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Stock market news today: Stocks plummet, yields fall amid Credit Suisse turmoil

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U.S. stock were sharply lower Wednesday morning as two economic prints showed a slowdown in February, coupled with fresh turmoil at Credit Suisse (CS) that weighed on sentiment.

The S&P 500 (^GSPC) plunged 1.4%, while the Dow Jones Industrial Average (^DJI) fell 1.6%. Contracts with the technology-heavy Nasdaq Composite (^IXIC) dropped 1%.

Bond yields fell. The yield on the benchmark 10-year U.S. Treasury note moved down to 3.4% Wednesday morning from 3.6% Tuesday. On the front end of the yield curve, two-year yields fell to 3.8%. Oil fell to new lows on the year, with WTI falling more than 4% to below $70 a barrel.

All three major indexes rallied Tuesday as crucial inflation data came in line with expectations. The S&P 500 closed up 1.7%, while the Nasdaq climbed 2.3%, marking the index’s best day in five weeks. Shares of regional banks rebounded, clawing back some of the recent losses.

But fresh troubles at Credit Suisse injected more jitters into markets Wednesday. The European bank’s stock fell more than 20%, plunging to a record low after its biggest backer said it could not provide any more assistance. Credit Suisse on Tuesday disclosed in a report that it had identified “material weaknesses” in controls over financial reporting.

On the economic data side in the U.S., the Commerce Department said retail sales fell 0.4% over the last month, in line with the economist consensus complied by Bloomberg. Meanwhile, February’s producer-price index, which measures what suppliers are charging businesses, dropped 0.1% in an unexpected decline.

Wednesday’s data came after Tuesday’s release of the closely watched Consumer Price Index (CPI), which the Commerce Department said rose 6.0% in February over the last year, the smallest increase since September 2021. In the same survey, core CPI, which strips out food and energy, grew 5.5%, also in line with expectations.

The sudden collapse of Silicon Valley Bank and Signature Bank, as well as the emerging turmoil at Credit Suisse, comes at a time when the economy grapples with stickier, if declining, inflation. It has sparked the debate among traders betting on whether or not the Fed will hike interest rates after its meeting next week.

Ryan Sweet, Chief US Economist at Oxford Economics, said as stress is contained mostly in regional banks, his team expects a quarter-percentage-point rate increase following the Fed’s upcoming March meeting.

“With inflation continuing to run well above the 2% target, a pause in the tightening cycle or a rate cut would be premature,” Sweet wrote. “Policymakers can use tools other than interest rates to alleviate pressures in the banking system.”

A similar sentiment came from William Blair’s macro analyst Richard de Chazal, who said in light of current events a quarter-point increase will probably be deemed “more prudent.”

The banking sector received a vote of no confidence Tuesday as Moody’s downgraded the entire U.S. sector’s outlook from stable to negative, citing “the rapid deterioration in the operating environment.”

Bank sentiment continued to be sour for members of the KBW Bank index (^BKX), as the index sank Wednesday. Large-cap index members including Bank of America (BAC), JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C) all traded down Wednesday, however.

Renewed jitters remained in the banking sector regional bank stocks on Wednesday — First Republic Bank (FRC), Western Alliance Bancorporation (WAL), PacWest Bancorp (PACW), Regions Financial (RF), and Zions Bancorporation (ZION) — all traded downward.

A logo is pictured on the Credit Suisse bank in Geneva, Switzerland, February 22, 2023. REUTERS/Denis Balibouse/

Here are other stocks trending on Yahoo Finance:

  • Credit Suisse (CS):The bank’s top shareholder ruled out offering further financial assistance to the lender. The shareholder cited regulatory concerns as the reason behind not being open to injecting more capital into the bank.
  • UBS Group AG (UBS): UBS chief executive officer Ralph Hamers said he will not answer any “hypothetical questions” following the turmoil at his rival Credit Suisse, Bloomberg reported.
  • Meta Platforms (META): Meta announced another 10,000 layoffs. The recruitment team is among those most affected by the job cuts, as the company plans to close 5,000 vacancies it had yet to fill. Citi boosted its target price to $260 from $228.
  • AMC Entertainment (AMC): The company said given a preliminary tally shareholders voted in favor of increasing the firm’s stock authorization and converting AMC Preferred Equity Units into common shares.
  • SentinelOne, Inc. (S): The cybersecurity company reported fourth quarter earnings that showed total revenue increased 92% to $126.1 million, up from the year before when it came in at $65.6 million.
  • 3M Company (MMM): The stock is trading lower ahead of the company’s investor day event.
  • Advanced Micro Devices (AMD): The stock outperformed on Tuesday overall for large-cap technology stocks, following three straight days of declines.

On the earnings front, Adobe (ADBE); Oatly (OTLY); UiPath (PATH); Five Below (FIVE) will report quarterly results on Wednesday.

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv

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Japan’s SoftBank returns to profit after gains at Vision Fund and other investments

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TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.

Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.

Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).

SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.

The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.

WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.

SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.

SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.

SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.

The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.

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Yuri Kageyama is on X:

The Canadian Press. All rights reserved.

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Trump campaign promises unlikely to harm entrepreneurship: Shopify CFO

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Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.

“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.

“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”

Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.

On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.

If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.

These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.

If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.

However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.

He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.

“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.

Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.

The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.

Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.

Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.

Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.

Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.

Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”

In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.

“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.

This report by The Canadian Press was first published Nov. 12, 2024.

Companies in this story: (TSX:SHOP)

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RioCan cuts nearly 10 per cent staff in efficiency push as condo market slows

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TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.

The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.

The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.

RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.

The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.

RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.

This report by The Canadian Press was first published Nov. 12, 2024.

Companies in this story: (TSX:REI.UN)

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