Premarket action on Friday had the three major U.S. indexes trading lower. The Dow Jones industrials traded down 0.06%, the S&P 500 was down 0.25% and the Nasdaq was 0.47% lower.
Ten of 11 market sectors closed higher Thursday, with energy (3.32%) and consumer cyclicals (2.03%) leading the way. Consumer staples (−0.28%) posted the day’s only loss. The Dow closed up 0.61%, the S&P 500 up 1.1% and the Nasdaq up 1.76%. Better-than-expected reports on gross domestic product and new claims for jobless benefits lifted markets at the opening bell and picked them back up mid-morning.
Tuesday’s trading volume was roughly on par with the five-day average. New York Stock Exchange winners led losers by 2,116 to 961, while Nasdaq advancers led decliners by more than 4 to 3.
Among S&P 500 stocks, electronic bond-trading platform Tesla Inc. (NASDAQ: TSLA) added 10.97% on a strong earnings report, while paint maker Sherwin-Williams Co. (NYSE: SHW) dropped 8.92% after issuing downside guidance.
Before U.S. markets open on Friday, the December report on personal consumption expenditures (PCE) will be released. Economists’ consensus forecasts call for an increase of 0.2% in personal income (up 0.4% in November) and no change in personal spending (up 1% in November). PCE prices are also expected to be unchanged, and core PCE inflation is expected to rise by 0.3% (versus down 0.3% in November) to around 4.4% year over year. The University of Michigan final reading of consumer sentiment is due out after markets open, and economists have forecast an index reading of 64.6, unchanged month over month.
Following Wednesday night’s earnings release, Tesla stock blasted off on Thursday. Since the beginning of January, Tesla shares have added 30%. They are still down more than 50% from their 52-week high of around $384 and traded down slightly in Friday’s premarket action. The company confirmed late Thursday that it would not be installing a second assembly line at its Shanghai plant. In a statement, the company said that “production and delivery challenges in 2022 were largely concentrated in China,” and because production in Shanghai has been running at full capacity for months, Tesla does not expect a “meaningful sequential volume increase in the near term.”
As hot as Tesla was on Thursday, Intel Corp. (NASDAQ: INTC) was on its way to being just as cold Friday. The semiconductor giant missed the earnings per share consensus estimate by 50%, and revenue was down year over year by nearly 32%. The really bad news was the company’s March-quarter revenue guidance. Intel forecast revenue for the quarter in a range of $10.5 billion to $11.5 billion, far below the consensus estimate of $13.93 billion. The company did not provide full-year guidance, telling Barron’s that economic uncertainty makes longer-term forecasts impossible. As of Thursday’s close, Intel stock had gained 13.85% in January, although shares were down nearly 42% over the past 12 months. Premarket action had the shares down about 9.7%.
Bed Bath & Beyond Inc. (NASDAQ: BBBY) filed its unaudited quarterly financial report on Thursday, revealing that it had defaulted on certain debt and that there is now “substantial doubt about the Company’s ability to continue as a going concern for the next 12 months.” JPMorgan sent the notice of default on Wednesday. Bed Bath & Beyond owes JPMorgan and its partners some $550 million, and other outstanding debt totaled nearly $1.4 billion. According to the financial report, the company has $154 million available in cash and cash equivalents. The shares tumbled 22% Thursday but traded up about 0.4% in Friday’s premarket.
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