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Dow Jones soars nearly 500 points to session high on signs that Fed may be done hiking rates

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U.S. stocks were trading near session highs Thursday afternoon, with the S&P 500 on track to climb for a fourth straight session as bond yields slumped and traders cheered signs that the Federal Reserve may forgo further interest-rate hikes.

What’s happening

  • The Dow Jones Industrial Average
    DJIA
    gained 485 points, or 1.5%, to 33,755, setting fresh highs for the session.
  • The S&P 500
    SPX
    rose 72 points, or 1.7%, to 4,310.
  • The Nasdaq Composite
    COMP
    gained 211 points, or 1.6%, to 13,272.

On Wednesday, the Dow rose 222 points, or 0.67%, to 33275, logging its biggest three-session advance since April. 3, Dow Jones Market Data show.

What’s driving markets

Wall Street stepped up a four-day rally Thursday afternoon, with energy, financials and the rate-sensitive information technology segments of the S&P 500 all up 5% on the week so far, according to FactSet data.

The rally in stocks was intensifying after the Federal Reserve kept interest rates on hold Wednesday. The main focus in markets was on its hints that rising bond yields have been doing some of the central bank’s inflation-fighting job for it.

Although, Jamie Dimon, JP Morgan Chase & Co.’s
JPM,
+1.34%

chief executive, on Thursday warned of the chance of additional rate hikes, saying the mega bank was prepared in the event 10-year Treasury yields
BX:TMUBMUSD10Y
rise to 7% to 8%.

“Obviously, the market is reacting positively,” Peter Cardillo, chief market economist at Spartan Capital Securities, said during a phone interview with MarketWatch.

“The fact that Powell paused for the second [meeting] in a row and basically indicated that rising yields are doing the Fed’s work by saying yields would dampen activity going forward — to me this suggests that he’s finished with the tightening cycle.”

Treasury yields continued to slide, with the 10-year yield down 8 basis points at 4.68%, near its lowest level in more than two weeks, according to FactSet data. Bond yields move inversely to prices.

That also helped lift stocks, with the S&P 500 poised to rise for a fourth day and on pace for its biggest four-day percentage gain in roughly a year, according to Dow Jones Market data.

Stocks added to their gains following a batch of favorable labor-market data released ahead of Friday’s October jobs report. A weekly report on jobless claims showed the number of Americans who applied for unemployment benefits last week increased by 5,000 to a seven-week high of 217,000.

But strategists were more focused on a quarterly U.S. government reading on labor-market productivity, which surpassed economists’ expectations while showing that labor costs have fallen.

A 0.8% decline in unit labor costs marked the first decline since the fourth quarter of last year. Cardillo said signs of cheaper labor helped boost demand for stocks Thursday.

After the bell, investors will receive earnings from Apple
AAPL,
+1.93%

while they wait for Friday’s October jobs report.

They’ll be watching carefully as the “Magnificent Seven” member lays out its latest results and guidance following a batch of earlier reports from other megacap technology companies that weren’t well-received by the markets.

Finally, the Bank of England on Thursday opted to follow the Fed and hold rates steady for a second straight meeting, though the vote was closer than expected: 6-to-3 in favor of keeping rates at 5.25%.

Stocks in focus

  • Crocs Inc.’s
    CROX,
    -6.67%

    stock was 7% lower Thursday after its fourth-quarter earnings projections fell short of analyst estimates.
  • Starbucks Corp.
    SBUX,
    +10.71%

    shares jumped more than 11% after earnings beat estimates and people continued to spend on pricier coffees.
  • PayPal Holding
    PYPL,
    +6.50%

    shares were up 6% after Wall Street heard from its new CEO Alex Chriss as the company delivered quarterly results.
  • Shares of Palantir
    PLTR,
    +20.38%

    were nearly 20% higher.
  • Tesla Inc.
    TSLA,
    +5.93%

    shares rose, putting them on track for their best day in a month and for a three-day win streak.
  • Peloton Interactive Inc.
    PTON,
    +15.28%

    turned higher, jumping 16%, despite the maker of connected exercise equipment delivering a downbeat outlook for the holiday period.
  • Eli Lilly & Co.
    LLY,
    +4.23%

    shares rose on Thursday after the drugmaker reported a surprise third-quarter profit and strong sales growth, boosted by diabetes drug Mounjaro.

—Steve Goldstein contributed reporting

 

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Telus prioritizing ‘most important customers,’ avoiding ‘unprofitable’ offers: CFO

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Telus Corp. says it is avoiding offering “unprofitable” discounts as fierce competition in the Canadian telecommunications sector shows no sign of slowing down.

The company said Friday it had fewer net new customers during its third quarter compared with the same time last year, as it copes with increasingly “aggressive marketing and promotional pricing” that is prompting more customers to switch providers.

Telus said it added 347,000 net new customers, down around 14.5 per cent compared with last year. The figure includes 130,000 mobile phone subscribers and 34,000 internet customers, down 30,000 and 3,000, respectively, year-over-year.

The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.09 per cent in the third quarter, up from 1.03 per cent in the third quarter of 2023. That included a postpaid mobile phone churn rate of 0.90 per cent in its latest quarter.

Telus said its focus is on customer retention through its “industry-leading service and network quality, along with successful promotions and bundled offerings.”

“The customers we have are the most important customers we can get,” said chief financial officer Doug French in an interview.

“We’ve, again, just continued to focus on what matters most to our customers, from a product and customer service perspective, while not loading unprofitable customers.”

Meanwhile, Telus reported its net income attributable to common shares more than doubled during its third quarter.

The telecommunications company said it earned $280 million, up 105.9 per cent from the same three-month period in 2023. Earnings per diluted share for the quarter ended Sept. 30 was 19 cents compared with nine cents a year earlier.

It reported adjusted net income was $413 million, up 10.7 per cent year-over-year from $373 million in the same quarter last year. Operating revenue and other income for the quarter was $5.1 billion, up 1.8 per cent from the previous year.

Mobile phone average revenue per user was $58.85 in the third quarter, a decrease of $2.09 or 3.4 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.

It said customers are increasingly adopting unlimited data and Canada-U.S. plans which provide higher and more stable ARPU on a monthly basis.

“In a tough operating environment and relative to peers, we view Q3 results that were in line to slightly better than forecast as the best of the bunch,” said RBC analyst Drew McReynolds in a note.

Scotiabank analyst Maher Yaghi added that “the telecom industry in Canada remains very challenging for all players, however, Telus has been able to face these pressures” and still deliver growth.

The Big 3 telecom providers — which also include Rogers Communications Inc. and BCE Inc. — have frequently stressed that the market has grown more competitive in recent years, especially after the closing of Quebecor Inc.’s purchase of Freedom Mobile in April 2023.

Hailed as a fourth national carrier, Quebecor has invested in enhancements to Freedom’s network while offering more affordable plans as part of a set of commitments it was mandated by Ottawa to agree to.

The cost of telephone services in September was down eight per cent compared with a year earlier, according to Statistics Canada’s most recent inflation report last month.

“I think competition has been and continues to be, I’d say, quite intense in Canada, and we’ve obviously had to just manage our business the way we see fit,” said French.

Asked how long that environment could last, he said that’s out of Telus’ hands.

“What I can control, though, is how we go to market and how we lead with our products,” he said.

“I think the conditions within the market will have to adjust accordingly over time. We’ve continued to focus on digitization, continued to bring our cost structure down to compete, irrespective of the price and the current market conditions.”

Still, Canada’s telecom regulator continues to warn providers about customers facing more charges on their cellphone and internet bills.

On Tuesday, CRTC vice-president of consumer, analytics and strategy Scott Hutton called on providers to ensure they clearly inform their customers of charges such as early cancellation fees.

That followed statements from the regulator in recent weeks cautioning against rising international roaming fees and “surprise” price increases being found on their bills.

Hutton said the CRTC plans to launch public consultations in the coming weeks that will focus “on ensuring that information is clear and consistent, making it easier to compare offers and switch services or providers.”

“The CRTC is concerned with recent trends, which suggest that Canadians may not be benefiting from the full protections of our codes,” he said.

“We will continue to monitor developments and will take further action if our codes are not being followed.”

French said any initiative to boost transparency is a step in the right direction.

“I can’t say we are perfect across the board, but what I can say is we are absolutely taking it under consideration and trying to be the best at communicating with our customers,” he said.

“I think everyone looking in the mirror would say there’s room for improvement.”

This report by The Canadian Press was first published Nov. 8, 2024.

Companies in this story: (TSX:T)

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TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:TRP)

The Canadian Press. All rights reserved.

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BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

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BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

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