STOCK MARKET NEWS: Dow tanks 697 points, Home Depot, Walmart hit by inflation, Treasury yields rise (2024)

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Stocks crater on inflation woes, consumer spending

U.S. stocks tanked on Tuesday registering the worst day of the year as the yield on the 10-year Treasury neared 4%. Home Depot and Walmart, in earnings updates, both signaled inflationary headwinds continue to pressure consumers. In commodities, oil slipped 0.2% to $76.16 per barrel.

The Dow Jones Industrial Average has now erased all its gains for the year falling nearly 700 points.

Bed Bath & Beyond to pay bond interest due

Bed Bath & Beyond store, Deptford, N.J., Jan. 15, 2023

Bed Bath& Beyond announced it will pay interest previously due on Feb. 1 to holders of senior notes on Feb.28.

CEO Sue Gove said, “Building on the transformative equity financing we announced earlier this month, we continue to work on improving our financial position and optimizing value for all our stakeholders. Today’s announcement is an important step in resetting our operational and financial foundation and meeting our commitments. We remain focused on utilizing our current and future financing to execute our turnaround plans and restore our position with customers.”

The specialty retailer has pre-fundedthe full amount of the Feb. 1interest to be paid.

Dillard's to close three stores, open one

Dillard's Inc. on Tuesday reported fiscal fourth-quarter earnings of $289.2 million.

The Little Rock, Arkansas-based company said it had profit of $16.89 per share. Earnings, adjusted for pretax gains and non-recurring gains, came to $14.50 per share.

The department store operator posted revenue of $2.13 billion in the period, beating Street forecasts. Three analysts surveyed by Zacks expected $2.11 billion.

Comparable store sales increased 5%.

For the year, the company reported profit of $891.6 million, or $50.81 per share. Revenue was reported as $6.87 billion.

The company is closing three locations during the first quarter of 2023:

• Santa Rosa Mall, Ft. Walton Beach, Fla.

• Conestoga Mall, Grand Island, Neb.

• Metrocenter Mall, Phoenix, Ariz.

The department store operator also plans to open a new store at The Empire Mall in Sioux Falls, South Dakota in the spring of 2024.

The Associated Press contributed to this report.

Luxury homebuilder Toll Brothers beats Wall Street estimates

Toll Brothers Hillcrest at Porter Ranch, Los Angeles, Calif. (Photo: Toll Brothers)

Toll Brothers on Tuesday reported fiscal first-quarter net income of $191.5 million.

On a per-share basis, the Fort Washington, Pa.-based company said it had net income of $1.70.

The results exceeded Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of $1.37 per share.

The home builder posted revenue of $1.78 billion in the period, also surpassing Street forecasts. Seven analysts surveyed by Zacks expected $1.74 billion.

Caesars Entertainment tops Wall Street profit expectations, matches revenue

Caesars Palace Augustus lobby (Photo: Caesars Entertainment)

Caesars Entertainment on Tuesday reported a loss of $148 million in its fourth quarter.

On a per-share basis, the Reno, Nev.-based company said it had a loss of 70 cents. Losses, adjusted for asset impairment costs and to extinguish debt, were 11 cents per share.

The results topped Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for a loss of 18 cents per share.

The casino and resort operator posted revenue of $2.82 billion in the period, meeting Street forecasts.

Palo Alto Networks sees strong year on solid demand for cybersecurity

PaloAltoNetworks Incraised its full-year profit forecast on Tuesday as spending on cyber-security products stays strong in the face of a turbulent economy, sending its shares up about 5.5% in trading after the bell.

A rise in cyberattacks and the growing digital presence of businesses and governments have ensured strong demand for software from cybersecurity companies such asPaloAltoNetworks, even as rising interest rates and high inflation weigh on technology budgets.

Excluding items, the company expects full-year net income per share in the range of $3.97 and $4.03, compared with its previous forecast of $3.37 and $3.44.

The company maintained its earlier full-year revenue forecast of $6.85 billion to $6.91 billion.

Camping World swings to Q4 loss

Camping World is lower in extended trading.

The recreation vehicle dealer said fourth quarter revenue declined 7.1% to $1.3 billion.

Used vehicle revenue was $392.6 million in the three months ended Dec. 31, a decrease of $19.7 million, or 4.8%, and new vehicle revenue declined $72.6 million, or 13.1%.

The net loss was $57.2 million, versus net income of $59.3 million in the prior year quarter.

“In light of the short-term softening of demand and new vehicle margin compression, we recognized the need for aggressive annualized cost reductions, starting in the fall of 2022. This includes reduced headcount, the elimination or reduction of underperforming assets, locations, and business lines, while enhancing the wages and benefits of our employees,” said Chair and CEO Marcus Lemonis.

Coinbase swings to quarterly loss as crypto winter hits trading volumes

Representation of the cryptocurrency is seen in front of Coinbase logo in this illustration taken, Mar. 4, 2022. (Reuters/Dado Ruvic/Illustration)

Coinbase Global Inc reported a loss for the fourth quarter on Tuesday, as trading volumes at the cryptocurrency exchange came under pressure from an industry-wide downturn triggered by a string of high-profile bankruptcies.

The market for digital assets has suffered from dour sentiment over the last year, as investors shunned risky assets amid spiraling market volatility and worries of an upcoming recession.

But the biggest blow to the sector came from the bankruptcy of Sam Bankman-Fried's major crypto exchange FTX in November. The collapse has since drawn tough global regulatory scrutiny on companies operating in the crypto sector and fueled worries of a contagion hitting other firms.

The company reported net revenue of $605 million in the quarter, compared with $2.49 billion a year earlier.

Coinbase reported a net loss of $557 million in the three months ended Dec. 31, compared with a profit of $840 million a year earlier.

Developing Story

Despite Walmart's weak outlook, shares pop

Walmart/Gatick

Shares of Walmart are up on Tuesday, after the company said its economic outlook for 2023 was lowered because consumers were likely to continue shopping for cheaper-priced items that could pressure its margins.

In Walmart's quarterly earnings report, the retail king delivered adjusted earnings of $1.71 a share, beating estimates of $1.52. Revenue reached $164 billion, up 7.3%, beating estimates of $159.7 billion, according to FactSet.

The company's quarterly attributable net income also went up, rising 76.2% to $6.28 billion, helped by unrealized gains in equity and other investments.

Meanwhile, U.S. same-store sales, an industry metric tracking revenue at stores open for more than a year, peaked at 8.3% to pummel expectations for a 4.9% increase.

BlackRock 'overweights' China, Treasuries as inflation lingers

Trader works as a screen displays the trading information for BlackRock on the floor of the New York Stock Exchange (NYSE) in New York City, Oct. 14, 2022. (Reuters/Brendan McDermid)

BlackRock Investment Institute raised U.S. short-term governmentbondsas well as Chinese and other emerging market stocks to "overweight" on Tuesday, saying investors were realizing that the U.S. Federal Reserve may have to become more aggressive in its campaign to subdue inflation.

Macroeconomic data in recent weeks has pointed to a resilient economy with inflation stubbornly far from the Federal Reserve's 2% target.

"Now bond markets are waking up to the risk the Fed hikes rates higher and holds them there for longer," BlackRock said in a research note.

BlackRock said it was boosting its allocation of Treasuries on its six- to 12-month horizon to take advantage of higher yields. To balance that adjustment, it is said it was reducing its exposure to investment-grade credit.

BlackRock also said it was going "overweight" on Chinese and other emerging-market stocks — a bet on China's economic recovery after Beijing jettisoned its strict "zero COVID" policy in December.

Home Depot says it will raise pay for US, Canadian workers

Home Depot said Tuesday it’s investing $1 billion in wage increases for its U.S. and Canadian hourly workers.

The Atlanta-based home improvement chain said every hourly employee will get a raise starting this month. Starting pay will be at least $15 per hour in all markets.

Home Depot is one of many big retailers who have raised pay to attract workers in astrong U.S. job market, where unemployment is at its lowest level since 1969.

Home Depot employs 437,000 people in the U.S. and 34,000 in Canada. The vast majority are hourly employees, the company said. The company operates 2,000 stores in the U.S. and 182 stores in Canada.

J&J loses challenge to $302M judgment over pelvic mesh marketing

Johnson & Johnson company offices in Irvine, Calif., Oct. 14, 2020. (Reuters/Mike Blake)

The U.S. Supreme Court on Tuesday let stand a $302 million judgment against Johnson & Johnson in a lawsuit brought by the state of California accusing the company of concealing the risks of its pelvic mesh products.

The court, following its usual practice, did not give any reason for refusing to hear J&J's appeal.

J&J had argued to the Supreme Court that state consumer protection laws like California's are too vague, exposing companies to unpredictable state lawsuits. Business groups including the U.S. Chamber of Commerce backed the company.

“Today, those victims can rest easier, knowing the $302 million judgment we secured against the company is final. Let this be a strong warning: The California Department of Justice will not hesitate to take action against corporations that violate the law and harm consumers," said California attorney general Rob Bonta in a statement.

Developing Story

Oil prices yo-yo in volatile session

Reuters/Aly Song

The price of oil is wobbling between small gains and losses on Tuesday, as ongoing concerns about the global economy offset supply restraints.

Halfway through the session, oil was up roughly 0.29% to $76.56 a barrel. On Monday, oil prices rose by more than 1% on optimism over Chinese demand that analysts expect to rebound this year after COVID-19 restrictions were scrapped.

The West Texas Intermediate contract did not settle on Monday because of a public holiday in the United States, which has also delayed by a day both industry and official weekly U.S. oil inventory reports, respectively to Wednesday and Thursday.

Meanwhile, Russia plans to cut crude oil production by 500,000 barrels per day, or about 5% of its output, in March after the West imposed price caps on Russian oil and oil products over the invasion of Ukraine.

Russia is part of the OPEC+ group comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies, which agreed in October to cut oil production targets by 2 million bpd until the end of 2023.

EPA orders Norfolk Southern to clean polluted Ohio derailment site

The cleanup of portions of a Norfolk Southern freight train that derailed Feb. 3, in East Palestine, Ohio, continues on Feb. 9, 2023. (AP Photo/Gene J. Puskar)

The U.S. government on Tuesday ordered rail operator Norfolk Southern to clean up contaminated soil and water at the site of a train derailment in East Palestine, Ohio, and to attend all public meetings with local residents.

The Environmental Protection Agency order requires Norfolk Southern to submit a work plan forEPAapproval for the clean up associated with the Feb. 3 derailment of a train loaded with toxic chemicals that caused a fire and sent a cloud of smoke over the town that forced thousands of residents to evacuate while railroad crews drained and burned off chemicals.

EPAissued the order under the federal Comprehensive Environmental Response, Compensation, and Liability Act, which gives it the authority to force parties responsible for pollution to clean it up.

Regan made a second trip on Tuesday to East Palestine, the derailment site.

Microsoft president says he has Activision licensing deal with Nvidia

Microsoft President Brad Smith said on Tuesday the U.S. software giant has agreed to a licensing deal that will bring Activision games to Nvidia's gaming platform and hoped that rival will consider doing the same.

Smith told a news conference he was now more optimistic of getting the Activision deal done after the Nvidia deal as well as a similar licensing deal with Nintendo.

Offshore energy services company Helix Energy topped Wall Street estimates.

Helix Energy got a boost from the oil and gas market.

Fourth quarter revenue rose 71% to $287.82 million; analysts expected $253.54 million.

Production Facilities revenues increased$9.4 million, or 51%, during the fourth quarter 2022 primarily due to higher oil and gas production from our Droshky wells and a full quarter of production from the Thunder Hawk wells following their acquisition onAug. 25, 2022, offset in part by lower oil and gas prices compared to the prior quarter.111

Net income for the three months ended Dec. 31 was $2.7 million compared to a year ago net loss of $25.9 million.

Quarterly adjusted earnings for the offshore energy services company were 2 cents​​ per share. The mean expectation of seven analysts for the quarter was for breakeven results per share.

CEO Owen Kratz stated, “Our fourth quarter 2022 results maintained strong performance sequentially in what is normally a seasonally slower period for Helix. Our fourth quarter results were aided by a healthy oil and gas market, seasonally adjusted but strong Robotics operations, and ongoing contribution from our Alliance acquisition.”

Reuters contributed to this report.

Door, window maker JELD-WEN tops Wall Street estimates

JELD-WEN Holding, Inc. on Tuesday reported fourth-quarter earnings of $33.6 million.

The Charlotte, North Carolina-based company said it had net income of 40 cents per share. Earnings, adjusted for non-recurring costs, were 47 cents per share.

The results surpassed Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of 25 cents per share.

The company posted revenue of $1.33 billion in the period, also topping Street forecasts. Six analysts surveyed by Zacks expected $1.22 billion.

For the year, the company reported profit of $45.7 million, or 53 cents per share. Revenue was reported as $5.13 billion.

JELD-WEN expects full-year revenue in the range of $4.5 billion to $4.9 billion.

Existing home sales fall in January, but pace slowing

Home for sale in Philadelphia, Pa., Feb. 19, 2023

U.S. existing home sales dropped to a more than 12-year low in January, but the pace of decline slowed, raising cautious optimism that the housing market slump could be close to reaching a bottom.

Existing home sales fell 0.7% to a seasonally adjusted annual rate of 4.00 million units last month, the lowest level since October 2010, the National Association of Realtors said on Tuesday. That marked the 12th straight monthly decline in sales, the longest such stretch since 1999.

Sales fell in the Northeast and Midwest, but rose in the South and West. Economists polled by Reuters had forecast home sales rising to a rate of 4.10 million units.

Home resales, which account for a big chunk of U.S. housing sales, plunged 36.9% on a year-on-year basis in January.

Medical equipment maker Smith+Nephew reports best revenue quarter of 2022

Medical device maker Smith+Nephew said fourth quarter revenue grew 1.4% to $1.35 billion.

Underlying growth was 6.8%, the strongest for all of 2022, helped by improved trading in the final quarter across all divisions, with Sports Medicine & ENT (Ear Nose and Throat) performing particularly strongly.

Full-year revenue was flat on a reported basis at $5.21 billion, but up 4.7% on an underlying basis.

Trading profit was $901 million, down from $936 million in 2021 due to factors including higher inflation, and a rebound in sales and marketing expenditure. This was a margin of 17.3% against earlier guidance of 17.5%.

“Smith & Nephew’s struggles to return to profit growth continue, with already downgraded margin guidance for 2022 effectively being pushed out another year as inflation continues to bite. However, an uptick in top line growth at the end of 2022 across all divisions is encouraging,” said Derren Nathan, head of equity research at Hargreaves.

Home Depot warns of profit hit from slowing demand, rising wages in 2023

Home Depot store, West Berlin, N.J., Nov. 24, 2022

Home Depot Inc on Tuesday warned of slowing demand for home improvement goods this year as inflation dents the ability of customers to spend on remodeling projects.

The No. 1 U.S. home improvement chain forecast annual profit below Wall Street expectations as it increases spending on wages by $1 billion to tackle labor shortages while struggling with higher costs.

Following an exponential surge in remodeling activity during the pandemic, demand for home improvement tools such as paint and flooring is now cooling as consumers cut back spending, setting the company up for a challenging 2023.

Home Depot's comparable sales fell 0.3% in the fourth quarter, driven by a 6% drop in customer transactions. Analysts on average expected a 0.6% increase.

The company expects earnings per share to decline in the mid-single digits percentage range for 2023, while analysts were expecting a 0.4% increase to $16.72, according to Refinitiv data.

Medtronic beats quarterly profit estimates on strong heart device sales

Medical device makerMedtronicPlc on Tuesday beat quarterly profit estimates, helped by strong demand for its heart and diabetes devices.

Growth in cardiovascular, neuroscience and diabetes devices helped soften a blow to sales in China from a resurgence in COVID-19 cases, which have hit rivals such as Abbott Laboratories and Johnson & Johnson.

Sales atMedtronic's heart devices unit, its biggest revenue driver, increased 1% to $2.77 billion, above analysts' estimates of $2.71 billion, according to Refinitiv IBES data.

Tepid non-urgent procedure growth in some markets also partially offset some of the company's growth, Chief Executive Officer Geoff Martha said in a statement.

HSBC signals rate rise profit windfall has peaked even as payouts rise

HSBC's logo on a branch bank in the financial district in New York, Aug. 7, 2019. (Reuters/Brendan McDermid)

HSBC dampened investors' expectations of a sustained income bonanza from rising global interest rates, even after Europe's biggest bank reported a 92% surge in quarterly profit and pledging more regular dividends and share buybacks.

The London-headquartered bank said on Tuesday it would pay a special dividend of $0.21 per share, from the proceeds of the $10 billion sale of its Canada business.

With its $1.3 trillion in customer deposits, HSBC benefits more than many smaller banks from central bank hikes that enable it to charge a wider margin on its loans and mortgages.

The bank however said it expected net interest income to be at least $36 billion in 2023, shy of $37 billion forecasts and a $38 billion annualized figure analysts calculated from its latest quarterly numbers.

“The numbers themselves are strong compared to market expectations but the market was hoping for a little more good news in the outlook statement, so the shares are down by around 1% this morning,” said Steve Clayton, head of equity funds at Hargreaves Lansdown.

“The business is performing well, but much depends on the group maintaining robust cost controls. That means more branch closures in the UK this year, with another 130 set to close. But for shareholders, that intention to pay out half of earnings suggests an ongoing yield from HSBC shares of perhaps as much as 7% this year and next, with that extra USD21c special dividend on top.”

Reuters contributed to this report.

Molson Coors stock up big after strong quarter

Fox News

Shares of Molson Coors Beverage Co. are brewing on Tuesday after the company reported fourth quarter adjusted profit that beat expectations.

Net sales for Molson Coors grew 0.4% to $2.630 billion over the quarter but was below the FactSet consensus of $2.644 billion.

Meanwhile, a 10.7% increase in price and mix offset a 6.9% decline in sales volume, and a negative 3.4% effect from a higher dollar. Excluding nonrecurring items, such as a $845 million impairment charge, adjusted earnings per share rose to $1.30 from 81 cents and beat the FactSet EPS consensus of $1.07.

For 2023, the company said it expects sales to increase in the “low single-digit” percentage range.

Manufacturers speaking out on climate push

The National Association of Manufacturers is defending its practices on clean energy while asking the EPA to dial back its push to over regulate.

Larry Summers delivers fresh warning

Former U.S. Treasury Secretary Larry Summers is criticizing the Federal Reserve again over their handling of runaway inflation.