STOCK MARKET NEWS: Apple, Amazon, Starbucks report earnings after Meta powers big day on Wall Street

The Nasdaq Composite moved closer to exiting the bear market it entered in March of 2022 and is up nearly 20% from the lows reached in December. Shares of Meta, which rose 23%, were among today’s big drivers. 

A new bull market for the Nasdaq Composite will begin at when it crosses 12,255.9451.

A U.S. judge on Wednesday dismissed a proposed class action lawsuit by Coinbase Global Inc customers who accused the cryptocurrency exchange of selling unregistered securities and failing to register as a broker-dealer.

U.S. District Judge Paul Engelmayer in Manhattan said customers who transacted on the Coinbase and Coinbase Pro trading platforms could not show that the company sold or held title to the 79 tokens, a form of digital asset, they traded.

Customers said that unlike platforms that match buyers and sellers, Coinbase acted as an “intermediary,” making it the “actual seller” of the tokens.

They said the setup allowed Coinbase to collect transaction fees, while bypassing disclosure rules meant to protect investors in traditional securities.

The judge said Coinbase had no direct role in the transactions, despite having allegedly promoted tokens by describing their “purported value proposition” and participating in “airdrops” of free tokens to boost trading volume.

Lawyers for the customers did not respond to requests for comment.

Amazon.com Inc beat Wall Street estimates for quarterly sales on Thursday, as the retailer’s marketing blitz during the holiday period helped attract shoppers.

Amazon tapped into its huge base of Prime subscribers during the crucial holiday season with attractive early offers and discounts that helped drive business on its e-commerce platform, despite economic turbulence.

The world’s biggest online retailer said it was expecting net sales of between $121 billion and $126 billion for the first quarter. Analysts were expecting $125.11 billion, according to IBES data from Refinitiv.

Net sales were $149.20 billion in the fourth quarter, compared with analysts’ expectations of $145.42 billion, according to IBES data from Refinitiv.

Kohl’s Corp has appointed activist investor Tom Kingsbury as CEO, effective Feb. 2, 2023. Kingsbury has served as Interim CEO since Dec. 2.

“Tom’s exceptional track record growing retail businesses and his deep knowledge of Kohl’s makes him the right choice for Kohl’s next CEO. Since joining the Board, Tom has added valuable insight and perspective, and as Interim CEO, he has demonstrated strong leadership and made a meaningful and positive impact on the organization,” said Board Chair Peter Boneparth. “The Board has full confidence in Tom’s ability to drive the business forward, focusing on accelerating sales and profitability, and we look forward to our continued work together.”

Kingsbury brings over 40 years of retail industry experience serving in executive leadership and board roles at Kohl’s, Burlington Stores, and The May Department Stores Company.

He led Burlington Stores as President and CEO from 2008 to 2019 and served on the Burlington Stores Board of Directors from 2008 to 2020, including as Chair from 2014 to 2019 and as Executive Chairman from 2019 to 2020.

Clorox Co on Thursday raised its forecast for annual adjusted profit after reporting a surprise rise in sales, as higher prices helped the bleach maker offset a slowdown in demand for its cleaning products and disinfectants.

The multiple rounds of price increases that Clorox rolled out across a breadth of its products over the last two years helped the company report a 1% increase in second-quarter net sales at $1.72 billion from a year ago.

Analysts on average were expecting a near 2% drop to $1.66 billion, according to Refinitiv IBES data.

Even as Clorox grappled with higher raw material costs and manufacturing expenses, the price increases helped its gross margin expand 320 basis points to 36.2% in the three months ended Dec. 31.

Oakland, California-based Clorox said it now expects adjusted earnings between $4.05 and $4.30 per share for fiscal 2023, compared with its previous outlook range of $3.85 to $4.22 per share.

Clorox also tightened its forecast for full-year sales to between a 2% drop and a 1% rise, compared to a 4% decrease to a 2% increase estimated previously.

World Wrestling Entertainment Inc. (WWE) on Thursday reported earnings of $38.8 million in its fourth quarter.

The Stamford, Connecticut-based company said it had profit of 45 cents per share. Earnings, adjusted for non-recurring costs, were 52 cents per share.

The producer of professional wrestling events and television shows posted revenue of $325.3 million in the period.

For the year, the company reported profit of $195.6 million, or $2.29 per share. Revenue was reported as $1.29 billion.

Apple Inc on Thursday reported sales and profits that missed Wall Street expectations driven by weak iPhone sales after COVID lockdowns in China disrupted production of the company’s biggest seller.

Apple sales fell 5% to $117.2 billion and were down in every part of the world in the quarter. Sales from each product category dropped, except for gains in services and iPads. Earnings per share were $1.88, Apple’s first miss of Wall Street’s profits expectations since 2016.

Analysts had expected sales of $121.1 billion and profits of $1.94 per share, according to IBES data from Refinitiv. 

Apple Chief Executive Tim Cook told Reuters that the production disruptions that plagued Apple’s key quarter were now over.

Sales of the company’s Mac computers, which had boomed during the wave of working from home during the pandemic, declined 29% year over year to $7.7 billion, compared with expectations of $9.6 billion, according to Refinitiv data.

Sales of the iPad, which also saw a pandemic-related boost, grew 30% to $9.4 billion, compared with analyst expectations of $7.8 billion, according to Refinitiv data. The wearable and accessories segment, which includes the Apple Watch and AirPods, fell 8% to $13.5 billion compared with analyst estimates of $15.2 billion, according to Refinitiv data.

Starbucks Corp missed Wall Street expectations for quarterly comparable sales on Thursday, as persistent weakness in the coffee chain’s China business offset strong sales in the North American market.

Shares of the Seattle, Washington-based company slid about 3% to $106.34 in extended trading.

While China has largely abandoned its zero-COVID policy and began reopening in early December, customer traffic at Starbucks still remained weak owing to widespread COVID-19 outbreaks in the country.

That resulted in a 29% fall in China comparable sales for Starbucks in its first fiscal quarter ended Jan. 1, pulling total international comparable sales down 13%.

The company reported a 10% jump in comparable sales in North America, as a younger and wealthier coffee-loving crowd shrugged off inflationary pressures and continued to order coffees, cold drinks as well as food item add-ons.

Global comparable sales at Starbucks rose 5%, compared with analysts’ average estimate of a 6.75% rise, according to Refinitiv IBES data.

Starbucks reported an operating margin of 14.4% for the quarter, down from 14.6% a year earlier, pinched by heavy investments to modernize its stores through technology as well as elevated labor and raw material costs.

Qualcomm Inc forecast second-quarter revenue and profit below Wall Street estimates on Thursday, as the company grapples with weak demand for smartphones and a supply glut.

Smartphone shipments dropped 18.3% in the quarter ended Dec. 31 marking the largest ever quarterly slump, according to data from research firm IDC, as even the holiday shopping season could not revive battered consumer spending amid rising prices. Shipments hit a nine-year low at 1.21 billion units in 2022, IDC added.

The weakness in demand for lower-end phones has also begun to hit premium devices, which fetch companies like Qualcomm higher prices for their chips.

Revenue from its handset business, which makes up the largest chunk of total sales, fell 18%, compared to a 40% growth in the previous quarter.

The chipmaker expects revenue in the current quarter to be in the range of $8.7 billion to $9.5 billion, compared with analysts’ estimates of $9.55 billion, according to Refinitiv data.It expects adjusted earnings per share to be between $2.05 and $2.25, compared to analysts expectations of $2.26 per share.

Ford Motor Co F.N on Thursday reported a full-tear operating profit short of expectations.

The company’s 2022 adjusted profit of $10.4 billion was short of the company’s forecast at the end of the third quarter for $11.5 billion.

“We should have done much better last year,” Ford CEO Jim Farley said in a statement. “We left about $2 billion in profits on the table that were within our control.”

Alphabet Inc on Thursday reported lower-than-expected quarterly revenue as the Google parent’s digital ad business struggled under an economic slowdown that has choked corporate spending and triggered mass layoffs.

Shares of Alphabet, which lost roughly 40% of their value in 2022, were down about 2% in after-hours trading.

Revenue from Google advertising, which includes Search and YouTube, fell to $59.04 billion from $61.24 billion, as advertisers — the biggest contributors to Alphabet’s sales — dialed back spending to cope with persistent inflation, high interest rates and recession fears.

Big Tech peer Meta Platforms Inc had, however, impressed investors with a quarterly results announcement that featured promises to slash costs and boost offerings to capitalize better on ad dollars.

Alphabet’s net income fell to $13.62 billion, or $1.05 per share, from $20.64 billion, or $1.53 per share, a year earlier.

Revenue rose to $76.05 billion in the fourth quarter from $75.33 billion a year ago. Analysts were expecting $76.53 billion, according to IBES data from Refinitiv.

Gold, like other commodities including oil and silver, is a haven for traders
during times of economic downturn, and particularly inflation, where the strength of the U.S. dollar is weakened, and investors begin looking for material wealth.

Already, the price of the gold has reached roughly $1,932 per ounce in 2023 and is up approximately 18% the last three months.

A Kitco News’ online survey showed investors could see gold top out at a record $2,100 an ounce this year, while data compiled by the World Gold Council showed annual central bank demand more than doubled in 2022 to hit a new 55-year record high.

Often considered recession or inflation-proof, gold outpaced
the three major U.S. stock averages in 2022. The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all finished lower last year.

The average long-term U.S. mortgage rate declined for the fourth week in a row, a sign of relative stability that could potentially open the door for some prospective homebuyers to get back in the market.

Mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate fell to 6.09% from 6.13% last week. That’s the lowest level since September. The average rate a year ago was 3.55%.

The average long-term rate reached a two-decade high of 7.08% in late October and early November as the Federal Reserve continued to raise its key lending rate in a bid to cool the economy and tame inflation.

Activist investor Nelson Peltz’s hedge fund Trian Fund Management wrote to Walt Disney Co shareholders on Thursday to make the case for replacing the media and entertainment conglomerate’s board director Michael Froman.

Trian, which owns a roughly $1 billion stake in the home of Mickey Mouse, has asked Disney shareholders to drop Froman — a former U.S. Trade Representative — from the company’s 12-member board and elect Peltz instead.

Trian did not spell out in the letter why it had picked Froman to target among the Disney directors, but suggested that Peltz was more qualified to serve.

The number of Americans filing new claims for unemployment benefits dropped to a nine-month low last week as the labor market remains resilient despite higher borrowing costs and mounting fears of a recession this year.

The surprise decline in weekly jobless claims reported by the Labor Department on Thursday raised cautious optimism that the anticipated downturn will be shallow and short.

Initial claims for state unemployment benefits dropped 3,000 to a seasonally adjusted 183,000 for the week ended Jan. 28, the lowest level since April 2022. It was the third straight weekly decline in applications. Economists polled by Reuters had forecast 200,000 claims for the latest week.

Unadjusted claims slipped 872 to 224,356 last week. There were notable declines in applications in Kentucky, California and Ohio, which offset increases in Georgia and New York.

Air Products and Chemicals Inc. on Thursday reported fiscal first-quarter earnings of $572.2 million.

On a per-share basis, the Allentown, Pennsylvania-based company said it had net income of $2.57. Earnings, adjusted for non-recurring costs, came to $2.64 per share.

The results missed Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of $2.73 per share.

The seller of gases for industrial, medical and other uses posted revenue of $3.17 billion in the period, also falling short of Street forecasts. Five analysts surveyed by Zacks expected $3.29 billion.

For the current quarter ending in March, Air Products and Chemicals expects its per-share earnings to range from $2.58 to $2.70. Analysts surveyed by Zacks had forecast adjusted earnings per share of $2.77.

The company expects full-year earnings in the range of $11.20 to $11.50 per share.

Air Products and Chemicals shares have increased 3% since the beginning of the year, while the S&P’s 500 index has climbed slightly more than 7%. The stock has increased 12% in the last 12 months.

 Align Technology Inc. on Wednesday reported fourth-quarter earnings of $41.8 million.

The Tempe, Arizona-based company said it had net income of 54 cents per share. Earnings, adjusted for pretax expenses and stock option expense, came to $1.73 per share.

The results surpassed Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of $1.52 per share.

The maker of the Invisalign tooth-straightening system posted revenue of $901.5 million in the period, which also topped Street forecasts. Six analysts surveyed by Zacks expected $889.3 million.

For the year, the company reported profit of $361.6 million, or $4.61 per share. Revenue was reported as $3.73 billion.

Align Technology shares have increased 34% since the beginning of the year. In the final minutes of trading on Wednesday, shares hit $282.53, a drop of 44% in the last 12 months.

Pinterest Inc is laying off about 150 employees, or less than 5% of its total workforce, Bloomberg News reported on Wednesday, joining a flurry of technology companies that are firing workers to cut costs.

The digital-search company that lets users create online pinboards informed the impacted employees on Wednesday, the report said, citing a person familiar with the company.

The job cuts came from teams across the San Francisco-based company, though not all were affected to the same degree.

“We’re making organizational changes to further set us up to deliver against our company priorities and our long-term strategy,” a company spokesperson told Reuters, confirming job cuts. The official, however, declined to confirm the number of job cuts.

Pinterest will support all impacted employees with separation packages, benefits and other services during the transition, the spokesperson added.

W.W. Grainger Inc. on Thursday reported fourth-quarter profit of $384 million.

On a per-share basis, the Lake Forest, Illinois-based company said it had net income of $7.54. Earnings, adjusted for non-recurring gains, came to $7.14 per share.

The results exceeded Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of $6.97 per share.

The seller of maintenance and other supplies posted revenue of $3.8 billion in the period, also topping Street forecasts. Eight analysts surveyed by Zacks expected $3.76 billion.

For the year, the company reported profit of $1.55 billion, or $30.06 per share. Revenue was reported as $15.23 billion.

The Bank of England raised interest rates for the 10th time in a row on Thursday but dropped its pledge to keep increasing them “forcefully” if needed and said inflation had probably peaked.

Softening their forecasts of recession this year, the BoE’s nine interest rate-setters voted 7-2 to increase Bank Rate to 4.0% – its highest since 2008 – from 3.5%. The move had been expected by most investors and economists.

The announcement comes a day after the U.S. Federal Reserve slowed the pace of its rate hikes with a smaller quarter-point move, but said it expected further increases would be needed.

The European Central Bank looks set to raise rates by a half a percentage point later on Thursday to 2.5%.The BoE — which is trying to smother the risks from Britain’s 10% inflation rate without deepening the expected recession — said its run of rate hikes going back to December 2021 were likely to have an increasing impact on the economy.

That should help to bring inflation down to about 4% by the end of this year, it said. Previously the BoE had forecast 2023 inflation at around 5%.

Eli Lilly and Co missed Wall Street estimates for quarterly revenue, hurt by slowing demand for its older diabetes drugs and COVID-19 treatment, but forecast better-than-expected full-year profit.

Sales of Lilly’s older treatments such as diabetes drugs Humalog and Lispro as well as cancer therapy Alimta have come under pressure due to price cuts and generic competition.

Sales of its diabetes treatment Mounjaro also fell short of analysts’ expectations, which could raise investor concerns as the drug is expected to be among Lilly’s growth drivers this decade.

Investor focus is also on how Lilly will switch patients who are on the free drug access program for Mounjaro to a paid program in the latter half of 2023.Mounjaro sales were $279.2 million for the quarter, below estimates of $319 million, according to an average of five analysts polled by Refinitiv.

Sales of its COVID-19 drug bebtelovimab were all but wiped out, coming in about 96% lower than a year earlier at $38 million for the quarter, after the U.S. health regulator pulled authorization on concerns the antibody would not neutralize the BQ.1 and BQ.1.1 Omicron subvariants.

Sales of its blockbuster diabetes drug Trulicity were $1.94 billion, falling short of analysts’ expectations of $2.16 billion.

Total quarterly revenue was $7.30 billion, marginally below estimates of $7.33 billion. Excluding items, the U.S. drugmaker posted a better-than-expected $2.09 per share profit for the fourth quarter.

The company forecast 2023 adjusted full-year earnings between $8.35 and $8.55 per share, above analysts’ expectations of $8.28 per share, on the back of uncertainty around whether certain tax regulations would be deferred this year.

ConocoPhillips said on Thursday profit more than doubled to $18.7 billion in 2022, the highest since the company spun-off its refining business in 2012, as the oil producer benefited from higher prices on tight supplies and robust demand.

Shares, however, fell on a profit miss and lower oil prices.

On an adjusted basis, the company posted a profit of $2.71 per share, missing expectations of $2.81, as per Refinitv data.

Total average realized price rose 8% to $71.05 per barrel of oil equivalent in the fourth quarter, ConocoPhillips said.

Houston-based ConocoPhillips also declared a variable dividend of 60 cents, and said it plans to return $11 billion to shareholders in 2023.

ConocoPhillips expects capital expenditure to be between $10.7 billion and $11.3 billion this year that includes spending on its Willow oil and gas drilling project in Alaska, which received a scaled-back support from the Biden administration on Wednesday.

Production was 1.758 million barrels of oil equivalent per day (boed) for the last three months of 2022, an increase of 150,000 boed from the same period a year ago.

Current-quarter production is expected to be between 1.72 million and 1.76 million boepd.

Industrial conglomerate Honeywell International Inc on Thursday posted a 28.6% fall in fourth-quarter profit and missed quarterly revenue estimates, hurt by supply chain snags and labor shortages.

A shortage of crucial semiconductor chips and higher prices of raw materials have hit aerospace and defense companies’ ability to manufacture products over the past year, leading to delays in output.

Still, the company forecast full-year sales between $36 billion and $37 billion, in line with analysts’s average estimate, according to Refinitiv data.

The Charlotte, North Carolina-based company’s safety and productivity solutions unit, which makes masks, also struggled over the past year, hurt by easing travel restrictions between countries.

Net earnings fell to $1.02 billion, or $1.51 per share, in the quarter ended Dec. 31, from $1.43 billion, or $2.05 per share, a year earlier.

Overall quarterly net sales rose about 6% to $9.19 billion, but missed analysts’ average estimate of $9.25 billion.

The major U.S. benchmarks are mixing to start the regular session as the Dow struggles to stay above the redline and the S&P and Nasdaq rally.

The Dow Jones Industrial Average is down roughly 65 points, or 0.19%, while the S&P 500 and the Nasdaq Composite are up approximately 0.94% and 2.23%, respectively.

Tech shares are helping lift the Nasdaq again on Thursday as shares of Meta, Apple, Alphabet and Amazon all trading at least 2% into the green, with Meta rising almost 20% in early trading.

Meanwhile, West Texas Intermediate slipped roughly 0.21% to $76.25 a barrel as gold moved roughly 0.93% higher to $1,960.80 an ounce. 

U.S. equity futures traded mostly higher Thursday morning following a better-than-expected earnings report from Meta, the parent of Facebook.

The major futures indexes suggest a gain of 0.5% on the S&P 500 and a rise of 1.4% on the Nasdaq.

Oil prices rebounded on Thursday after tumbling in the previous session.

West Texas Intermediate (WTI) U.S. crude futures traded around $76.00 a barrel.

Brent crude futures traded around $82.00 a barrel.

Meta Platforms shares are soaring nearly 20% in premarket trading after forecasting first-quarter revenue above Wall Street estimates, signaling a rebound in demand for digital ads after months of weak sales.

The Federal Reserve said the U.S. economy is moving toward lower inflation but more interest rate hikes are planned.

Thursday’s economic reports will be jobless claims, productivity and factory orders.

In Asia, the Nikkei 225 in Tokyo added 0.2%, the Hang Seng in Hong Kong fell 0.5% and China’s Shanghai Composite Index was little changed.

Wall Street’s benchmark S&P 500 index closed 1% higher after the Fed raised its key lending rate by 0.25 percentage points, smaller than previous hikes. The Dow Jones Industrial Average gained less than 0.1% to 34,092.96. The Nasdaq composite jumped 2% to 11,816.32.

Meta Platforms shares soaring 20% in premarket trading after forecasting first-quarter revenue above Wall Street estimates, signaling a rebound in demand for digital ads after months of weak sales.

The parent of Instagram and Facebook forecast revenue between $26 billion and $28.5 billion, compared with analysts’ average estimates of $27.14 billion, according to IBES data from Refinitiv.

The digital ad giant faced a brutal 2022 as companies cut back on marketing spend due to economic worries, while rivals like TikTok captured younger users and Apple’s privacy updates continued to challenge the business of placing targeted ads.

Meta’s forecast is an indication that the ad market may be recovering as companies increase their marketing budgets, after a long pause due to macroeconomic uncertainties.

Net income for the fourth quarter ended Dec 31, however, fell to $4.65 billion, or $1.76 per share, in the quarter ended Dec. 31, compared with $10.29 billion, or $3.67 per share, a year earlier, largely due to a $4.2 billion charge related to cost-cutting moves such as layoffs.

Posted by Reuters

Before the bell earnings are due
from health care companies including Cardinal Health, Merck, Bristol-Myers, Eli Lilly, Becton Dickinson, and Quest Diagnostics. 

Also watch for numbers from oil and gas giant ConocoPhillips, industrial conglomerate Honeywell International, cosmetics giant Estee Lauder, chocolate manufacturer Hershey, and satellite radio company Sirius XM. 

In the afternoon all eyes will be on Dow member Apple, online retailing giant Amazon, and Google parent Alphabet when the three tech titans report earnings after the closing bell. 

The stocks all rose Wednesday with the rest of the technology sector after some positive comments on inflation by Fed chief Powell during the post-FOMC meeting press conference, which boosted hopes that the Fed will pause after one more rate hike in March.

Shell reported a a record $40 billion profit in 2022 on Thursday.

The British company’s record earnings, which more than doubled from a year earlier, mirror those reported by U.S. rivals earlier this week and are certain to intensify pressure on governments to further raise taxes on the sector.

Shell also posted record fourth-quarter profit of $9.8 billion on the back of a strong recovery in earnings from liquefied natural gas (LNG) trading, beating analyst forecasts for an $8 billion profit.

Annual profit reached $39.9 billion, more than doubling from a year earlier and far exceeding the previous record of $31 billion in 2008.

Shell boosted its dividend by 15% in the fourth quarter, as previously announced, for the fifth increase since delivering a more than 60% cut in the wake of the 2020 COVID-19 pandemic.

The company also announced a new $4 billion share buyback programme over the next three months.

Reuters contributed to this post.

Oil prices rebounded on Thursday after tumbling in the previous session as a weaker dollar brought back some appetite for risk assets and the OPEC+ decision to roll over an output cut helped ease oversupply concerns.

West Texas Intermediate (WTI) U.S. crude futures traded around $76.00 a barrel.

Brent crude futures traded around $82.00 a barrel.

Both benchmarks plunged more than 3% after U.S. government data showed big builds in crude and oil products inventory.

The Federal Reserve raised its target interest rate by a quarter of a percentage point on Wednesday, yet continued to promise “ongoing increases” in borrowing costs as part of its ongoing battle against inflation.

The U.S. dollar index dived to a fresh nine-month low on Thursday in reaction to the softer rate hike bets. 

Reuters contributed to this post.

The price of gasoline ticked lower on Thursday.

The nationwide price for a gallon of gasoline declined to $3.498, according to AAA.

The average price of a gallon of gasoline on Wednesday was $3.501.

A year ago, the price for a gallon of regular gasoline was $3.399.

One week ago, a gallon of gasoline cost $3.502.  A month ago, that same gallon of gasoline cost $3.216.

Gas hit an all-time high of $5.016 on June 14.

Diesel remains below $5.00 per gallon at $4.675, but that is still a far from the $3.744 of a year ago.

Bitcoin was trading around $23,000, after gaining in three of the last four days.

For the week, Bitcoin has gained 2.5%.

The cryptocurrency has gained 43% year-to-date, but is down over 35% from 52 weeks ago.

Ethereum was trading around $1,600, after gaining 1.6% in the past week.

Dogecoin was trading at 9 cents, after adding more than 8% in the past week.