U.S. Movers: Bank of America, Chipmakers, Choice Hotels, Goldman Sachs, Johnson & Johnson, Lockheed Martin, Wyndham Hotels

Scott Peters
17 Oct, 2023
New York City

Stocks faced headwinds after hotter-than-expected retail sales in September supported the case for one  more rate hike in the year and higher rates through 2024. 

The S&P 500 index decreased 0.2% to 4,364.92 and the Nasdaq Composite fell 0.4% to 13,515.26. 

The yield on 2-year Treasury notes increased to 5.13%, 10-year Treasury notes inched higher to 4.76% and 30-year Treasury bonds edged up to 4.91%. 

Bank of America Corp increased 1.3% to $27.33 after the financial services company reported quarterly results. 

Revenue in the third quarter increased 3% to $25.2 billion from $24.5 billion and net interest income jumped 4% to $14.4 billion driven by higher interest rates and loan growth. 

Net income in the quarter increased to $7.8 billion from $7.4 billion and diluted earnings per share edged up to 90 cents from 88 cents a year ago.  

The provision for loan losses edged up by $336 million to $1.2 billion, reflecting weakening commercial real estate market conditions and stretched consumers.  

Goldman Sachs was unchanged at $314.50 after the financial services provider reported mixed quarterly results. 

Third quarter revenue edged slightly lower to $11.8 billion from $11.97 billion and net income dropped to $2.1 billion from $3.1 billion and diluted earnings per share fell to $5.47 from $8.25 a year ago.. 

The 6% decline in revenue in asset management was overshadowed by an 8% increase in global investment banking fees. 

Johnson & Johnson added 0.1% to $157.57 after the company reported slightly better-than-expected quarterly results. 

Revenue in the third quarter increased 6.8% to $21.3 billion from $19.99 billion and net earnings was flat at $4.3 billion and diluted earnings per share edged up 4% to $1.69 from $1.62 a year ago. 

Sales in the U.S. increased 11.1% to $12 billion from $10.8 billion and international sales rose 1.6% to $9.3 billion from $9.2 billion a year ago. 

The company revised higher its estimate of non-GAAP annual sales growth estimate to between 8.5% and 9.0% from the previous estimate between 8.0% and 8.5%.   

Advanced chipmakers traded down after the U.S. Commerce Department  said it plans to unveil additional restrictions on the sale of artificial intelligence chips to China. 

Intel Corp declined 2% to $35.83, Advanced Micro Devices fell 1.0% to $105.40 and Broadcom Inc dropped 2.5% to $880.63. 

Wyndham Hotels & Resorts Inc soared 10.4% to $76.28 after Choice Hotels International made a public offer to acquire the budget hotel chain operator. 

Choice offered $90 a share, $49.50 in cash and 0.324 of its own stock, about 30% premium to its closing price in the previous regular trading session. 

Choice decided to take its $7.8 billion offer directly to shareholders after merger talks between the two companies broke down after six months of discussion.  

Before the merger talks broke down, Choice had increased its initial offer of $80 a share to $85 a share, but two parties failed to agree on a deal after discussions stalled since May. 

Lockheed Martin Corp jumped 1% to $444.71 after the defense contractor reiterated its full-year  guidance and released its latest quarterly results. 

Revenue in the third quarter ending on September 24 rose 2% to $16.9 billion and net income declined to $1.7 billion from $1.8 billion and diluted earnings per share edged up to $6.73 from $6.71 a year ago. 

Lockheed reiterated its full-year revenue range between $66.25 billion and $66.75 billion and diluted earnings per share between $27.0 and $27.20 and free cash flow of $6.2 billion.