Stocks Gyrated Amid Mixed Earnings and Rate Worries

Barry Adams
03 Mar, 2023
New York City

Benchmark indexes gyrated following comments from Fed officials in the last two sessions and retailers were in focus after the release of corporate earnings. 

Market indexes rebounded on Friday after Atlanta Fed President Raphael Bostic supported a smaller rate hike of 25 basis points after a day ago Fed Governor Christopher J. Waller supported 50 basis points rate increase if inflation fails to cool in comments to a group of bankers. 

Retailers were in focus after Best Buy, Macy's Big Lots and Costco Wholesale reported mixed quarterly earnings and sharp fall in electronics sales. 

In addition, online sales continued to slide at retailers after consumers shifted spending away from goods and electronics to travel and experiences . 

Dell Technologies said fourth quarter sales plunged on the ongoing weakness in personal computer sales. 

 

Indexes & Yields 

The S&P 500 index increased 0.5% to 4,003.50  and the Nasdaq Composite index added 0.5% to 12,121.50. 

The yield on 2-year Treasury notes inched lower to 4.85%, 10-year Treasury notes fell to 3.98% and 30-year Treasury bonds held stable near 3.93%. 

Crude oil prices fell $1.85 to $76.31 a barrel and natural gas prices eased 7 cents to $2.83 a thermal unit. 

 

U.S. Movers 

Best Buy increased 1.60% to $80.79 after the electronics retailer reported better-than-expected holiday quarter sales but warned sales softness to continue in the current fiscal year. 

Best Buy Co, Inc said revenue in the fourth quarter decreased to $14.7 billion from $16.3 billion and net income declined $495 million from $626 million and diluted earnings per share dropped to $2.23 from $2.62 a year ago. 

Revenue in the full-year 2022 declined to $46.3 billion from $51.8 billion and net income fell to $1.4 billion from $2.5 billion and diluted earnings per share dropped to $6.29 from $9.84 a year ago.  

Domestic comparable sales in the fourth quarter declined 9.6% on top of 2.1% and domestic online sales fell 13.0% on top of 11.2% from a year ago.

Domestic comparable sales in the fiscal year 2022 declined 9.9% from 10.4% increase and domestic online sales fell 13.5% on top of 12.0% fall in the previous year.   

The electronics retailer estimated revenue in the fiscal 2024 in the range between $43.8 billion from $45.2 billion and comparable sales to decline between 3.0% and 6.0%. 

Costco Wholesale decreased 1.9% to $476.0 after the discount retailer reported mixed quarterly results and a sharp decline in e-commerce sales. 

Costco Wholesale said revenue in the fiscal second quarter ending on February 12 increased to $55.2 billion from $51.9 billion and  net income increased to $1.5 billion from $1.3 billion and diluted earnings per share rose to $3.30 from $2.92 a year ago. 

Comparable store sales at U.S. locations excluding gasoline increased 3.5% and adjusted for calendar shift rose 3.4% and overall comparable sales rose 3.5% and 5.0% respectively. 

E-commerce sales in the quarter declined 11.2% and dropped 10.3% in the calendar adjusted period. 

Dell Technologies said revenue in the fourth quarter declined 11% to $25 billion and net income in the fourth quarter increased to $614 million from $2 million and diluted earnings per share rose to 84 cents from a loss of 4 cents in the previous year. 

Revenue in the full-year 2022 increased 1% to $102.3 billion and net income plunged 51% to $2.4 billion from $5.7 billion and diluted earnings per share fell to  $3.24 from $6.26 a year ago.