Market Update
U.S. Stock Movers: Alphabet, Boeing, CoStar Group, HCA Healthcare, Microsoft, Moody's, Snap Inc
Scott Peters
25 Oct, 2023
New York City
Stocks faced selling pressure after Treasury yields rebounded, and tech stocks fell after the release of Google earnings.
The S&P 500 index increased 0.8% to 4,252.43, and the Nasdaq Composite rose 1.0% to 13,147.32.
The yield on 2-year Treasury notes increased to 5.09%, 10-year Treasury notes inched higher to 4.89%, and 30-year Treasury bonds edged up to 5.03%.
Google-parent Alphabet Inc. dropped 8.9% to $126.48 after the search company reported quarterly results.
Revenue in the third quarter increased 11% to $76.7 billion from $69 billion, net income jumped to $19.7 billion from $13.9 billion, and diluted earnings per share advanced to $1.55 from $1.06 a year ago.
Google cloud revenue increased to $8.4 billion from $6.9 billion, but the growth in revenue fell short of some investors expectations.
Microsoft Corp. increased 3.4% to $343.87 after the software developer reported better-than-expected quarterly results.
Revenue in the fiscal first quarter increased by 13% to $56.5 billion, net income surged by 27% to $22.3 billion, and diluted earnings per share soared to $2.99 from $2.35 a year ago.
Cloud services revenue rose 19% to $24.3 billion, office and business productivity software, including LinkedIn, rose 13% to $18.6 billion, and personal computing revenue, which includes Windows and Xbox content, inched up 3% to $13.7 billion.
Microsoft returned $9.1 billion to shareholders in the form of stock repurchases and dividends in the first quarter of fiscal 2024.
Snap Inc. jumped 4.7% to $10.15 after the online chat platform operator reported better-than-expected quarterly results.
Snapchat's parent said third-quarter revenue increased 5% to $1.19 billion from $1.12 billion, net loss increased 2% to $368 million from $359.5 million, and diluted loss per share edged up to 22 cents from 20 cents a year ago.
The company said daily active users increased by 12% to 406 million, and the board of directors approved a $500 million stock repurchase plan over the next 12 months.
Boeing Company increased 0.8% to $183.76 after the aviation company and defense contractor said quarterly losses shrank and the company said it expects to deliver fewer-than-anticipated 737 Max planes this year.
Revenue in the third quarter increased 11% to $18.1 billion from $16 billion, net loss shrank to $1.6 billion from $3.3 billion, and diluted loss per share eased to $2.70 from $5.49 a year ago.
Third quarter results were negatively impacted by defense performance and lower 737 deliveries.
In the quarter, the plane maker delivered 105 planes, 6% fewer than 112 delivered in the period a year ago.
The company confirmed a backlog of $469 billion, including over 5,001 commercial airplanes.
During the quarter, the company booked 398 net orders, including 150 737 MAX 10 airplanes for Ryanair, 50 787 airplanes for United Airlines, and 39 787 airplanes for Saudi Arabian Airlines.
HCA Healthcare Inc. fell 1.4% to $226.95, and the hospital chain operator reported mixed quarterly results.
Revenue in the third quarter increased to $16.2 billion from $14.97 billion, net income attributable to shareholders decreased to $1.08 billion from $1.13 billion, and diluted earnings per share were flat at $3.91 compared to a year ago.
Same-facility admissions increased 3.4%, emergency room visits rose 3.5%, inpatient surgeries inched up 1.6%, and outpatient surgeries edged up 0.9%.
Same facility revenue per equivalent admission advanced 3.6% from the year-ago period.
The company announced a quarterly cash dividend of 60 cents per share payable on December 28 to share shareholders on record on December 14.
The company revised its 2023 revenue guidance to between $63.5 billion and $64.5 billion from the previous range of between $63.25 billion and $64.75 billion.
HCA tightened its range for net income attributable to shareholders between $4.94 billion and $5.13 billion from the previous range between $4.90 and $5.255 billion.
HCA also narrowed its diluted earnings per share range to between $17.80 and $18.50 from the previous guidance between $17.70 and $18.90.
CoStar Group dropped 5.7% to $70.03 after the company's outlook disappointed investors.
Revenue in the third quarter increased 12% to $625 million from $557 million, net income advanced 25% to $91 million from $72 million, and diluted earnings per share rose to 22 cents from 18 cents a year ago.
The company guided fourth-quarter revenue to range between $630 million and $635 million, an increase of 10% at the midpoint of the range.
The company forecasted revenue in full-year 2023 to range between $2.445 billion and $2.45 billion.
The company expects non-GAAP net income per diluted share in a range of $1.21 to $1.22 for the full-year 2023 and between $0.31 and $0.32 in the fourth quarter based on 407 million shares.
Moody's Corp. advanced 2.8% to $314.05 after the investment information provider reported quarterly results.
Revenue in the third quarter increased 15% to $1.5 billion from $1.27 billion, net income advanced to $389 million from $303 million, and diluted earnings per share rose to $2.11 from $1.65 a year ago.
The board of directors declared a quarterly cash dividend of 77 cents per share payable on December 15 to shareholders on record on November 14.
During the quarter, Moody's repurchased 0.5 million shares at an average cost of $337.46 per share and issued 0.1 million as part of its employee stock-based compensation program.
Rebound In U.S. Treasury Yields and Google Cloud Growth Worries Overshadowed Market Sentiment
Barry Adams
25 Oct, 2023
New York City
Stocks faced pressure on Wall Street after investors reviewed the latest batch of earnings and kept wary eyes on bond market movements.
The S&P 500 index and the Nasdaq Composite index declined about 1% after Treasury yields rebounded and Google reported weaker-than-expected sales in its cloud unit.
The yield on 10-year U.S. Treasury notes rose to 4.9%, and investors are worried that the rapid increase in bond yields over the last 18 months has not been fully transmitted to the economy.
Most home owners are still enjoying mortgage rates of less than 3%, and large corporations have sold bonds that yielded less than 2%.
However, with the rapid rise in interest rates, new mortgage demand has plunged to the level last seen in 1995.
Mortgage Loan Application Hovered Near 28-Year Low
Total mortgage applications continued their downward slide as rates continued to advance, tracking higher rates set by the Federal Reserve.
The applications for mortgage loans dropped by 1% from the previous week in the week ending October 20, according to data from the Mortgage Bankers Association.
The index measuring the volume of mortgage demand dropped to its lowest since 1995.
The applications to purchase a home declined 2% from the previous week and plunged 22% from a year ago.
The rapid rise in interest rates had a double effect on the housing market, making homes less affordable for first-time buyers and preventing home owners from seeking a bigger or better home.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $726,200 or less soared by 20 basis points to 7.9%, the highest level since September 2000.
New Home Sales Sored to 19-month High
Single-family new home sales soared 12.3% to a seasonally adjusted annual rate of 759,000, the U.S. Census Bureau reported Wednesday.
The new home sales jumped 12.3% above the revised August rate of 676,000 and are 33.9% above the September 2022 estimate of 567,000.
The median sales price of new homes sold in September was $418,800, and the average sales price increased to $503,900, compared to 477,700 and $530,100, respectively, a year ago.
At the end of September, 435,000 homes were available for sale, equivalent to 6.9 months of supply at the current sales rate.
Crude Oil Turns Volatile
The prospect of an Israel-Hams war spilling over to neighboring states and spiraling into a larger war in the Middle East kept diplomats busy in the region.
U.S. troops are reporting attacks on its installations in Syria and Yemen, and killings are rising in the West Bank, and this is happening before Israel's imminent ground invasion as early as this week.
Crude oil prices lacked direction in nervous trading, and Israel stepped up its bombing campaign ahead of its ground invasion of Gaza.
The Gaza health ministry said at least 700 people, mostly civilians, were killed in an overnight bombing raid.
United Nations Security Council Secretary General Antonio Guterres called for an "immediate humanitarian ceasefire."
Guterres called the attack and kidnapping rampage on October 7 carried out by Hamas "appalling" but stressed that it “cannot justify the collective punishment of the Palestinian people. Excellencies, even war has rules.”
Israeli officials expressed their outrage in social media posts, and Israel's representative to the United Nations, Gilad Erdan, said Israel will refuse visas to United Nations officials, according to Israeli media.
U.S. Indexes and Yields
The S&P 500 index increased 0.8% to 4,252.43, and the Nasdaq Composite rose 1.0% to 13,147.32.
The yield on 2-year Treasury notes increased to 5.09%, 10-year Treasury notes inched higher to 4.89%, and 30-year Treasury bonds edged up to 5.03%.
Crude oil decreased $0.22 to $83.99 a barrel, and natural gas prices edged up 1 cent to $3.0 a thermal unit.
The dollar index edged higher to 106.39, the level last seen in November 2022, and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
Google-parent Alphabet Inc. dropped 8.9% to $126.48 after the search company reported quarterly results.
Revenue in the third quarter increased 11% to $76.7 billion from $69 billion, net income jumped to $19.7 billion from $13.9 billion, and diluted earnings per share advanced to $1.55 from $1.06 a year ago.
Google cloud revenue increased to $8.4 billion from $6.9 billion, but the growth in revenue fell short of some investors expectations.
Microsoft Corp. increased 3.4% to $343.87 after the software developer reported better-than-expected quarterly results.
Revenue in the fiscal first quarter increased by 13% to $56.5 billion, net income surged by 27% to $22.3 billion, and diluted earnings per share soared to $2.99 from $2.35 a year ago.
Cloud services revenue rose 19% to $24.3 billion, office and business productivity software, including LinkedIn, rose 13% to $18.6 billion, and personal computing revenue, which includes Windows and Xbox content, inched up 3% to $13.7 billion.
Microsoft returned $9.1 billion to shareholders in the form of stock repurchases and dividends in the first quarter of fiscal 2024.
Snap Inc. jumped 4.7% to $10.15 after the online chat platform operator reported better-than-expected quarterly results.
Snapchat's parent said third-quarter revenue increased 5% to $1.19 billion from $1.12 billion, net loss increased 2% to $368 million from $359.5 million, and diluted loss per share edged up to 22 cents from 20 cents a year ago.
The company said daily active users increased by 12% to 406 million, and the board of directors approved a $500 million stock repurchase plan over the next 12 months.
Boeing Company increased 0.8% to $183.76 after the aviation company and defense contractor said quarterly losses shrank and the company said it expects to deliver fewer-than-anticipated 737 Max planes this year.
Revenue in the third quarter increased 11% to $18.1 billion from $16 billion, net loss shrank to $1.6 billion from $3.3 billion, and diluted loss per share eased to $2.70 from $5.49 a year ago.
Third quarter results were negatively impacted by defense performance and lower 737 deliveries.
In the quarter, the plane maker delivered 105 planes, 6% fewer than 112 delivered in the period a year ago.
The company confirmed a backlog of $469 billion, including over 5,001 commercial airplanes.
During the quarter, the company booked 398 net orders, including 150 737 MAX 10 airplanes for Ryanair, 50 787 airplanes for United Airlines, and 39 787 airplanes for Saudi Arabian Airlines.
Europe Movers: Beiersdorf, Deutsche Bank, Dassault Systemes, Essentra, Kering, Reckitt Benckiser, Worldline
Inga Muller
25 Oct, 2023
Frankfurt
European market indexes lacked direction ahead of interest rate decisions from the European Central Bank on Thursday.
The DAX index decreased 0.2% to 14,855.62, the CAC-40 index fell 0.3% to 6,875.12, and the FTSE 100 index eased 0.1% to 7,383.05.
The yield on 10-yetrar German bonds increased to 2.85%, French bonds traded higher to 3.49%, the UK gilts edged up to 4.57%, and Italian bonds inched higher to 4.89%.
Deutsche Bank AG increased 6.5% to €10.12 after the German bank posted better-than-expected third-quarter results.
Revenue in the third quarter increased 3% to €7.13 billion from €6.92 billion, and profit attributable to shareholders declined 8% to €1.03 billion from €1.12 billion.
Provision for credit losses dropped 30% to 245 million from 350 million, and the bank confirmed provision for the full year to be near the upper end of its previously estimated range of between 25 and 30 basis points.
Deutsche Bank forecasted full-year 2023 revenue of around €29 billion, higher than €27.2 billion in 2022.
The bank also announced its plans to launch its stock repurchase plan and pay dividends.
Worldline SA plunged 57% to €9.78 after the French payment services provider lowered its full-year growth estimate.
The payment services provider added that it has severed relationships with several merchants "in light of the increase in cybercrime."
The company lowered its organic sales growth for 2023 to between 6% and 7% from the previous estimate of between 8% and 10%.
Worldline also forecasted the 2023 operating margin before depreciation and amortization to decline 150 basis points from the previous estimate of an increase of 100 basis points.
Reckitt Benckiser Group Plc declined 4.9% to 5,628.0 pence after the household products maker reported weaker-than-expected comparable sales in the third quarter.
Revenue in the third quarter declined 3.6% to £3.6 billion, and comparable sales increased 3.4%.
Higher prices are impacting sales volume as consumers look for alternative products or brands.
The revenue increase in the quarter was driven by a 1.6% decline in volume and a 7.5% jump in price increases passed to consumers.
The company forecasted comparable sales growth for the full year 2023 in the range of 3% to 5%.
Beiersdorf AG added 1.4% to €123.80 after the maker of Nivea-branded household products raised its full-year sales estimate.
The company said revenue in the first nine months ending in September increased 7.8% to €7.3 billion, followed by a 17.5% jump in sales in Nivea and a 24.8% increase in Derma, offsetting a 15.8% decline in skin-care and anti-aging brand La Prairie.
Beiersdorf raised its guidance for the consumer business segment for the full year to "low-double-digit organic sales growth" and confirmed its forecast for an EBIT margin excluding special factors at +50 basis points higher than in the previous year.
Essentra Plc decreased 4.5% to 141.20 pence after the maker of essential products forecasted full-year adjusted profit near the low end of its estimate.
Dassault Systemes SE rose 8.3% to €37.86 after the French software developer raised its annual profit outlook.
Kering SA fell 3.6% to €394.15 after the luxury products maker reported a decline in revenue in the third quarter.
Fresnillo Plc eased 0.9% to 524.80 pence after the precious metals miner reported a decline in gold and silver output.
European Markets Steady Amid Mixed Quarterly Earnings
Bridgette Randall
25 Oct, 2023
Frankfurt
European markets hovered near the flatline, and earnings releases picked up pace.
Benchmark indexes in Paris and Frankfurt lacked direction, and the index in London hovered near the flatline after resource stocks edged higher.
The European Central Bank is set to announce its rate decisions on Thursday, and investors are anticipating policymakers to leave rates unchanged.
Crude oil prices lacked direction in nervous trading, and Israel stepped up its bombing campaign ahead of its ground invasion of Gaza.
The Gaza health ministry said at least 700 people, mostly civilians, were killed in an overnight bombing raid.
United Nations Security Council Secretary General Antonio Guterres called for an "immediate humanitarian ceasefire."
Guterres called the attack and kidnapping rampage on October 7 carried out by Hamas "appalling" and stressed that it “cannot justify the collective punishment of the Palestinian people. Excellencies, even war has rules.”
Israeli officials expressed their outrage in social media posts, and Israel's representative to the United Nations, Gilad Erdan, said Israel will refuse visas to United Nations officials, according to Israeli media.
Europe Indexes and Yields
The DAX index decreased 0.2% to 14,855.62, the CAC-40 index fell 0.3% to 6,875.12, and the FTSE 100 index eased 0.1% to 7,383.05.
The yield on 10-yetrar German bonds increased to 2.85%, French bonds traded higher to 3.49%, the UK gilts edged up to 4.57%, and Italian bonds inched higher to 4.89%.
The euro hovered near a three-month low at $1.05, the British pound at $1.21, and the U.S. dollar at 89.62 Swiss cents.
Brent crude increased $0.17 to $88.25 a barrel, and the Dutch TTF natural gas edged lower by €0.37 to €48.89 per MWh.
Europe Stock Movers
Deutsche Bank AG increased 6.5% to €10.12 after the German bank posted better-than-expected third-quarter results.
The bank also announced its plans to launch its stock repurchase plan and pay dividends.
Worldline SA plunged 57% to €9.78 after the French payment services provider lowered its full-year growth estimate.
The payment services provider added that it has severed relationships with several merchants "in light of the increase in cybercrime."
The company lowered its organic sales growth for 2023 to between 6% and 7% from the previous estimate of between 8% and 10%.
Worldline also forecasted the 2023 operating margin before depreciation and amortization to decline 150 basis points from the previous estimate of an increase of 100 basis points.
Reckitt Benckiser Group Plc declined 4.9% to 5,628.0 pence after the household products maker reported weaker-than-expected comparable sales in the third quarter.
Beiersdorf AG added 1.4% to €123.80 after the maker of Nivea-branded household products raised its full-year sales estimate.
Essentra Plc decreased 4.5% to 141.20 pence after the maker of essential products forecasted full-year adjusted profit near the low end of its estimate.
Dassault Systemes SE rose 8.3% to €37.86 after the French software developer raised its annual profit outlook.
Kering SA fell 3.6% to €394.15 after the luxury products maker reported a decline in revenue in the third quarter.
Fresnillo Plc eased 0.9% to 524.80 pence after the precious metals miner reported a decline in gold and silver output.