Premarket action on Thursday had the three major U.S. indexes trading higher. The Dow Jones industrials were up 0.63%, the S&P 500 up 0.74% and the Nasdaq 1.12% higher.
All 11 market sectors closed lower Wednesday, with communications services (−4.13%) and utilities (−1.71%) posting the day’s largest losses. Real estate (−0.29) and health care (−0.31%) gave up the least. The Dow closed 0.61% lower, the S&P 500 down 1.11% and the Nasdaq down 1.68%. Two-year Treasuries dropped two basis points to close at 4.45%, and 10-year notes dipped by four basis points to 3.63%. Oil gained 1.3% and traded up by about 0.2% early Thursday morning at $78.77.
Wednesday’s trading volume was well below the five-day average. New York Stock Exchange losers led winners by 2,045 to 1,009, while Nasdaq advancers led decliners by about 2 to 1.
The weekly report on claims for unemployment benefits will be released before markets open Thursday morning. Economists estimate that 194,000 new claims were filed last week, up from 183,000 filed a week earlier. Continuing claims, which lag by a week, totaled 1.655 million in the week ending January 21, down by 11,000 from the prior week.
The University of Michigan consumer sentiment index is due out on Friday.
Among S&P 500 stocks, Fortinet Inc. (NASDAQ: FTNT) added 10.9% on Wednesday after hammering earnings estimates. The cybersecurity company reported earnings per share were up 76% year over year and revenue increased by 33%. First-quarter guidance was better than expected, too.
Lumen Technologies Inc. (NASDAQ: LUMN) plunged by 20.84% following a dismal earnings report and weak guidance. Absent its former high dividend, which the company last paid in August 2022, Lumen’s stock has fallen by nearly two-thirds.
The award for most expensive product introduction of all time has been snared by Alphabet Inc. (NASDAQ: GOOGL). The company’s artificial intelligence (AI) chatbot, Bard, was hastily announced on Monday and, in a promotional video released at an event in Paris Wednesday, Bard muffed a question. To get the full experience, click on the Play button in this tweet:
Misinformation at scale; bullshit as a service.
(The European Very Large Telescope- not the JWST – took the first optical photograph of an exoplanet in 2004.) https://t.co/J4mJMPORQe
— Grady Booch (@Grady_Booch) February 8, 2023
That answer cost Alphabet about $100 billion in market cap.
To be fair, Microsoft Corp. (NASDAQ: MSFT) stole Alphabet’s thunder by sneaking in its own AI-enabled Bing search engine on Tuesday and the search giant had to put its demo together in a hurry. A Google spokesperson issued a comment:
This highlights the importance of a rigorous testing process, something that we’re kicking off this week with our Trusted Tester program. We’ll combine external feedback with our own internal testing to make sure Bard’s responses meet a high bar for quality, safety and groundedness in real-world information.
Meanwhile, in the mostly real world, former Twitter board chair and co-CEO of Salesforce, Bret Taylor, announced on LinkedIn Wednesday that he and Clay Bavor, vice-president of Google’s experimental division, Google Labs, will begin next month “to create a new company to apply AI to solve some of the most important problems in business.”
Taylor was chair at Twitter when Tesla CEO Elon Musk offered to buy Twitter for $44 billion. When Musk tried to escape, Taylor was the guy who sued Musk to force him to pay up.
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Taylor won and the rest of us lost. Wednesday’s installment of Twitter’s impending doom began with the shutdown of the social media’s free API. That broke a number of services and, probably, was responsible for some Twitter users receiving a message that they had reached their daily limit of tweets or had too many followers. Stuff like this happens when a company fires two-thirds of its workforce.
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