Stocks ended the session lower on Tuesday, with Wall Street taking a breather from a three-session win streak, with investors digesting the gradual relaxation of coronavirus lockdowns and the latest batch of corporate earnings.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="On Monday, a trifecta of good news powered the Dow and S&P 500 Index to their best day in over a month. Yet stocks took a leg lower on Tuesday after a report late in the trading day questioned the significance of the data Moderna (MRNA) provided in assessing its experimental COVID-19 vaccine candidate. The positive results initially sent stocks on a tear, and fed optimism about a recovery from the ravages of the pandemic.” data-reactid=”18″>On Monday, a trifecta of good news powered the Dow and S&P 500 Index to their best day in over a month. Yet stocks took a leg lower on Tuesday after a report late in the trading day questioned the significance of the data Moderna (MRNA) provided in assessing its experimental COVID-19 vaccine candidate. The positive results initially sent stocks on a tear, and fed optimism about a recovery from the ravages of the pandemic.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Home Depot (HD) weighed on the Dow, after the home-improvement giant reported weaker than expected quarterly profit. This came alongside declines in Walmart (WMT), which fell by the end of the session despite beating expectations for quarterly results after consumers flocked to the company’s grocery and home-goods delivery and pick-up services during the pandemic. The stock flirted with a new 52-week high before ending the session more than 2% lower.” data-reactid=”19″>Home Depot (HD) weighed on the Dow, after the home-improvement giant reported weaker than expected quarterly profit. This came alongside declines in Walmart (WMT), which fell by the end of the session despite beating expectations for quarterly results after consumers flocked to the company’s grocery and home-goods delivery and pick-up services during the pandemic. The stock flirted with a new 52-week high before ending the session more than 2% lower.
During the session, Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin failed to create any fireworks in testimony that lasted over two hours. However, both men reiterated the government’s policy support for a U.S. economy in which the risks remain firmly tilted toward the downside.
“Investors did not learn anything groundbreaking with respect to the Fed’s and US government policy response to COVID-19,” said Edward Moya, senior Market Analyst at OANDA.
“The wait-and-see economy is here and it seems the reopening of the economy will need to unfold before we can start to speculate on how much more stimulus will come into play,” he added.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="States and cities are gradually relaxing restrictions that have sent the economy into a tailspin. The cautious moves have been enough to spark market hopes for a relatively brisk economic revival, and along with the potential for an effective COVID-19 treatment, have been enough to blunt the impact of ugly U.S. economic data.” data-reactid=”23″>States and cities are gradually relaxing restrictions that have sent the economy into a tailspin. The cautious moves have been enough to spark market hopes for a relatively brisk economic revival, and along with the potential for an effective COVID-19 treatment, have been enough to blunt the impact of ugly U.S. economic data.
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<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="4:04 p.m. ET: Stocks end lower as investors take breather after 3-day rally” data-reactid=”25″>4:04 p.m. ET: Stocks end lower as investors take breather after 3-day rally
Here were the main moves in markets as of 4:04 p.m. ET:
Gold (GC=F): +$12.60 (+0.73%) to $1,747.00 per ounce
10-year Treasury (^TNX): -3.3 bps to yield 0.7110%
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3:12 p.m: Moderna drops more than 9% after report questions vaccine data
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Moderna (MRNA) shares dropped 9%, paring some of Monday’s surge, after STAT News published an article citing experts who suggested “we ought to take the early readout” from the company’s vaccine Phase 1 trial “with a big grain of salt.”” data-reactid=”36″>Moderna (MRNA) shares dropped 9%, paring some of Monday’s surge, after STAT News published an article citing experts who suggested “we ought to take the early readout” from the company’s vaccine Phase 1 trial “with a big grain of salt.”
The three major indices also dipped following the report, with the Dow falling more than 200 points.
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2:45 p.m. ET: Crude oil settles at two-month high
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="July futures for West Texas intermediate crude oil (CL=F) settled higher by 2.1% to $32.50 per barrel on Tuesday, hitting the highest level in two months. The move higher marked the fourth straight settlement higher for the commodity, which has gained 64% since May 1 as fears of dried up demand and an oversupplied market eased. However, WTI crude remains about 46% lower for the year to date.” data-reactid=”40″>July futures for West Texas intermediate crude oil (CL=F) settled higher by 2.1% to $32.50 per barrel on Tuesday, hitting the highest level in two months. The move higher marked the fourth straight settlement higher for the commodity, which has gained 64% since May 1 as fears of dried up demand and an oversupplied market eased. However, WTI crude remains about 46% lower for the year to date.
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12:17 p.m. ET: Stocks mixed as session rolls on
Here were the main moves in markets, as of 12:17 p.m. ET:
S&P 500 (^GSPC): -3.64 points (+0.12%) to 2,957.55
10:26 a.m. ET: Mnuchin expects ‘economic conditions to improve’ in second half of the year
Treasury Secretary Steven Mnuchin said Tuesday he anticipates “economic conditions to improve in the third and fourth quarters” this year. Mnuchin spoke during testimony alongside Federal Reserve Chair Jerome Powell before the U.S. Senate Banking Committee Tuesday morning.
The Coronavirus Aid, Relief and Economic Security Act (CARES) Act has already unleashed some $200 billion in credit support so far for businesses and individuals amid the pandemic, and has still more capital “to expand these as needed,” Mnuchin added.
Shortly thereafter, Mnuchin added, “We are fully prepared to take losses in certain scenarios” from funds that are yet to be distributed as part of the CARES Act.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Luckin Coffee (LK) disclosed Tuesday it received a delisting notice from the Nasdaq on May 15, with the exchange citing “public interest concerns as raised by the fabricated transactions disclosed by the Company in a Form 6-K on April 2, 2020.”” data-reactid=”58″>Luckin Coffee (LK) disclosed Tuesday it received a delisting notice from the Nasdaq on May 15, with the exchange citing “public interest concerns as raised by the fabricated transactions disclosed by the Company in a Form 6-K on April 2, 2020.”
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Luckin Coffee, a Chinese company once viewed as a competitor to Starbucks, had said earlier in April it found employees including its former chief operating officer fabricated hundreds of millions in sales in financial results last year.” data-reactid=”63″>Luckin Coffee, a Chinese company once viewed as a competitor to Starbucks, had said earlier in April it found employees including its former chief operating officer fabricated hundreds of millions in sales in financial results last year.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The company said in a statement it “plans to request a hearing” and will remain listed on the Nasdaq for the time being, pending the outcome of the hearing.” data-reactid=”64″>The company said in a statement it “plans to request a hearing” and will remain listed on the Nasdaq for the time being, pending the outcome of the hearing.
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9:31 a.m. ET: Stocks open slightly lower after weak economic data, mixed earnings
Here were the main moves in markets, as of 9:31 a.m. ET:
S&P 500 (^GSPC): -7.77 points (-0.26%) to 2,946.14
8:30 a.m. ET: Housing starts hit lowest level since 2015 in April
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Housing starts tumbled more than expected in April, signaling a persistently tough housing market amid the coronavirus pandemic.” data-reactid=”77″>Housing starts tumbled more than expected in April, signaling a persistently tough housing market amid the coronavirus pandemic.
New housing starts fell by 30.2% over March to a seasonally adjusted annual rate of 891,000, or the lowest level since February 2015. Consensus economists had expected housing starts to drop by 26% to 900,000. March’s starts were revised up to 1.276 million, constituting an 18.6% decline over the prior month.
Building permits, which serve as a proxy for future home-building, also fell in April over March, but at a slower pace than expected. These dropped 20.8% to a seasonally adjusted annual rate of 1.074 million, versus a drop of nearly 26% to 1 million expected. This extended a 5.7% month-over-month decline in building permits in March.
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7:43 a.m. ET: Stock futures hug the flat line, paring earlier losses after mixed earnings
Here were the main moves in markets, as of 7:43 a.m. ET Tuesday:
S&P 500 futures (ES=F): down 3.25 points, or 0.11%, to 2,944.75
Dow futures (YM=F): up 8 points, or 0.03%, to 24,515.00
Nasdaq futures (NQ=F): up 11.25 points, or 0.12%, to 9,336.75
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Home Depot (HD) reported stronger than expected quarterly comparable sales growth, with this metric rising 6.4% versus 4.5% expected.” data-reactid=”89″>Home Depot (HD) reported stronger than expected quarterly comparable sales growth, with this metric rising 6.4% versus 4.5% expected.
However, the home improvement giant’s bottom-line results missed expectations, with earnings per share of $2.08 short of estimates by 17 cents, and EBITDA falling about 11% over last year. This came as Home Depot incurred pre-tax expenses of about $850 million to roll out coronavirus-related new measures to support associates, including adding additional paid time off and weekly bonuses for hourly workers in stores and distribution centers.
Home Depot also joined a host of other companies in withdrawing its full-year guidance, citing a lack of visibility due to the coronavirus.
“While sales trends were strong at the end of the first quarter and into the first two weeks of the second quarter, as a result of the uncertainty related to the duration of Covid-19 and its impact on the broader economy, the Company is suspending its previously communicated fiscal 2020 guidance,” the company said in a statement.
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7:23 a.m. ET: Walmart posts better than expected Q1 sales, profit; stock nears record high
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Walmart (WMT) posted first-quarter results that topped consensus expectations on both the top and bottom lines, as the retailer benefited from a consumer run on home goods sparked during the coronavirus pandemic.” data-reactid=”95″>Walmart (WMT) posted first-quarter results that topped consensus expectations on both the top and bottom lines, as the retailer benefited from a consumer run on home goods sparked during the coronavirus pandemic.
Adjusted earnings per share of $1.18 on revenue of $134.6 billion each beat estimates, which were for adjusted EPS of $1.12 and sales of $132.48 billion. U.S. comparable same-store sales, excluding gas, grew 10%, or better than the 8.6% rise expected.
E-commerce sales surged 74% during the first-quarter, with both online grocery pickup and delivery services contributing to the gain.
Shares of Walmart jumped about 5% to about $134 per share shortly after reporting results. The gains, if held into the regular session, would mark a fresh record high for the stock.
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7:09 a.m. ET Tuesday: Stock futures slip, indicating lower open
Here were the main moves in markets, as of 7:11 a.m. ET Tuesday:
S&P 500 futures (ES=F): down 11.5 points, or 0.39%, to 2,936.50
Dow futures (YM=F): down 90 points, or 0.37%, to 24,417.00
Nasdaq futures (NQ=F): down 12.25 points, or 0.13%, to 9,313.25
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.
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.
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.
