Market Update
Third Quarter GDP Annual Rate Revised Higher to 3.2%
Brian Turner
22 Dec, 2022
New York City
Investors sold stocks on Wall Street after third quarter economic growth was revised higher raising the prospects of more rate tightening by the Federal Reserve.
The sharp upward revision to economic growth adjusted for inflation was driven by an acceleration in consumer spending and nonresidential fixed investments and a smaller decrease in private inventory investment.
The S&P 500 index declined 1.8% to 3,807.33 and the Nasdaq Composite index dropped 2.6% to 10,428.73.
Real third quarter GDP growth was revised higher to 3.2% annual pace from the previous estimate of 2.9% after nonresidential fixed investment and consumer spending accelerated, the U.S. BEA said Thursday.
Current dollar GDP increased at an annual pace of 7.7%, or $475.5 billion, in the third quarter to a level of $25.72 trillion, an upward revision of $25.0 billion from the previous estimate.
Movers: AMC Entertainment, CarMax, Micron Technology, Tesla, Under Armour
Scott Peters
22 Dec, 2022
New York City
AMC Entertainment Holdings Inc plunged 14.5% to $4.51 after the company announced a plan to raise $110 million through a preferred share unit.
The company plans to hold a board meeting to approve a reverse stock split at a 1-to-10 ratio.
The movie theater chain operator said it will use the proceeds to repay debt.
CarMax, Inc declined 7.2% to $55.17 after the used-car retailer reported weaker-than-expected results.
Revenue in the third quarter ending in November declined 23.7% to $6.5 billion after combined retail and wholesale used vehicle unit sales fell 28% to 298,807.
Net earnings plunged to $37.6 million from $269.4 million and diluted earnings per share dropped to 24 cents from $1.63 a year ago.
Micron Technology Inc declined 2.8% to $49.75 after the company reported weak quarterly results and announced a plan to trim its workforce by 10% and suspend bonus in 2023.
Revenue in the fiscal first quarter ending in November fell to $4.09 billion from $6.6 billion in the previous quarter and $7.7 billion in the quarter a year ago.
The semiconductor chipmaker swung to a quarterly loss of $195 million from $2.3 billion a year ago and diluted loss per share was 18 cents from a profit of $2.04 a year ago.
The company guided revenue in the fiscal second quarter of 2023 of $3.8 billion with a band of $200 million and gross margin between 5% and 10% and diluted earnings per share range between -$0.79 and $0.10.
Tesla Inc plunged 9.8% to $124.10 on the demand worries in the U.S. and China and rising production costs and distracted chief executive after his recent purchase of Twitter Inc.
Tesla is offering $7.500 discount for the U.S. delivery of Model 3 and Model Y before the end of December, according to the order form on the company website.
The discount offer also comes with 10,000 miles free supercharging.
Under Armour Inc declined 4.4% to $9.49 and the apparel retailer appointed Marriott International President Stephanie Linnartz to be its next chief executive.
The athletic apparel retailer is struggling to build its e-commerce business and looking to ramp up its online presence and bolster e-commerce sales and social media profile.
Linnartz is expected to assume the chief executive office on Feb 27, who has been with Marriott since 1997.
Major Averages Dropped 2% After Upward Economic Growth Revision
Barry Adams
22 Dec, 2022
New York City
Investors sold stocks on Wall Street after third quarter economic growth was revised higher raising the prospects of more rate tightening by the Federal Reserve.
The sharp upward revision to economic growth adjusted for inflation was driven by an acceleration in consumer spending and nonresidential fixed investments and a smaller decrease in private inventory investment.
The S&P 500 index declined 1.8% to 3,807.33 and the Nasdaq Composite index dropped 2.6% to 10,428.73.
Crude oil increased 12 cents to $78.37 a barrel and natural gas futures were nearly unchanged at $5.31 a thermal unit.
The yield on 2-year Treasury notes edged higher to 4.26%, 10-year Treasury notes edged lower to 3.66% and 30-year Treasury bonds inched lower to 3.73%.
Q3 GDP Revised Higher
Real third quarter GDP growth was revised higher to 3.2% annual pace from the previous estimate of 2.9% after nonresidential fixed investment and consumer spending accelerated, the U.S. Bureau of Economic Analysis said Thursday.
Current dollar Gross Domestic Product increased at an annual pace of 7.7%, or $475.5 billion, in the third quarter to a level of $25.72 trillion, an upward revision of $25.0 billion from the previous estimate.
Weekly Jobless Claims Drop
Initial claims of jobless benefits rose 2,000 to 216,000 in the week ending December 17 and continuing claims fell 6,000 to 1,672,00 in the week ending December 3, the Dept of Labor said Thursday.
Stock Movers
AMC Entertainment Holdings Inc plunged 14.5% to $4.51 after the company announced a plan to raise $110 million through a preferred share unit.
The company plans to hold a board meeting to approve a reverse stock split at a 1-to-10 ratio.
The movie theater chain operator said it will use the proceeds to repay debt.
Micron Technology Inc declined 2.8% to $49.75 after the company reported weak quarterly results and announced a plan to trim its workforce by 10% and suspend bonus in 2023.
Revenue in the fiscal first quarter ending in November fell to $4.09 billion from $6.6 billion in the previous quarter and $7.7 billion in the quarter a year ago.
The semiconductor chipmaker swung to a quarterly loss of $195 million from $2.3 billion a year ago and diluted loss per share was 18 cents from a profit of $2.04 a year ago.
The company guided revenue in the fiscal second quarter of 2023 of $3.8 billion with a band of $200 million and gross margin between 5% and 10% and diluted earnings per share range between -$0.79 and $0.10.
CarMax, Inc declined 7.2% to $55.17 after the used-car retailer reported weaker-than-expected results.
Revenue in the third quarter ending in November declined 23.7% to $6.5 billion after combined retail and wholesale used vehicle unit sales fell 28% to 298,807.
Net earnings plunged to $37.6 million from $269.4 million and diluted earnings per share dropped to 24 cents from $1.63 a year ago.
U.S. Indexes Advanced Second Day, Crude Oil Extended Recent Gains
Barry Adams
21 Dec, 2022
New York City
Benchmark indexes jumped more than one percent and closed higher for the second day in a row.
Investors stepped up to add more exposure to retail stocks after FedEx and Nike reported earnings ahead of market expectations.
Energy stocks were also in favor after two separate reports showed larger-than-expected withdrawal of crude oil inventories.
Home builders closed higher despite the decline in existing home sales in November but median home price increased.
The S&P 500 index increased 1.5% to 3,878.44 and the Nasdaq Composite index advanced 1.5% to 10,709.37.
The yield on 2-year Treasury notes eased to 4.22%, 10-year Treasury notes fell to 3.67% and 30-year Treasury bonds dropped to 3.78%.
Crude Oil Jumps After Inventories Reports
Crude oil futures jumped 2.8% to $78.33 a barrel after the U.S. inventories declined 3.1 million barrels last week from the 7.8 million barrels increase in the previous week, the American Petroleum Institute reported Tuesday.
U.S. crude oil inventories declined 5.894 million in the week ending December 16, the Energy Information Administration indicated in its weekly report released Wednesday.
Natural gas futures rose 14 cents to $5.47 a thermal unit.
Home Sales Declined 7.7% In November
Existing home sales annual pace in November declined 7.7% to 4.09 million units from October, the National Association of Realtors reported Wednesday.
Sales plunged 35.4% from a year ago and weakest since November 2010.
Mortgage Rate Eased Last Week
Mortgage rates for standard loans with 20% down payment decreased 8 basis points to 6.34% in the week ended December 16, the Mortgage Bankers Association report showed Wednesday.
U.S. Stock Movers
FedEx increased 4.8% to $172.12 after the parcel delivery company reported a decline in earnings but results were ahead of expectations.
FedEx revenue in the fiscal second quarter declined 3% to $22.8 billion and net income dropped to $788 million from $1.04 billion and diluted earnings per share fell to $3.07 from $3.88 a year ago.
Nike Inc soared 14.01% to $117.73 after the footwear maker and retailer reported better-than-expected quarterly results.
Revenue in the fiscal second quarter increased 17% to $13.3 billion and gross margin declined 300 basis points to 42.9%.
Net income in the quarter was flat at $1.3 billion and diluted earnings per share increased to 85 cents from 84 cents a year ago.
Inventories in the quarter increased 43% to $9.3 billion from a year ago but declined from $9.7 billion in the previous quarter.
Excess merchandise in the prior quarter led to above-normal discounting, negatively impacting gross margin.
Direct sales also increased 16% to $5.4 billion and digital sales rose 25%
Holiday Sales Expectations Lift Europe Indexes
Stock markets in Europe traded higher and major indexes rebounded from six-week lows on holiday sales optimism.
Consumer sector stocks were in focus and bond yields were stable in trading on Wednesday.
Crude oil prices advanced after two separate reports showed a larger than expected decline in the U.S. inventories but natural gas prices extended losses after supply worries eased.
The DAX index increased 1.5% to 14,097.82, the CAC-40 index surged 2.5% to 6,580.24 and the FTSE 100 index jumped 1.7% to 7,497.32.
The yield on 10-year German Bunds inched up to 2.3%, French bonds edged higher to 2.84%, the UK Gilts edged down to 3.47% and Italian bonds inched lower to 4.42%.
Crude Oil Advanced After U.S. Inventories Declined
Dutch front-month natural gas futures extended losses and dropped to one-month low and below
The S&P 500 and the Nasdaq Composite indexes closed up 1.5% and crude oil jumped nearly 3% to $78.30 a barrel.
21 Dec, 2022
European markets closed up between 1.5% and 2.0% on holiday sales and earnings improvement optimism.
21 Dec, 2022
European Markets Rebound 1.5% from Six-week Low
Bridgette Randall
21 Dec, 2022
Frankfurt
Stock markets in Europe traded higher and major indexes rebounded from six-week lows on holiday sales optimism.
Consumer sector stocks were in focus and bond yields were stable in trading on Wednesday.
Crude oil prices advanced after two separate reports showed a larger than expected decline in the U.S. inventories but natural gas prices extended losses after supply worries eased.
The DAX index increased 1.5% to 14,097.82, the CAC-40 index surged 2.5% to 6,580.24 and the FTSE 100 index jumped 1.7% to 7,497.32.
The yield on 10-year German Bunds inched up to 2.3%, French bonds edged higher to 2.84%, the UK Gilts edged down to 3.47% and Italian bonds inched lower to 4.42%.
Crude Oil Advanced After U.S. Inventories Declined
Dutch front-month natural gas futures extended losses and dropped to one-month low and below