U.S. stocks plunged Thursday as December’s sell-off intensified after a fleeting rally in the previous session.
The S&P 500 (^GSPC) closed down 1.4% after dropping as much as 2.8% in afternoon trading, while the Dow Jones Industrial Average (^DJI) shed 350 points, or 1%. The technology-heavy Nasdaq Composite (^IXIC) tumbled 2.2%.
Losses picked up after veteran hedge fund manager David Tepper said in a televised interview with CNBC that he is “leaning short on the equity markets” over concerns rising interest rates will further batter stocks.
Poor results from Micron Technology (MU) also soured the mood. The largest U.S. manufacturer of memory chips warned of a glut in the semiconductor market and forecast a wider-than-expected second-quarter loss as a result. The company revealed a series of cost-cutting measures to help offset an expected drop in revenue, including a 10% reduction in its workforce. Shares fell 3.4% on Thursday.
Tesla’s stock (TSLA) cratered 8.9%, deepening steep declines for the electric vehicle giant, which is now down more than 68% this year.
Selling pressures have intensified for Tesla this month, with investors concerned that CEO Elon Musk’s management of Twitter was distracting him from leadership responsibilities at the electric carmaker. According to Bloomberg, 10 analysts have cut their price targets on the stock since last week.
On Thursday morning, the company also said it was offering U.S. consumers a $7,500 discount on its two highest-volume models before year-end, a move seen as an attempt to tackle waning demand.
AMC’s (AMC) stock sank 7.5% Thursday after the cinema operator proposed a reverse stock split and a conversion of its preferred equity units into common shares. AMC was halted for volatility in the early minutes of trading.
CarMax (KMX) shares fell 3.6% after the company reported an 86% drop in third-quarter profit, while indicating it was also halting share buybacks, pausing hiring and cutting expenses.
Meanwhile, Under Armour (UA) named Marriott International President Stephanie Linnartz its next chief executive officer, concluding a seven-month search for a new leader. Linnartz, who was one of 60 candidates under consideration, is expected to assume the post Feb. 27, according to the company. Under Armour’s stock edged down 1.7% Thursday.
The moves come after all three major averages booked gains of at least 1.5% on Wednesday, boosted by a rebound in consumers’ attitudes on the economy and upbeat earnings from Nike (NKE) that temporarily curbed fears around the corporate outlook.
On the economic data front, filings for unemployment insurance ticked up slightly to 216,000 in the week ended Dec. 17, the Labor Department said Thursday, a modest increase from the prior week’s upwardly revised 214,000.
In commodities markets, oil prices swung ahead of wintry weather in the U.S. and forecasts of a storm moving toward North America. West Texas Intermediate (WTI) crude futures – the U.S. benchmark – closed down at $78.26 after rising earlier in the day.
“Energy stocks again have a spring in their step, thanks to a rise in crude prices for the fourth straight session amid expectations of higher demand over the holiday period,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said in an emailed note. “But gains are being capped by concerns lingering in the background about world economic prospects next year.”
NEW YORK, NEW YORK – DECEMBER 21: Traders work on the floor of the New York Stock Exchange during afternoon trading. (Photo by Michael M. Santiago/Getty Images)
In cryptoworld, events in the saga of fallen cryptocurrency exchange FTX continued to unfold. FTX co-founder and former CTO Gary Wang and former Alameda Research CEO Caroline Ellison pleaded guilty late Wednesday to charges related to their roles in fraud that contributed to the collapse of the company.
Disgraced former FTX CEO Sam Bankman-Fried was released on $250 million bail Thursday afternoon while he awaits trial on fraud charges related to the collapse of his crypto exchange.
Investors are waiting to see whether a Santa Claus rally — a seasonal rise in the stock market that tends to occur around the end of December – will happen this year. But a downbeat month so far plagued by worries over inflation, rising interest rates, and the likelihood of a recession have thrown a wrench in hopes for year-end gains.
“We think the economy and the markets are merely recalibrating to higher interest rates and to slower growth,” BMO Wealth Management Chief Investment Strategist Yung-Yu Ma said in a note, pointing to record stimulus and economic momentum in 2021 that led to higher inflation.
“All that reversing a created year in 2022 where there was really a pullback.” Ma said. “As a result, we expect 2023 to be a recalibration to what we consider normal times.”
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.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
