Stocks tumbled and bond yields jumped Tuesday after data showed inflation may be more stubborn than Wall Street had expected.
The Nasdaq Composite traded 2% lower Tuesday afternoon, while the Dow Jones Industrial Average and the S&P 500 fell 1.8%.
Prices rose by 0.3% in January, putting the 12-month inflation rate at 3.1%, down from 3.4% in December. Core inflation, which strips out volatile food and energy prices, held steady at 3.9%, missing forecasts of a deceleration to 3.7%.
The yield on the 10-year Treasury note jumped to a 2-month high above 4.25%. The U.S. dollar soared along with yields.
Hope that rate cuts would come in March has faded in the wake of several strong economic reports and appeals for patience from Fed officials. Markets, which a month ago were pricing in a 77% chance of a cut in March, were forecasting only a 5% chance after Tuesday’s inflation data.
Coca-Cola (KO) stock ticked up in early trading after its quarterly sales came in above expectations, with higher prices offsetting lower sales volume.
An early morning rally lost steam in afternoon trading yesterday, sending the Nasdaq and S&P 500 lower.
Ecolab Stock Leads S&P 500’s Few Gainers After Earnings Beat
23 minutes ago
Shares of Ecolab (ECL) were higher Tuesday after the water and hygiene services provider edged past fourth-quarter earnings and sales expectations.
Ecolab reported adjusted net income of $445 million, or $1.55 per share, a more than 20% increase from the year-ago quarter. Revenue increased 7% to $3.94 billion. Both just narrowly surpassed the consensus among Wall Street analysts.
The company also offered upbeat earnings guidance, forecasting full-year adjusted earnings per share of between $6.10 and $6.50. That would represent a 17% to 25% increase over 2023.
Ecolab shares were up 8.8% Tuesday afternoon, putting them on track for their best day since November 2020. With Tuesday’s gains, Ecolab shares have gained 49% in the past year.
Hasbro Stock Falls as Sales Sink, and the Toy Maker Warns of More Declines Ahead
1 hr 22 min ago
Hasbro (HAS) shares fell Tuesday as the toy giant reported its revenue plunged and warned of slowing demand amid difficult economic conditions.
The maker of G.I. Joe and Star Wars toys posted an unadjusted loss of $7.64 per share for the fourth quarter, compared to a loss of 93 cents a year ago. Adjusted earnings per share (EPS) came in at 38 cents, well short of forecasts. Revenue sank 23% from a year earlier to $1.29 billion.
Sales at the company’s Entertainment segment cratered 49%, and sales at its Consumer Products unit were down 25%. Hasbro noted sales in its Wizards of the Coast and Digital Gaming segment grew 7%.
Hasbro said it anticipates full-year revenue for its Consumer Products unit falling 7% to 12%, with pro-forma Entertainment segment sales down $15 million, and revenue for the Wizards of the Coast and Digital Gaming segment sliding 3% to 5%. The company added that it has boosted its planned cost cuts by the end of 2025 to $750 million per year from the previous target of $350 million to $400 million per year.
Shares of Hasbro were 3% lower at $49.77 Tuesday afternoon. They’ve lost more than 15% of their value over the past year.
Coca-Cola’s Q4 Sales Pop as Higher Prices Offset Lower Volume in North America
2 hr 20 min ago
The Coca-Cola Company (KO) handily beat analyst estimates for sales in the fourth quarter.
Net income for the quarter fell about 3% from a year ago to $1.977 billion or 46 cents per diluted share. Excluding certain items and currency impact, adjusted earnings per share came in at 49 cents per diluted share, in line with analyst estimates compiled by Visible Alpha.
Sales revenue rose about 7% to $10.85 billion, driven by higher prices. Net of currency impact, organic revenues grew 12% on the back of 25% growth in Europe, the Middle East, & Africa; 23% in Latin America; and 13% in Asia Pacific. In North America, higher prices helped offset the impact of lower sales volume.
The company expects to grow its organic revenue by 6%-7% and adjusted EPS by 4%-5% in 2024 but said it faces a 4% currency headwind in the first quarter of the year.
Shares of Coca-Cola jumped in early trading before retreating to trade down about 0.8% at $59.21 early in the afternoon.
Biogen Tumbles as Drug Closeout Costs, Multiple Sclerosis Medicine Sales Weigh on Profit
3 hr 6 min ago
Biogen (BIIB) shares fell over 5% in early trading Tuesday after the biotech firm posted weaker-than-expected results, weighed down by costs for discontinuing a controversial Alzheimer’s drug, Aduhelm, and slowing sales of multiple sclerosis medicines.
The company reported fourth-quarter earnings per share (EPS) of $2.95, with revenue falling 6% from a year ago to $2.39 billion. Both missed estimates.
Biogen said that EPS was negatively impacted by 35 cents, related to previously disclosed closeout expenses for Aduhelm. Earlier this month, the company announced that it was discontinuing the development and commercialization of the treatment, which faced criticism about its effectiveness and costs.
Sales of Biogen’s multiple sclerosis treatments, the firm’s biggest revenue producer, slumped 8% to $1.17 billion as they faced stiffer competition.
Biogen shares were down 6.3% at $229.40 midday Tuesday. They have lost about one-fifth of their value over the past year.
TradingView
Tripadvisor Stock Jumps on News of Committee to Consider Deal Proposals
3 hr 42 min ago
Tripadvisor (TRIP) shares surged 13% Tuesday morning after the online travel review and advice company said that it had established a special committee to consider potential deal proposals, indicating its willingness to explore strategic opportunities.
According to a statement released on the company’s website, the special committee will comprise independent members of Tripadvisor’s board of directors and have a mandate to “evaluate any proposals that may be brought forward for a potential transaction, and any alternatives thereto, with regard to Tripadvisor.”
The company cautioned that no transaction was assured, and the committee “has not made any decisions with respect to a potential transaction.” It added that a possible deal would be subject to further checks and balances and require the approval of both the board and special committee.
Tripadvisor shares formed a double bottom pattern between May and November last year, before promptly reclaiming a key area of support around $17.10. Since then, the stock has continued its push higher apart from several modest retracements toward the 50-day moving average. If the price continues to climb, keep an eye out on the chart for a zone of resistance between $27 and $28 near the August 2022 and February 2023 swing highs.
Arista Networks Stock Slips After Less-than-Perfect Earnings, Forecast
4 hr 20 min ago
Shares of cloud networking company Arista Networks (ANET) slumped Tuesday morning after its quarterly earnings topped analysts’ estimates but failed to satisfy investors.
Arista reported net income of $614 million, or $1.92 per share, compared with earnings of $427 million, or $1.35 a share, in the year-ago quarter. Revenue grew nearly 21% year-over-year to $1.54 billion. Both sales and profit came in above the Wall Street consensus.
The company forecast current-quarter revenue of between $1.52 and $1.56 billion, about in line with analysts’ estimates. Adjusted gross margin is expected to contract slightly to 62%, down from 64.9% in the fourth quarter.
Expectations had been high heading into Arista’s earnings. Shares had doubled in the 12 months leading up to Tuesday, and were up more than 20% year-to-date.
The stock traded 4% lower at $269.73 Tuesday morning.
Bond Yields Soar as Traders Pare Rate Cut Bets
5 hr 21 min ago
Treasury yields soared on Tuesday morning after January consumer inflation data came in hotter than expected, leading traders to rein in their expectations for this year’s rate cuts.
The yield on the 10-year Treasury jumped above 4.25% for the first time in two months. The 2-year note soared past 4.9%.
And traders further pared their bets that the Fed will cut interest rates in the first half of this year. A month ago, federal funds rate futures trading data suggested markets were pricing in a 77% chance of a rate cut at the Fed’s March meeting. After Tuesday’s data, those odds stood at just 5%.
Even a May rate cut is looking less and less likely. A month ago, markets saw a 0% chance of the federal funds rate staying at its current 22-year high in May. Traders now see a 60% chance of that.
Stocks Making the Biggest Moves Premarket
5 hr 54 min ago
Gains:
- ZoomInfo Technologies Inc. (ZI): Shares of the sales and marketing software maker jumped 16% after it topped Wall Street estimates with its quarterly earnings and sales.
- JetBlue Airways Corp. (JBLU): Shares of the airline surged more than 12% after activist investor Carl Icahn revealed a 10% stake in the company.
- TripAdvisor Inc. (TRIP): Shares of the online travel company jumped more than 11% after the company said it had formed a committee of directors to evaluate “any proposals that may be brought forward for a potential transaction.”
Losses:
- Shopify Inc. (SHOP): Shares of the cloud e-commerce platform sank 12% despite beating expectations with its quarterly earnings and sales. Shares had risen 83% in the year leading up to Tuesday’s report.
- Arista Networks Inc. (ANET): The cloud networking company’s shares fell nearly 10% after its fourth-quarter earnings and sales topped analyst estimates. It forecast first-quarter revenue slightly above expectations.
- DataDog Inc. (DDOG): Shares of the data analytics platform developer fell 6% after its full-year earnings and sales guidance fell short of analysts’ expectations.
Stock Futures Fall Ahead of January CPI
6 hr 48 min ago
Futures contracts connected to the Dow Jones Industrial Average were down 0.2% in premarket trading on Tuesday.
S&P 500 futures traded 0.4% lower.
Nasdaq 100 futures were down 0.7% a little over an hour before markets opened.
