STOCK MARKET NEWS: Dow sinks 764 points, deeper recession fears rise, TikTok state bans rise

Lennar Corp. (LEN) on Wednesday reported fiscal fourth-quarter profit of $1.32 billion.

On a per-share basis, the Miami-based company said it had profit of $4.55. Earnings, adjusted for non-recurring costs, were $5.02 per share.

The results surpassed Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of $4.92 per share.

The homebuilder posted revenue of $10.17 billion in the period, which missed Street forecasts. Four analysts surveyed by Zacks expected $10.24 billion.For the year, the company reported profit of $4.61 billion, or $15.72 per share. Revenue was reported as $33.67 billion.

Novavax announced a proposed offering of $125 million of convertible senior notes due 2027 and a proposed underwritten public offering to sell up to $125 million of its common stock.

The biotechnology company may use the net proceeds from the offering of the notes and, if consummated, the concurrent common stock offering, for general corporate purposes, including but not limited to the continued global commercial launch of Nuvaxovid, repayment or repurchase of a portion of the $325 million in outstanding principal amount of our 3.75% convertible senior unsecured notes due February 1, 2023, working capital, capital expenditures, research and development expenditures, clinical trial expenditures, repayments under our supply agreements, as well as acquisitions and other strategic purposes.

REAL-ESTATE

Mortgage rates fall for fifth week

Mortgage rates fell for a straight fifth week with the 30-year and 15-year fixed rate mortgages dropping to 6.31% and 5.54%, respectively, nearly double last year.

The average long-term U.S. mortgage rate declined for the fifth straight week, even as the Federal Reserve just raised its key borrowing rate for the seventh time this year and signaled there were more to come in 2023.

Mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate inched down to 6.31% from 6.33% last week. A year ago the average rate was 3.12%.

The average long-term rate reached 7.08% as recently as early November.

Fidelity National Information Services on Thursday said it will undertake a strategic review and add a new director to its board after pressure from hedge fund D.E. Shaw Group.

FIS also said it would speed up management changes, with Stephanie Ferris, who was scheduled to become CEO in January, taking over the top job on Friday and Gary Norcross, a 34-year FIS veteran who has been CEO since 2015, leaving the company.

Mark Ernst, who had been executive vice president and chief operating officer at Fiserv, a global fintech and payments company that competes with FIS, is joining the board.

FIS, a maker of technology for banking and merchant payments, has seen its stock price drop in recent years as investors became frustrated with how its three main businesses were linked together.

Ferris had been FIS president where she led the integration of Worldpay and steered the company's global business strategy.

MARKETS

Ford, Chinese firm may build US battery plant: report

Ford may work with a Chinese firm to build and operate a battery plant that would supply parts for its electric vehicles.

Ford Motor Co and China's Contemporary Amperex Technology Co Ltd (CATL) are considering building a battery plant in Michigan or Virginia to reap tax benefits without treading on Sino-U.S. political sensitivities, Bloomberg reported on Wednesday.

The multibillion-dollar facility will make lithium iron phosphate batteries for Ford's electric models, Bloomberg reported, citing people familiar with the matter.

The companies are contemplating an ownership structure in which Ford would own 100% of the plant, including the infrastructure, while the Chinese battery giant would operate the factory and own the technology to build the cells, the report said.

That would let the facility qualify for production tax credits under the U.S. Inflation Reduction Act without needing direct financial investment from CATL, Bloomberg reported.

In October, Reuters reported CATL had slowed plans to invest in battery plants in North America over concerns that new U.S. rules on sourcing required materials would drive up costs.

Ford and CATL did not immediately respond to Reuters' request for comment.

MARKETS

Warner Bros. Discovery boosts restructuring-cost estimate

Warner Bros. Discovery has increased its estimate on what restructuring costs will be concerning the company's merger.

Warner Bros Discovery Inc WBD.O on Wednesday raised its expectations of costs related to content write-offs by $1 billion and said the charges could now reach up to $3.5 billion.

For the media company, formed earlier this year by the merger of AT&T Inc's WarnerMedia unit and Discovery Inc, the total financial restructuring cost could now be between $4.1 billion and $5.3 billion.

Warner Bros has undertaken a series of cost-cutting measures since the merger, including canceling projects such as the live-action version of the DC Comics character "Batgirl," a planned "Wonder Twins" film, and shutting down the CNN+ streaming news service.

Some reports said the shows "Nevers" and "Westworld" would be pulled from HBO Max.

The company has said the restructuring initiatives will be substantially completed by the end of 2024.

MARKETS

Retail sales slow as consumers spend less in November

The Census Bureau reported that American shoppers spent less in November on retail and food services as high inflation continues to weigh on the sector.

Retail sales fell more than expected in November, but consumer spending remains supported by a tight labor market, with the number of Americans filing for unemployment benefits decreasing by the most in five months last week.

The biggest decrease in retail sales in 11 months reported by the Commerce Department on Thursday was likely payback after sales surged in October as Americans started their holiday shopping early to take advantage of discounts by businesses desperate to clear excess inventory.

Retail sales dropped 0.6% last month, the biggest drop since December 2021, after an unrevised 1.3% jump in October. Economists polled by Reuters had forecast sales dipping 0.1%.

Southwest Gas Holdings Inc will sell its MountainWest Pipelines business to Williams Companies Inc for $1.07 billion, on the heels of a months-long proxy battle with activist investor Carl Icahn that reached a settlement in May.

Las Vegas, Nevada-based Southwest also confirmed on Thursday it will spin off Centuri, its utility infrastructure services business, as a standalone, independent company, a decision it first announced in March.

Southwest had bought MountainWest, formerly known as Questar Pipelines, from Dominion Energy D.N for nearly $2 billion including debt last year. The purchase had sparked a battle between Icahn and Southwest that eventually settled with the ousting of former chief executive John Hester and three board seats being awarded to Icahn-appointed directors in May.

The activist investor had said the Questar deal hurts shareholders and referred to Hester and his management team as "a great liability."

Southwest said on Thursday it plans to begin making necessary filings in the first quarter of 2023 to go ahead with the Centuri spin-off and expects the separation to take about a year.

It will use proceeds from the MountainWest sale, expected to close next year, to pay off its term loan of about $1.1 billion, and will take an estimated loss of $350 million to $425 million on the sale, net of tax.

Williams will assume $430 million of MountainWest's debt as part of the deal.

Bird flies past The Bank of England in the City of London, Britain, Dec. 12, 2017. (Reuters/Clodagh Kilcoyne)

The Bank of England raised its key interest rate by half a percentage point on Thursday and indicated that more hikes were likely, despite a looming recession, as it tries to bring down inflation that hit a 41-year high in October.

The BoE's Monetary Policy Committee voted 6-3 to raise Bank Rate to 3.5% - its highest since 2008 - from 3.0% and said more increases may be required to tackle what it fears could prove to be persistent domestic inflation pressure from prices and wages.

“It’s going to come as a horrible blow for borrowers who got used to rock bottom rates, and haven’t seen anything like this for 14 years,” said Sarah Coles, senior personal finance analyst, Hargreaves Lansdown.

“To make matters worse, higher mortgage payments will come on top of all the other soaring costs — from food to fuel — and we have even more hikes looming on the horizon, with energy bills rising again in April. It raises the question of how much more squeezing we can take before we’re finally crushed,” Coles added.

Reuters contributed to this report.

Sam Bankman-Fried, arrested earlier this week, sits in a Bahamas jail and his family says he needs a certain diet.

ECONOMY

Sam Bankman-Fried's relatives asked Bahamas prison if he could get vegan meals there: report

Relatives of FTX founder Sam Bankman-Fried have called the prison where he is being held in Nassau, Bahamas, to ask if he could get vegan meals delivered, a report says.

Elon Musk, Tesla's largest individual shareholder, sold over $3 billion shares with the stock down over 55% this year.

U.S. stock futures are down across the board after the U.S. Federal Reserve announced a 50-basis-point hike at their final meeting of the year on Wednesday.

Meanwhile, the Dow Jones Industrial Average futures are down roughly 263 points, or 0.77%, while the S&P and Nasdaq futures are 0.96% and 1.23% lower, respectively.

Over the last five days, the Dow is now off by 0.15%, the S&P clings to a gain of 0.68% and the tech-heavy Nasdaq is 0.29% lower.

Pre-market, key tech shares have helped drag the Nasdaq lower as Meta slipped nearly 1.93%, Apple retreated by roughly 1.23%, while Microsoft and Nvidia both dipped approximately 0.96% and 2.59% beneath the redline.

In commodities, West Texas Intermediate crude futures rose 0.08% to $77.34 a barrel, as gold dropped 1.70% to $1,787.70 an ounce.

Stock traders (Reuters)

U.S. equity futures traded lower Thursday morning after a retreat on Wall Street as markets registered their dismay over the Federal Reserve’s warning that still higher interest rates are in store.

The major futures indexes suggest a decline of 0.8% when trading begins on Wall Street.

Oil prices traded lower on Thursday as the dollar firmed and demand concerned increased over the possibility of further interest rate hikes.

U.S. crude futures traded around $76.00 a barrel.

Brent crude futures traded around $82.00 per barrel.

As expected, the U.S. central bank raised interest rates by 0.50 percentage points on Wednesday. It was its seventh hike this year. The Fed also said it expects rates to be higher in coming years than it had anticipated.

A very hectic morning of economic data on tap Thursday, with a focus on retail sales, jobs and manufacturing activity.

In Asia, Tokyo's Nikkei 225 lost 0.4%, the Hang Seng in Hong Kong sank 1.6% and China's Shanghai Composite index edged 0.3% lower.

On Wednesday, the S&P 500 lost 0.6% to 3,995.32, giving up an earlier gain of 0.9%. The Dow Jones Industrial Average fell 0.4% to 33,966.35, and the Nasdaq composite gave back 0.8%, closing at 11,170.89.

European Central Bank Headquarters (Reuters)

The European Central Bank is set to raise interest rates following Thursday's meeting.

It would be the fourth increase in a row, although by less than at its last two meetings, and lay out plans to drain cash from the financial system as it fights runaway inflation, according  to Reuters.

The central bank for the 19-country euro zone raised the interest it pays on bank deposits from -0.5% to 1.5% in just three months, reversing a decade of ultra-easy policy after being wrong-footed by the sudden rise in prices.

A Reuters poll of economists expected the ECB to raise rates by half a percentage point after 75-basis-point hikes at each of its two previous meetings.

It would mirror the U.S. Federal Reserve's change of pace on Wednesday.

TikTok logo split in illustration (FBN)

TikTok continued to take the punches this week as several states implemented bans on the social media platform and U.S. lawmakers joined together for a bipartisan proposal to stop the company from conducting business transactions anywhere in the country.

The proposal was introduced by Republican Sen. Marco Rubio, as fears surrounding TikTok suggest it is a Trojan horse, of sorts, being used to spy on Americans and censor content.

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Gas Prices (AAA)

The nationwide price for a gallon of gasoline slipped Thursday to $3.193, according to AAA.

The average price of a gallon of gasoline on Wednesday was $3.214.

It was a week ago that the price of a gallon of regular gasoline slipped below that of a year ago.

A year ago, the price for a gallon of regular gasoline was $3.318.

One week ago, a gallon of gasoline cost $3.329. A month ago, that same gallon of gasoline cost $3.759.

Everyone remembers when gas hit an all-time high of $5.016 on June 14.

Diesel has slipped below $5.00 per gallon to $4.831, but that is still a far cry from the $3.594 of a year ago.

Oil rigs pumping (Reuters)

Oil prices traded lower on Thursday as the dollar firmed and demand concerned increased over the possibility of further interest rate hikes.

U.S. crude futures traded around $76.00 a barrel.

Brent crude futures traded around $82.00 per barrel.

Both contracts fell as the dollar gained. A stronger dollar weakens oil demand as it makes the commodity more expensive for those holding other currencies, according to Reuters..

Federal Reserve Chair Jerome Powell said on Wednesday the U.S. central bank will raise interest rates further next year, even as the economy slips towards a possible recession.

Price declines were capped by projections from the International Energy Agency, which see Chinese oil demand recovering next year after a contraction this year of 400,000 barrels per day.

Meanwhile, U.S. crude oil stockpiles rose by more than 10 million barrels last week, according to the Energy Information Administration.

Bitcoin was trading around $17,000, after rising in four of the last five days.

For the week, Bitcoin has gained more than 5%.

For the month, the cryptocurrency has gained more than 4%, but is down more than 61% year-to-date.

Ethereum was trading around $1,200, after gaining more than 6% in the past week.

Dogecoin was trading at 8 cents, after losing more than 7% in the past week.