Stocks rise as investors await debt deal, AI hype lifts tech: Stock market news today
Stocks higher on Friday morning as investors waited for developments from Washington, D.C. on the debt-ceiling deliberations and digested the latest corporate earnings as a new wave of AI optimism boosted tech stocks.
Near 10:45 a.m. ET, all three major indexes were up more than 1% with the Nasdaq pacing gains.
The S&P 500 (^GSPC) was higher by 1.1%, the Dow Jones Industrial Average (^DJI) rose more than 300 points, or 1%, while the technology-heavy Nasdaq Composite (^IXIC) gained more than 1.6%.
The Nasdaq and S&P 500 were both on pace to log weekly gains with Friday’s rally.
On Friday morning, Reuters reported that President Joe Biden and Speaker of the House Kevin McCarthy are “closing in on a deal” to extend the government’s debt ceiling for two years.
“Negotiators appear to be closing in on an agreement,” Goldman Sachs’s economic research team led by Jan Hatzius wrote in a note to clients on Thursday night.
“While it is hard to predict when an announcement could come, we think the odds are highest that a deal is announced late Friday (May 26) or on Saturday (May 27). If so, this would likely allow a House vote late Tuesday (May 30) or Wednesday (May 31). The Senate also needs to pass the deal, though procedural obstacles there are unlikely to be what prevents timely enactment,” they added.
The Nasdaq rallied to close 1.7% higher on Thursday as Nvidia’s (NVDA) blowout quarter sent the chip giant’s stock soaring more than 24%.
Earnings continued to move stocks on Friday morning as well.
Marvell Technology (MRVL) stock rose more than 25% on Friday as the chipmaker joined Nvidia in sharing positive artificial intelligence news. Marvell believes its revenue attributable to AI could double in the next year.
“AI has emerged as a key growth driver for Marvell,” Marvell CEO Matt Murphy said in the company’s earnings release. “While we are still in the early stages of our AI ramp, we are forecasting our AI revenue in fiscal 2024 to at least double from the prior year and continue to grow rapidly in the coming years.”
Chip names including Broadcom (AVGO), Ambarella (AMBA), Skyworks (SWKS), and Micron (MU) were all up more than 3% on Friday. The PHLX Semiconductor Index (^SOX) was also up more than 3.5% on Friday.
Elsewhere on the earnings front, Gap (GPS) stock rose more than 10% after the apparel retailer posted a surprise profit late Thursday. Meanwhile, shares of Ulta Beauty (ULTA) fell nearly 10% after the company warned of slowing growth trends, even though the beauty store chain beat Wall Street’s revenue and earnings per share expectations for the first quarter.
“Category growth is healthy but moderating as we lap two years of unprecedented growth. And as category growth normalizes, promotional activity is increasing,” Ulta CEO Dave Kimbell said on the company’s earnings call.
On the economic data side, the PCE price index — the Federal Reserve’s preferred inflation measure — came in hotter than expected and flipped market expectations for the central bank’s next policy announcement on June 14.
Core PCE rose to 4.7% over last year in April, more than the 4.6% increase expected by economists and an acceleration from the 4.6% annual jump seen in March. Data from the CME Group as of Friday morning showed investors placing a 58% chance on the Fed raising rates by another 0.25% next month following this release.
“We will be sticking with the forecast for the Fed to keep rates unchanged through the remainder of this year,” Ryan Sweet, chief US economist at Oxford Economics, wrote on Friday. “However, odds are rising that we will be altering the forecast for the fed funds rate in 2024, reducing the number of rate cuts.”
Data on personal income and spending also showed consumers remained resilient in April with spending rising 0.8% last month, more than the 0.3% increase expected by economists. Durable goods orders also delivered a surprise with April’s preliminary reading showing an increase of 1.1% last month; economists had expected this data to show a 1% drop.
Consumer sentiment data for May from the University of Michigan, however, showed the debt ceiling standoff has dampened the economic outlook for many Americans, with sentiment dropping 4 points rom April.
“Consumer sentiment slid 7% amid worries about the path of the economy, erasing nearly half of the gains achieved after the all-time historic low from last June,” said Joanne Hsu, director of the survey of consumers.
“This decline mirrors the 2011 debt ceiling crisis, during which sentiment also plunged. This month, sentiment fell severely for consumers in the West and those with middle incomes. The year-ahead economic outlook plummeted 17% from last month.”
Josh is a reporter for Yahoo Finance.
Five former employees allege Edmonton construction firm ignored sexual misconduct in 'poisoned' workplace – CBC.ca
WARNING: This article contains graphic content and may affect those who have experienced sexual violence or know someone affected by it.
Five women are suing a prominent Edmonton home construction company for a combined $6.2 million, alleging a company partner’s sexual misconduct created a “poisoned” work environment where employees were subjected to harassment and complaints about workplace safety were ignored.
The claims allege that Coventry Homes failed to investigate allegations of sexual misconduct against sales director Robin Nasserdeen, even after he was charged by Edmonton police for sexually assaulting an employee — and that others who expressed concern about his conduct were pushed out of the company.
Each claim alleges that Coventry Homes fostered an unsafe work environment where employees were exposed to “harassment, sexual harassment, unwanted sexual solicitation, bullying, and discriminatory conduct.”
Nasserdeen denies the allegations in the civil suits and the allegation of sexual assault he faces in criminal court. A lawyer for Coventry Homes declined to comment.
Two of the women who seek damages allege they were sexually abused by Nasserdeen. They name him individually in their claims and allege the company’s negligence allowed for his misconduct.
The other three plaintiffs allege they were pushed out of their jobs for raising concerns about Nasserdeen’s behaviour and how the company was handling the allegations against him.
“Nasserdeen was an unfit executive but was provided with significant power and independence to oversee his female subordinates,” read the statements of claim from the two alleged victims of sexual abuse.
Nasserdeen, 42, is a primary shareholder in Coventry Homes, which has built hundreds of homes across the greater Edmonton area since it was established in 1976.
The company, one of the largest new home builders in the city, is involved in charitable partnerships and sponsorships, including with the Edmonton Oilers. Nasserdeen often serves as the face of the company, appearing in advertisements and interviews.
Companies need to realize, regardless of of the seniority of their employees, everybody has to follow the rules.-Matthew Fisher, labour lawyer
Matthew Fisher, a Toronto lawyer who specializes in employment law, says the allegations against Nasserdeen and Coventry Homes are egregious and, if proven, could be precedent-setting for workplace misconduct cases across Canada.
“The allegations that are made here suggest an organization that had some very, very serious problems from the top,” he said. “Companies need to realize, regardless of of the seniority of their employees, everybody has to follow the rules.”
Nasserdeen’s criminal trial could clear the way for a civil finding of liability, Fisher said.
“If the criminal trial finds guilt, I think there would be very little difficulty in showing that this workplace environment is not one that anyone should expect to endure,” he said.
“It very well could set a watermark for damages.”
None of the allegations, civil or criminal, have been proven in court. No statements of defence have been filed in the civil suits but are expected to be provided to the court by June 16.
Nasserdeen was charged by Edmonton police in April 2022 with one count of sexual assault. He has pleaded not guilty and is awaiting trial, with jury selection set to begin next February.
The charge was laid more than a year after former employee Jessica McNabb reported to police that she had been sexually assaulted.
McNabb, who worked as an area sales manager and reported to Nasserdeen, alleges that she was raped in a parking lot on the outskirts of Edmonton in March 2021 after he asked her to a work meeting.
McNabb, 32, alleges the work dinner began with Nasserdeen offering her shots of tequila. She tried to decline but Nasserdeen continued to order drinks and ask explicit questions, her statement of claim says.
My life has been forever changed.– Jessica McNabb
She alleges that one of her drinks was spiked and that Nasserdeen put her in the passenger seat of his vehicle before driving to a parking lot. She was groped, then assaulted repeatedly, the statement of claim says, adding that she lost consciousness more than once.
McNabb said the assault, and the way it was handled by her former employer, has left her traumatized — struggling with PTSD, anxiety and severe depression.
“My life has been forever changed,” McNabb told CBC. “I didn’t even want to live. I was a shell of a human being.”
McNabb reported the assault to police about two weeks later. She completed a rape kit at an Edmonton hospital where she was instructed to take medical leave.
She never returned to work.
“[McNabb] had no choice but to treat her employment as having been constructively terminated,” reads her statement of claim.
“Coventry Homes failed in its most basic obligation to ensure a safe workplace … and, in so doing, terminated the employment relationship.”
McNabb’s lawsuit, filed on March 15 of this year, is the first of five separate statements of claim filed in Edmonton Court of King’s Bench. The claims seek damages including wrongful dismissal, unsafe working conditions and mental suffering. The four other suits were filed on May 10.
While publication bans are customary in sexual assault cases, there is no court-ordered ban on the publication of McNabb’s name.
All five women, represented by the same lawyer, shared their stories with CBC.
Three allege they were constructively terminated. The term describes a situation in which the employer has failed to obey the employment contract in a significant way, forcing the employee to quit.
Two others allege wrongful termination — that their dismissals were in reprisal for voicing concerns about Nasserdeen and the company’s response.
McNabb said she and her former colleagues are hopeful their claims send a message about the importance of maintaining safe workplaces and investigating complaints of misconduct.
They want to hold Coventry Homes accountable, she said.
“We’re doing this to set precedents for them and other companies. They can’t turn a blind eye to this ugliness.”
McNabb said she feared no one would believe her. She hopes her refusal to stay silent will help survivors find their voices.
“This isn’t about the money,”‘ she said. “I want to be a light for others.”
Nasserdeen denies allegations
In a statement to CBC, Nasserdeen maintained his innocence.
“The claims of assault and harassment against me are false and the truth will come out,” he wrote in the statement. “I am eager to clear my name before the public at the appropriate time in a court of law.”
According to the statements of claim, after his arrest in April 2022, Nasserdeen sent an email to all Coventry Homes staff, explaining he was temporarily stepping away from his role to handle his legal issues.
“I have been as shocked as anyone by allegations that have been made against me,” Nasserdeen wrote, according to the claims.
“Unfortunately, rumours have also begun spreading at work and are disrupting our otherwise exemplary workplace.”
He returned to the workplace five months later.
The statements of claim say that on April 11, 2022, Coventry Homes CEO Henri Rodier sent a company-wide message to employees, describing an “allegation of misconduct” that had been made against Nasserdeen.
“We know Robin well, I know Robin well, given the interactions with both women and men at our company for the last 10 years,” Rodier wrote.
“For this reason, along with various factors, we have reason to take pause about her allegations.”
WATCH | Former employees talk about their experiences:
In June 2022, Edmonton police detectives provided a warning to company management that Nasserdeen had been charged with sexual assault.
“Despite assuring the Edmonton police that Nasserdeen would not be returned to the workplace until the conclusion of his criminal trial in February 2024, Coventry Homes returned Nasserdeen to the workplace on Sept. 12, 2022,” reads McNabb’s statement of claim.
In a statement to CBC, the Edmonton Police Service confirmed that Coventry Homes management was issued a warning about Nasserdeen in June 2022.
Alleged sexual coercion
One of the statements of claim was filed by Caitlin Garrioch, who says that after years of being harassed by Nasserdeen at work, she was coerced into having sex with him under threat of termination.
Garrioch, 38, said learning of the criminal allegation against Nasserdeen sent her spiralling.
Everything she had endured came into focus, she said in an interview.
She had worked for Coventry Homes for nearly a decade, reporting directly to Nasserdeen. She was “relentlessly targeted and harassed,” according to her statement of claim.
“I suffered for years, years,” Garrioch told CBC. “The type of control that he had over me, it’s unexplainable.”
Garrioch alleges the abuse began in the spring of 2016 after one of her clients made sexually suggestive comments to her. According to her statement of claim, she reported the remarks to Nasserdeen and he reacted by repeatedly telling her she had invited the comments upon herself.
Garrioch’s statement of claim alleges that Nasserdeen spoke often to Garrioch of his sexual exploits with Coventry Homes staff and made degrading comments about female employees.
It further alleges that Nasserdeen sent Garrioch a pornographic video and an image of his penis, pressured her to visit a sex shop during her work day, encouraged her to cheat on her husband and coerced her into sharing nude images of herself.
In the summer of 2018, over a work meeting at a café in west Edmonton, Nasserdeen threatened to terminate Garrioch if she refused to have sex with him, she alleges.
“Nasserdeen then threatened her with spreading sexual rumours about her,” her statement of claim says. “As a result of these clear threats … she felt compelled to comply with Nasserdeen’s demands.”
According to her statement of claim, Nasserdeen threatened Garrioch so she would delete evidence of the abuse and keep quiet.
In September 2022, Garrioch — then on medical leave — reported the abuse to a member of the executive management team at Coventry Homes, she said in her statement of claim.
Around Oct. 14, 2022, Garrioch again reported Nasserdeen, this time to an office manager, she alleges. She said she told the manager she was afraid to return to the office with Nasserdeen there, but alleges nothing was done.
“Instead of taking some responsibility for their actions, and the role that they play in women feeling safe at their company, they decide to ignore it,” she said in an interview.
“That is just absolutely unacceptable. And that’s why I think we’re all here.”
Garrioch alleges that due to the company’s failure to investigate, she was constructively terminated in November 2022. Her claim details how the abuse left her with emotional and psychological trauma, including anxiety and depression.
The other three women who have filed claims against Coventry Homes are Tessa Thomson, Anne Guenther and Kaitlyn Ross.
Thomson, 30, worked as a drafter for 18 months before she was placed on unpaid suspension in December 2022. She alleges she was constructively dismissed after being ridiculed and reprimanded for raising concerns about Nasserdeen’s conduct.
She said she wanted transparency from the company.
“I had a right to know who I was working for,” Thomson said. “I had a right to decide for myself whether I wanted to continue contributing to the success of a company that condones behaviour like this.”
Guenther, 37, worked as an estimator for more than a decade. She alleges she was terminated without cause in October 2022, 19 days after telling management she was scared of Nasserdeen.
Ross, 32, was an area sales manager for nearly three years. She alleges she was fired after raising concerns about Nasserdeen’s return to the office and criticizing the company’s “unwavering support” for him.
She alleges the company breached its own policies and endangered employees.
“The responsible thing to do would be to launch an investigation and they never did,” Ross said in an interview.
“Any woman who spoke out about how they felt with Robin Nasserdeen … they pushed them out. And the others were terminated, like myself.”
Support is available for anyone who has been sexually assaulted. You can access crisis lines and local support services through this Government of Canada website or the Ending Violence Association of Canada database. If you’re in immediate danger or fear for your safety or that of others around you, please call 911.
GDP: Economic growth beats expectations with 3.1% gain in Q1 – BNN Bloomberg
The Canadian economy grew at an annualized rate of 3.1 per cent in the first quarter of 2023, Statistics Canada reported Wednesday.
The latest data shows growth beat out the federal agency’s own forecast of 2.5 per cent for the quarter. A preliminary estimate suggests the economy grew by 0.2 per cent in April, after remaining flat in March.
The ongoing resilience in the economy will likely spur discussions of a potential rate hike, as the Bank of Canada is expected to make its next interest rate announcement next week.
The federal agency says growth in exports and household spending helped spur growth in the first quarter.
Meanwhile, slower inventory accumulations as well as declines in household investment and business investment in machinery and equipment weighed on growth.
The Canadian economy has managed to continue outperforming expectations, despite the Bank of Canada hoping high interest rates would cause a more profound pullback by consumers and businesses.
The household spending figures show spending up on both goods and services in the first three months of the year, after minimal growth in the previous two quarters.
However, the report notes disposable income fell for the first time since the fourth quarter of 2021. The federal agency says disposable income declined by one per cent, largely due to the expiration of government measures aimed at helping people cope with inflation.
The central bank paused its rate-hiking cycle earlier this year, keeping its key interest rate at 4.5 per cent — the highest it’s been since 2007.
But the central bank’s governor, Tiff Macklem, has signalled that the bank is still trying to figure out if interest rates are high enough to quash inflation.
The headline inflation rate ticked up slightly to 4.4 per cent in April, remaining well above the central bank’s two per cent target.
This report by The Canadian Press was first published May 31, 2023.
Stock futures slide with all eyes on debt-ceiling vote: Stock market news today – Yahoo Canada Finance
US stocks were lower Wednesday morning as investors kept a watchful eye on the prospects for the debt-limit deal in an expected House floor vote later. Meanwhile, China’s economic woes pressured global markets.
The S&P 500 (^GSPC) dropped 0.52% while the Dow Jones Industrial Average (^DJI) dipped 0.69% or more than 200 points. The technology-heavy Nasdaq Composite (^IXIC) slipped 0.13% at 10:06 am ET.
US bond yields weakened as investors fretted over the potential impact of the debt-limit deal and braced for the release of fresh jobs data. The yield on the benchmark 10-year Treasury dropped to 3.68%. The two-year note yield slipped to 4.4%, while that on the 30-year bond dropped to 3.9%.
The debt ceiling agreement negotiated by President Joe Biden and House Speaker Kevin McCarthy passed its first key test on Tuesday when it gained approval from the Republican-led House Rules Committee despite opposition from hard-liners. That cleared the way for the deal to go before the House on Wednesday.
The clock is ticking down, as Congress must race to pass the deal to avoid a catastrophic default by June 5. That so-called X-Date is when the US will run out of money to pay its bills, Treasury Secretary Janet Yellen has warned.
Hawkish comments from Federal Reserve officials posed a headwind for Wall Street. Federal Reserve Bank of Richmond President Thomas Barkin said Tuesday he’s looking for signs that demand is cooling to be convinced that inflation will ease, speaking at a National Association for Business Economics event.
Meanwhile, Federal Reserve Bank of Cleveland President Loretta Mester, president of the Federal Reserve Bank of Cleveland, said she sees no “compelling reason” to pause interest-rate increases amid the debt-limit deal, speaking in a Financial Times interview published Wednesday.
Fed officials Patrick Harker, Susan Collins, and Michelle Bowman are expected to speak publicly later Wednesday.
In light of recent economic data, markets are pricing in an increase of 25 basis points in interest rates from the Fed at policymakers’ meeting on June 13-14.
Elsewhere, China’s factory activity slumped to its weakest level for a second straight month, another sign its post-pandemic economic recovery is losing steam. Asian markets tumbled after the release of the data.
Wednesday’s economic docket brought the latest on the number of job openings. Data from the US Bureau of Labor Statistics reported that the number of open jobs in the US edged up to 10.1 million. Economists polled by Bloomberg had expected 9.4 million openings.
On the housing front, mortgage demand dropped to its lowest level since March, while refinancing activity also dampened to another low, the MBA data showed Wednesday.
In US equities, the run-up in stocks linked to AI was losing momentum, after the buzz around the technology helped boosted the Nasdaq 100 Index (^NDX) on Tuesday. Shares of ChargePoint Holdings, Inc. (CHPT) slipped, while C3.ai, Inc. (AI) dipped more than 6% Wednesday.
In single-stock moves, SoFi Technologies, Inc. (SOFI) shares rallied more than 4% in the wake of the debt ceiling deal. The bill would reinstate government student loan repayments, benefiting the online personal finance company.
Shares of HP Inc. (HPQ) sank more than 5% after the computing giant posted better-than-expected quarterly earnings on Tuesday, but reported sales that fell more than analysts estimated.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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