The three major U.S. equity indexes closed lower Wednesday. The Dow Jones industrials ended the day down 0.12%, the S&P 500 closed 0.83% lower and the Nasdaq retreated 1.54%. Nine of 11 sectors closed lower, with energy (−2.15%) and consumer cyclicals (−1.46%) down the most. Utilities (0.87%) and consumer staples (0.46%) posted the only gains.
The Census Bureau reported Thursday morning that housing starts totaled 1.425 million in October, down from a revised September estimate of 1.488 million. New building permits issued totaled 1.526 million, down from a revised September total of 1.564 million. That is not good news for the economy. The weekly report on initial claims for unemployment benefits showed 222,000 new claims filed in the week, down 4,000 from the prior week. Continuing claims rose for the week ending November 5 to 1.507 million, up 13,000 from an upwardly revised total of 1.494 million in the prior week.
The three major indexes traded lower about 30 minutes before the opening bell. The Dow was down 1.02%, the S&P 500 was lower by 0.89%, and the Nasdaq was down 1.11%.
Cisco Systems Inc. (NASDAQ: CSCO) reported quarterly earnings after markets closed Wednesday that beat expectations on both the top and bottom lines. The company also issued guidance for the January quarter and the full 2023 fiscal year that was in line with analysts’ existing estimates. Cisco CEO Chuck Robbins also commented that the company would be “right-sizing,” and CFO Scott Herren translated that into a job cut of up to 5%, or around 4,200 people. Shares traded up more than 3% in Thursday’s premarket.
Macy’s Inc. (NYSE: M) reported October quarter results that beat earnings estimates by 63% and revenue estimates by 0.5%. The department store giant also raised fiscal 2023 guidance and maintained revenue guidance of $24.3 billion to $24.5 billion for the year. Macy’s upbeat report contrasts markedly with Target’s lackluster report released Wednesday. Shares traded up by about 7.5% in the premarket session Thursday.
Nvidia Corp. (NASDAQ: NVDA) missed the consensus earnings per share (EPS) estimate by 17% but beat the revenue estimate by about 2%. The chipmaker’s data center business carried the company’s other segments. Guidance for the current quarter was below expectations, but the good news is that the company’s year-long slide is likely to be behind it. Shares traded up more than 3% early Thursday, but the gain evaporated and shares traded down about 1.4% at last look.
Bath & Body Works Inc. (NYSE: BBWI) was up nearly 20% in Thursday’s premarket session, following its earnings release Wednesday afternoon. The company doubled its expected EPS gain and beat the revenue consensus by 3%. Current-quarter EPS and revenue guidance were in line with expectations.
Silvergate Capital Corp. (NYSE: SI) traded down nearly 13% in Thursday’s premarket. The holding company for Silvergate Bank will provide a mid-quarter update later in the morning, and investors are wary of the bank’s exposure to crypto following the collapse of FTX. In a statement last week, CEO Alan Lane said Silvergate’s exposure to FTX was limited to deposits. But, like a virus, the impact of FTX’s bankruptcy on other exchanges and crypto lenders is still being assessed. Silvergate’s update presentation is scheduled for 2:55 p.m. Thursday.
After U.S. markets close Thursday afternoon, Applied Materials, Gap, Palo Alto Networks and Ross Stores will report quarterly results. Foot Locker and JD.com are on deck to report results first thing Friday morning.
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