Premarket action on Thursday had the three major U.S. indexes trading higher. The Dow Jones industrials were up 0.54%, the S&P 500 up 0.48% and the Nasdaq 0.71% higher.
Ten of 11 market sectors closed lower on Wednesday. Technology (1.73%) was the day’s only winner. Utilities (−2.37%) and industrials (−1.87%) had the worst losses. The Dow closed down 0.68% and the S&P 500 down 0.38%, while the Nasdaq closed up 0.47% on Wednesday.
Two-year Treasuries added four basis points to end Wednesday at 3.9%, and 10-year notes rose by three basis points to close at 3.43%. In Thursday’s premarket, two-year notes were trading at around 3.97% and 10-year notes at about 3.46%.
Wednesday’s trading volume was above the five-day average. New York Stock Exchange losers outpaced winners by 1,969 to 1,011, while Nasdaq decliners led advancers by more than 3 to 2.
Before U.S. markets open on Thursday, 100 companies are scheduled to report quarterly results. After markets close, another 82 are expected to report quarterly earnings.
U.S. crude oil inventories dropped by more than 5 million barrels last week, but the decline did not push crude prices higher. West Texas Intermediate closed down about 3.6% on Wednesday.
The U.S. Bureau of Economic Analysis releases its advance report on first-quarter gross domestic product before markets open Thursday. Economists’ consensus estimate calls for GDP growth of 2.0% in the quarter, down from a final reading of 2.6% in the fourth quarter of last year. The GDP deflator, a measure of the impact of price levels on GDP, is expected to show a year-over-year increase of 3.7%, slightly better than the 3.9% increase in the fourth quarter.
The U.S. Department of Labor also reports claims for unemployment benefits before markets open on Thursday. The consensus estimate calls for new claims to total 245,000, flat with the prior week. Continuing claims for the week ending April 8 totaled 1.865 million, an increase of 61,000 from the previous week.
Wednesday’s best performer among S&P 500 companies was Chipotle Mexican Grill Inc. (NYSE: CMG). Shares added 12.91% to post an all-time high share price of $2,047.31 early in the trading session. The fast-food chain beat earnings expectations by more than 10% and nearly doubled profits compared to the first quarter of last year.
Microsoft Corp. (NASDAQ: MSFT) closed with a gain of 7.24% on Wednesday after reporting earnings late Tuesday that handily beat estimates and offering an outlook for more growth to come.
First Republic Bank (NYSE: FRC) was Wednesday’s big loser, dropping 29.75%. Neither the consortium of banks that coughed up $30 billion to save the bank from collapse during last month’s crisis nor federal regulators appears to want to make the first move in getting the troubled bank back on its feet.
After markets closed on Tuesday, Meta Platforms Inc. (NASDAQ: META) beat top-line and bottom-line estimates as revenue bounced to year-over-year growth after three quarters of year-over-year shrinkage. Advertising revenue growth, alongside thousands of previously announced job cuts, offers investors a potent combination for profit growth going forward. The owner of Facebook, Instagram and WhatsApp also raised its revenue estimate for the second quarter to a range of $29.5 billion to $32 billion.
Walt Disney Co. (NYSE: DIS) has had just about enough of Florida Governor Ron DeSantis’s attempts to befoul the Magic Kingdom. The dispute between Disney and DeSantis began when the governor tried to change the leadership of a committee that is controlled by Disney and provides services to the company’s Disney World property after Disney objected to Florida’s “don’t say gay” legislation was passed with DeSantis’s full-throated support.
According to Disney’s complaint, DeSantis has launched a “targeted campaign of government retaliation” against the company “as punishment for Disney’s protected [right of free] speech [and] now threatens Disney’s business operations, jeopardizes its economic future in the region, and violates its constitutional rights.”
Then comes the money quote:
Disney regrets that it has come to this. But having exhausted efforts to seek a resolution, the Company is left with no choice but to file this lawsuit to protect its cast members, guests, and local development partners from a relentless campaign to weaponize government power against Disney in retaliation for expressing a political viewpoint unpopular with certain State officials.
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