc declined 5.2% to $160.72 after the parent of Facebook and Instagram said June quarter revenues declined 1% to $28.8 billion on digital advertising slowdown.
Net income in the period fell 36% to $6.7 billion from $10.4 billion a year ago.
Diluted earnings per share fell 32% to $2.46 from $3.61 a year ago.
Teladoc Health Inc plunged 17.6% to $35.60 after the online healthcare platform provider said June quarter revenues rose 18% to $592 million.
Net income plunged to $3.1 billion from $133.8 million a year ago after the company took a one-time goodwill charge of $3 billion and increased total charge in the six-month period to $9.6 billion.
Average revenue per U.S. paid member increased to $2.60 in the second quarter from $2.31 a year ago.
After the close, Amazon surged 12% to $137 after the online retailer reported a loss but guided higher-than-expected third quarter revenues.
Revenues in the second quarter rose 7% to $121.23 billion.
In the second quarter, Amazon reported net loss of $2.0 billion or 20 cents a diluted share compared to $7.8 billion or 76 cents a diluted share a year ago.
Second quarter 2022 net loss includes a pre-tax valuation loss of $3.9 billion from its investment in Rivian Automotive, Inc.
The online retailer guided third quarter revenues between $125 billion and $130 billion, an increase between 13% and 17% from a year ago.
Apple Inc jumped 3.2% to $162.34 in trading after the regular trading hours after the company reported June quarter revenues increased 2% to $83 billion.
Net income in the fiscal 2022 third quarter declined to $19.4 billion or $1.20 a diluted share from $21.7 billion or $1.331 a diluted share a year ago.
- Scott Peters
- 28 Jul, 2022
- New York City
Virtual mental healthcare services provider Teladoc reported another quarter with a large write down of its recent acquisition and lowered its annual outlook.
Teladoc Health Inc plunged 23.5% to $33.01 after the online healthcare platform operator said June quarter revenues rose 18% to $592 million.
Net income plunged to $3.1 billion from $133.8 million a year ago after the company took a one-time goodwill charge of $3 billion and increased total charge in the six-month period to $9.6 billion.
Teladoc's net loss adjusted for impairment charge would be approximately $102 million.
Net loss includes a sizable goodwill impairment charge of $3.0 billion linked to its $18.5 billion acquisition of Livongo in October 2020, the digital chronic condition management company.
Two years ago at the time of acquisition, Teladoc highlighted its focus on creating one app for primary care, chronic care, and other virtual care services.
In early 2020, Teladoc acquired InTouch Health for $600 million, a provider of enterprise telehealth solutions for hospitals and health systems.
In the second quarter, Teladoc's access fee revenues rose 20% to $518.7 million and visit fee revenues increased 7% to $66.7 million.
Average revenue per U.S. paid member increased to $2.60 in the second quarter from $2.31 a year ago.
U.S. paid membership increased 9% to 56.6 million from 52.0 million a year ago and U.S. fee only access visits increased 9% to 24.0 million from 22.0 million.
In the first-half of 2022, revenues increased 21% to $1.1 billion, access fees revenues increased 20% to $519 million, and visit fees rose 7% to $67 million.
Teladoc continues to face higher advertising costs in reaching patients with mental health care needs and sales cycles are getting longer in chronic condition market, said chief executive Jason Gorevic to analysts during the conference call.
Outlook and Guidance
Teladoc reiterated its third quarter and full-year outlook but said results are expected to be towards the lower end of those ranges.
For the third quarter, revenues are anticipated between $600 million and $620 million and net loss per share between 85 cents and 60 cents.
Total U.S. paid membership to range between 55.5 million and 56.5 million, fee only access visits about 24 million and total visits between 4.8 million and 5.0 million.
For the full-year 2022, Teladoc estimates revenues between $2.4 billon and $2.5 billion and net loss per share between $61.0 and $62.0, and total visits between 18.8 million and 19.3 million.
Stock & Performance
Teladoc stock has lost about 63% of its value this year and dropped more than 91% from its peak in February 2021.
Teladoc priced its initial public offering on July 1, 2015 at $19 a share and raised $157 million, according to the data compiled by Ticker.com
- Brian Turner
- 28 Jul, 2022
- New York City
Spirit Airlines rose 3.8% to $25.22 after the discount airline canceled its plan to merge with Frontier Air and agreed to be acquired by JetBlue after protracted negotiations.
The boards of directors of both airlines approved the merger agreement under which JetBlue will acquire Spirit for $33.50 a share in cash, including a prepayment of $2.50 per share in cash payable upon Spirit stockholders
- Barry Adams
- 28 Jul, 2022
- New York City
Stocks on Wall Street rested after the U.S. economy shrank for the second quarter in a row.
Seasonally adjusted GDP declined at a slower pace of 0.9% in the second quarter following the 1.6% fall in the first quarter, the Bureau of Economic Analysis reported Thursday.
The S&P 500 index rose 0.3% to 4,034.44 and the Nasdaq Composite index gained 0.06% to 12,037.61.
Futures of crude oil price increased 54 cents to $97.80 a barrel and natural gas was nearly unchanged at $8.55 a thermal unit.
Stocks traded volatile after benchmark indexes soared more than 2% in the previous session following the 0.75 percentage point rate hike by the Federal Reserve.
Best Buy Co increased 1.7% to $75.78 after the electronics retailer lowered its comparable sales outlook for the fiscal year 2023 second quarter ending in July to decline 13% and revenues are expected to rise 7.5% from two years ago.
Comparable sales in the second quarter 2022 rose 19.6% as sales were supported by pandemic assistance.
The retailer guided fiscal year 2023 comparable sales to decline 11%, revised from the previous estimate of a decline between 3% and 6%.
Etsy Inc increased 9.8% to $104.81 after the e-commerce marketplace operator reported higher-than-expected sales and earnings.
Consolidated revenues increased 10.6% to $585.1 million, net income declined 25.6% to $73.1 million and diluted earnings per share fell to $0.51 from 61 cents a year ago.
The online marketplace operator said active sellers surged 41.5% to 7.4 million and active buyers increased 3.4% to 93.9 million in the quarter.
Gross market sales volume on the platform declined 0.4% to $3.0 billion.
Metal Platforms, Inc declined 7.9% to $156.12 after the parent of Facebook and Instagram said June quarter revenues declined 1% to $28.8 billion on digital advertising slowdown.
Net income in the period fell 36% to $6.7 billion from $10.4 billion a year ago.
Diluted earnings per share fell 32% to $2.46 from $3.61 a year ago.
Spirit Airlines rose 3.8% to $25.22 after the discount airline canceled its plan to merge with Frontier Air and agreed to be acquired by JetBlue after protracted negotiations.
The proposed $3.8 billion merger, which still requires a clearance with the U.S. Department of Justice, will create the fifth-largest U.S. airline after a fierce battle between Frontier and JetBlue.
Frontier Group soared 8.9% to $12.26 and JetBlue declined 2.7% to $8.17.
Southwest Airlines declined 8.7% to $37.20 after the discount carrier guided a challenging business environment and predicted higher operating costs.
The company also reported total operating revenues increased 67.8% to $6.7 billion and net income soared 118% to $760 million from a year ago.
Diluted earnings per share rose to $1.20 from 57 cents a year ago.
Stanley Black & Decker, Inc plunged 12.4% to $102.81 after the toolmaker lowered its full-year outlook and said the demand softened towards the end of the quarter.
Teladoc Health Inc plunged 23.5% to $33.01 after the online healthcare platform provider said June quarter revenues rose 18% to $592 million.
Net income plunged to $3.1 billion from $133.8 million a year ago after the company took a one-time goodwill charge of $3 billion and increased total charge in the six-month period to $9.6 billion.
Average revenue per U.S. paid member increased to $2.60 in the second quarter from $2.31 a year ago.
- Barry Adams
- 28 Jul, 2022
- New York City
Stocks on Wall Street rested after the U.S. economy shrank for the second quarter in a row.
Seasonally adjusted GDP declined at a slower pace of 0.9% in the second quarter following the 1.6% fall in the first quarter, the Bureau of Economic Analysis reported Thursday.
Weak private investments and lower investment in inventories and falling government spending drove the pace of the decline.
Higher exports helped but the falling real personal expenditure also dragged the economic activities in the quarter.
On Wall Street most investors regard two consecutive quarterly economic growth declines as the start of the recession.
The National Bureau of Economic Research's view on the economy is widely accepted as the final assessment of the health of the economy and the organization's views are generally released months later.
Initial jobless claims totaled 256,000 for the week ended July 23, a fall of 5,000 from the upwardly revised data for the previous week, according to the report released by the Labor Department.
The S&P 500 index declined 0.4% to 4,009.74 and the Nasdaq Composite index dropped 0.6% to 11,961.26.
Futures of crude oil price increased 54 cents to $97.80 a barrel and natural gas was nearly unchanged at $8.55 a thermal unit.
Stocks edged lower after benchmark indexes soared more than 2% in the previous session following the 0.75 percentage point rate hike by the Federal Reserve.
Spirit Airlines rose 3.8% to $25.22 after the discount carrier canceled its merger plan with Frontier Group and agreed to be acquired by JetBlue after protracted negotiations.
The proposed $3.8 billion merger, which still requires a clearance by the U.S. Department of Justice, will create the fifth-largest U.S. airline after a fierce battle between Frontier and JetBlue.
Frontier Group soared 8.9% to $12.26 and JetBlue declined 2.7% to $8.17.
Southwest Airlines declined 8.7% to $37.20 after the discount carrier guided a challenging business environment and predicted higher operating costs.
The company also reported total operating revenues increased 67.8% to $6.7 billion and net income soared 118% to $760 million from a year ago.
Diluted earnings per share rose to $1.20 from 57 cents a year ago.
Stanley Black & Decker, Inc plunged 12.4% to $102.81 after the toolmaker lowered its full-year outlook and said the demand softened towards the end of the quarter.
Metal Platforms, Inc declined 7.9% to $156.12 after the parent of Facebook and Instagram said June quarter revenues declined 1% to $28.8 billion on digital advertising slowdown.
Net income in the period fell 36% to $6.7 billion from $10.4 billion a year ago.
Diluted earnings per share fell 32% to $2.46 from $3.61 a year ago.
Teladoc Health Inc plunged 23.5% to $33.01 after the online healthcare platform provider said June quarter revenues rose 18% to $592 million.
Net income plunged to $3.1 billion from $133.8 million a year ago after the company took a one-time goodwill charge of $3 billion and increased total charge in the six-month period to $9.6 billion.
Average revenue per U.S. paid member increased to $2.60 in the second quarter from $2.31 a year ago.
- Brian Turner
- 28 Jul, 2022
- New York City
The U.S. economy declined for the second quarter in a row largely on the account of fall in investments and weak government spending.
The GDP shrank at an annual rate of 0.9% following the 1.6% decline in the first quarter, the Bureau of Economic Analysis said Thursday.
Real GDP decreased less in the second quarter than in the first quarter reflecting an upturn in exports and a smaller decrease in federal government spending that were partly offset by larger declines in private inventory investment and state and local government spending, a slowdown in PCE, and downturns in nonresidential fixed investment and residential fixed investment.
Imports decelerated.
The decrease in private inventory investment was led by a decrease in retail trade driven by the weakness in general merchandise stores and lower level of activities at automobile dealers.
The decrease in residential fixed investment was led by a decrease in brokers' commissions as the home unit sales declined.
The decrease in federal government spending reflected a decrease in non-defense spending that was partly offset by an increase in defense spending.
The decrease in non-defense spending reflected the sale of crude oil from the Strategic Petroleum Reserve, which results in a corresponding decrease in consumption expenditures.
Because the oil sold by the government enters private inventories, there is no direct net effect on GDP.
The decrease in state and local government spending was led by a decrease in investment in structures.
The decrease in nonresidential fixed investment reflected decreases in structures and equipment that were mostly offset by an increase in intellectual property products.
The increase in imports reflected an increase in services (led by travel).
The increase in exports was driven by higher exports of industrial supplies and materials and services led by the rebound of international tourist arrivals.
The increase in PCE or personal consumption expenditure reflected an increase in services led by food services and accommodations as well as health care, partly offset by a decrease in goods led by food and beverages consumption.
- Barry Adams
- 27 Jul, 2022
- New York City
Stocks rallied on Wall Street after the Federal Reserve increased the key lending rate by a larger-than-expected amount.
The 75 basis points increase was welcomed by investors and reaffirmed the Fed's commitment in fighting inflation.
After the increase, the federal funds rate have a target rate range between 2.25% and 2.5%.
"The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run" and "anticipates that ongoing increases in the target range will be appropriate.
In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities," noted the accompanying statement released by the Federal Reserve.
Investors are anticipating a better read on the second quarter GDP before the market opens on Wednesday after the first quarter GDP declined at an annual rate of 1.6%.
The S&P 500 index increased 2.6% to 4,023.61 and the Nasdaq Composite index gained 4.1% to 12,032.42.
Futures of crude oil rose $3.11 to $98.11 a barrel and natural gas fell 32 cents to $8.66 a thermal unit but still hovered near the price last seen in 2008.
The yield on 10-year Treasury notes declined to 2.78% and on2-year notes fell to 2.98%.
The broad rally lifted stocks across all sectors led by a surge in tech stocks.
Investors also reacted to the latest batch of earnings releases.
Microsoft gained 6.7% to $268.40 after the company exceeded lowered earnings expectations.
Microsoft said quarterly net income growth slowed after cloud business growth slowed and video game business shrank.
June quarter sales increased 12% to $51.9 billion and rose in constant currencies 16% from a year ago.
Net income jumped 2% or 7% in constant currencies to $16.7 billion from a year ago.
Diluted earnings per share rose 3% to $2.23 from $2.17 a year ago.
For the full-year net revenues rose 18% to $198.3 billion, net income surged 19% to $72.7 billion and earnings per share rose 20% to $9.65.
Alphabet Inc jumped 7.7% to $113.05 after the parent of Google reported a decline in earnings but were ahead of the expectations set by some investors.
Alphabet reported its slowest quarterly revenues increase in two years as rising dollar and weakening economic backdrop impacted advertising environment.
Alphabet Inc said second quarter revenues increased 13% or 16% in constant currencies to $69.7 billion.
Net income fell to $16.0 billion from $18.5 billion and diluted earnings per share fell to $1.21 from $1.36 a year ago.
Chipotle Mexican Grill, Inc soared 12.7% $1.510.08 after the operator of fast food restaurants was able to increase customer price faster than the increase in food prices and wage costs.
PayPal Holdings Inc increased 12.2% to $86.47 after the activist investor Elliott Management acquired a stake in the payment processor. The news was first reported by the Wall Street Journal.
Shopify Inc increased 11.7% to $35.24 despite the e-commerce platform operator reporting wider-than-expected loss and said losses in the current quarter are expected to rise.
Boeing Co declined 0.11% to $156.09 after the aerospace and defense contractor reported lower-than-expected revenues and wider-than-expected quarterly loss.
However, the company did not revise its production schedule for 737 MAX jets.
Hilton Hotels rose 7.5% to $129.25 after the hotel operator lifted its annual outlook citing a rebound in travel demand. The company also delivered better-than-expected quarterly results.
McDonald's Corp gained 0.7% to $258.89 after the fast food chain reported stronger-than-expected earnings.
Global comparable store sales increased 9.7% driven by the U.S. sales increase of 3.7% and systemwide sales increased 4.0% or 10.0% in constant currencies.
Consolidated revenues declined 3% to $5.7 billion and net income plunged 46% to $1.2 billion and diluted earnings per share fell by the same amount to $1.60 from a year ago.
- Scott Peters
- 27 Jul, 2022
- New York City
United Parcel Services increased 44 cents to $181.90 after the company reported June quarter sales increased 5.7% from a year ago to $24.8 billion.
Net income in the quarter increased 6.5% to $2.9 billion from $2.7 billion a year ago and diluted earnings per share increased to $3.25 from $3.05.
Supply chain revenues, which boomed during the pandemic era, rose only 0.7% to $4.2 billion.
Average revenues per package increased 2.3% to $7.61 and total international package revenues including export revenues rose14.8% lifting the consolidated average revenues increase to 11.9% to $13.72.
The price increases drove most of the revenue gains in the quarter.
U.S. Domestic Parcel Volume Falls
U.S. domestic package revenues increased 7.3% to $15.5 billion and international package revenues increased 5.3% to 5.1%.
Average daily parcel volume declined 9.2% driven by 13.4% fall in the U.S. and 4.4% in exports volumes.
U.S. domestic package revenue increase was driven by 11.9% increase in revenues per piece with fuel surcharge of 400 basis points increase and the remainder 790 basis points increase was driven by base rate increase, fuel prices, and mix improvements.
Average daily parcel volume in the U.S. declined 4.0% to 19.7 million from 20.5 million a year ago.
Dividends and Stock Repurchase
UPS said it plans to return to shareholders $5.2 billion in dividends and the company lifted its stock repurchase limit to $3.0 billion in 2022.
Outlook
The company reaffirmed its full-year revenues estimate of $102 billion and capital expenditure of 5.4% revenues or $5.5 billion.
UPS estimated full-year 2022 domestic revenues to increase 5.5% and international revenues to grow in low-single digits.
Supply chain revenues in the full-year are estimated to be near $9.0 billion and consolidated operating margin of 13.6%.
Free cash flow in 2022 is estimated around $9.0 billion.
- Scott Peters
- 27 Jul, 2022
- New York City
Visa Inc declined 2.2% to $207.67 after the payment processing network operator said June quarter revenues increased 19% to $7.3 billion.
Net income in the quarter increased 32% to $3.4 billion and diluted earnings per share rose 36% to $1.60 from $1.18 a year ago.
Payments volume in the quarter increased 12% in constant dollars from a year ago.
Cross-border volume excluding transactions within Europe surged 48% in constant dollars.
Total cross-border volume, including Europe, increased 40% in the quarter.
Total processed transactions in the quarter, which represent transactions processed by Visa, were 49.3 billion, a 16% increase from a year ago.
During the quarter, Visa repurchased 12.2 million shares of class A common stock at an average price of $202.16 a share for $2.5 billion.