STOCK MARKET NEWS: Stocks fall, wholesale prices rise, credit card debt sets record, Tesla recall

Securities and Exchange Commission logo adorns an office door at the SEC headquarters in Washington, June 24, 2011. (Reuters/Jonathan Ernst)

The U.S. Securities and Exchange Commission has charged crypto developer Do Kwon and his company Terraform Labs with defrauding investors in what the regulator deemed a multibillion-dollar scheme, according to a filing in federal court in the Southern District of New York.

Kwon founded blockchain platform Terraform Labs and was the primary developer of two cryptocurrencies whose demise roiled crypto markets around the world last year. He raised billions of dollars from investors beginning in April 2018 by selling a series of inter-connected digital assets, many of which were unregistered securities, the SEC alleged.

TerraUSD, an algorithmic stablecoin supposed to maintain a 1:1 peg to the U.S. dollar, derived its value through another paired token called Luna.

Both tokens lost nearly all their value when TerraUSD, also known as UST, slipped below its 1:1 dollar peg in May 2022. Prior to its collapse on May 9, TerraUSD had a market cap of more than $18.5 billion and was the tenth-largest cryptocurrency.

Applied Materials logo (Reuters)

Chip tools maker Applied Materials Inc on Thursday forecast second-quarter revenue broadly above market estimates, as it benefits from higher production of semiconductors that had been in short supply for the most of last year.

After a global shortage of semiconductors affected everything from smartphones to car production, chipmakers are now scrambling to boost capacity in the United States and Europe and reduce reliance on Asian hubs.

This has helped Applied Material, which is also benefiting from rising popularity of electric vehicles and accelerating adoption of automation even as demand from consumer-driven electronics markets including PCs and smartphones remains weak.

Shares of the Santa Clara, California-based company rose nearly 2% in trading after the bell. The stock lost 38% last year.

The company forecast current-quarter revenue of $6.40 billion, plus or minus $400 million, compared with analysts' average estimate of $6.29 billion, according to Refinitiv IBES data. The outlook includes impact from ongoing supply chain challenges.

Meanwhile, adjusted profit is expected to be between $1.66 and $2.02 per share.

Revenue for the first quarter was $6.74 billion, compared with analysts' average expectation of $6.69 billion.

Excluding items, the company earned $2.03 per share, beating estimates of $1.93 per share, according to Refinitiv IBES data.

Posted by Reuters

U.S. household debt jumped to a record $16.90 trillion from October through December last year, the largest quarterly increase in 20 years, as mortgage and credit card balances surged amid high inflation and rising interest rates, a Federal Reserve report showed on Thursday.

ECONOMY

Credit card debt soars to new record as high inflation squeezes Americans

U.S. households are racking up credit card debt as they confront relentlessly high prices for everyday necessities, the New York Federal Reserve reported Thursday.

Household debt, which rose by $394 billion last quarter, is now $2.75 trillion higher than just before the COVID-19 pandemic began while the increase in credit card balances last December from one year prior was the largest since records began in 1999, the New York Fed's quarterly household debt report also said.

Mortgage debt increased by $254 billion to $11.92 trillion at the end of December, according to the report, while mortgage originations fell to $498 billion, representing a return to levels last seen in 2019.

Meanwhile credit card balances increased by $61 billion in the fourth quarter while auto loan balances rose by $28 billion, the report said.

Vasant Prabhu, Chief Financial Officer of Visa, speaks during the Milken Institute Global Conference in Beverly Hills, Calif., May 2, 2017. (Reuters/Mike Blake)

Visa said on Thursday its chief financial officer, Vasant Prabhu, will leave the company on Sept. 30, after eight years as one of the top executives at the payments giant.

Prabhu, who joined the company in 2015, will assist the company with the search for and the onboarding of his replacement.

In November, the world's largest payments processor had also named its president, Ryan McInerney, as its new chief executive officer to steer the company through a challenging period for the payments industry as consumers tighten their spending.

Sharply higher prices for everyday goods have squeezed consumers in recent months, clouding the outlook for payments companies for 2023.

In the backdrop of a tumultuous economy, revenue growth at Visa continued to wind back to pre-pandemic levels in the first-quarter as the post-lockdown travel craze ebbed and consumer spending slowed.

Prabhu will also step down from his role as the vice-chair of Visa.

DoorDash sign on a restaurant on the day they hold their IPO in the Manhattan borough of N.Y., Dec. 9, 2020. (Reuters/Carlo Allegri)

DoorDash Inc topped Wall Street expectations for quarterly revenue on Thursday helped by steady demand for ordering food online, despite persistently high inflation and higher prices.

As fears of a recession grow in the United States, cost-conscious consumers have stuck with their pandemic habit of ordering affordable meals at home rather than dining at restaurants, boosting revenues for companies like DoorDash and UberEats parent Uber Technologies Inc.

Total orders rose 27% to 467 million in the fourth quarter from the prior year.

The top U.S. food delivery company expects gross order value – the total value of all app orders and subscription fees – to be between $60 billion to $63 billion for 2023, compared with $53.4 billion it reported in 2022.

The San Francisco-based firm's revenue jumped 40% to $1.82 billion in the quarter ended Dec. 31. Analysts had expected about $1.77 billion, according to IBES data from Refinitiv.

However, the company's quarterly net loss widened to $642 million, or $1.65 per share, from $155 million, or 45 cents a year earlier, due to costs related to stock-based compensation and staff cuts.

Stockholm-Are delegation members celebrate during the presentation final presentation of the Stockholm-Are candidate cities the first day of the 134th Session of the International Olympic Committee (IOC), at the SwissTech Convention Centre, in Lausanne, on June 24, 2019. (Laurent Gillieron/Keystone via AP, File)

Sweden emerging as the front-runner in a troubled search for a 2030 Olympics host is as much a surprise in Stockholm as elsewhere.

The year started with Sweden not on the radar of a Winter Games race where longtime favorite Sapporo faded during a criminal investigation of alleged bribery linked to the recent Tokyo Olympics. Salt Lake City is targeting 2034.

The picture changed when Swedish officials met last month in Switzerland with International Olympic Committee leaders who faced uncertainty and time running out to find a 2030 host.

Urging caution just one week after the Sweden Olympic Committee formally announced its interest, Von Uthmann said there is a June target to complete a feasibility study he is overseeing to reboot most of the 2026 plan.

Tesla Model S charges at a Tesla supercharger station in Cabazon, Calif., May 18, 2016. (Reuters/Sam Mircovich)

Tesla Inc said it would recall 362,000 U.S. vehicles to update its Full Self-Driving (FSD) Beta software after U.S. regulators said on Thursday the driver assistance system did not adequately adhere to traffic safety laws and could cause crashes.

The National Highway Traffic Safety Administration said the Tesla software allows a vehicle to "exceed speed limits or travel through intersections in an unlawful or unpredictable manner increases the risk of a crash."

Tesla will release an over-the-air (OTA) software update free of charge, and the electric vehicle maker said it is not aware of any injuries or deaths that may be related to the recall issue. The automaker said it had 18 warranty claims.

POLITICS

Maine lawmakers aim to strip Whole Foods of state tax breaks over lobster ban

Maine lawmakers are looking to pull tax breaks away from Whole Foods after the company stopped selling Maine lobster following pressure from an environmental group.

Republican lawmakers in Maine are going after Amazon unit Whole Foods for its rebuke of the state's signature seafood — Maine lobster.

Whole Foods stopped selling Gulf of Maine lobster at hundreds of its stores last year after a pair of sustainability organizations suspended lobster certifications over concerns the fishing gear could hurt endangered whales.

Maine officials have decried those actions — pointing out that no deaths of North Atlantic right whales have been linked to lobster gear.

Maine's Senate Republican leader is now sponsoring a bill to strip Whole Foods from participation in the Business Equipment Tax Reimbursement program, which provided the grocer's only store in Maine with a $36,671 reimbursement for 2021.

Sen. Trey Stewart accused Whole Foods of blindly following “incorrect science” and giving Maine's $1.7 billion lobster industry a “black eye.”

Whole Foods had no immediate comment.

YouTube CEO Susan Wojcicki attends a conference at the Cannes Lions International Festival of Creativity, in Cannes, France, June 19, 2018. (Reuters/Eric Gaillard)

YouTube Chief Executive and one of the first Google employees, Susan Wojcicki, is stepping down from her role at the tech giant that started in her garage nearly 25 years ago, she said in a personal update on the video-sharing platform on Thursday.

Wojcicki, 54, will be replaced by her deputy Neal Mohan, a senior advertising and product executive who joined Google in 2008.

TECHNOLOGY

YouTube CEO Susan Wojcicki stepping down

Susan Wojcicki will step down from her position as CEO of YouTube, she announced on Thursday. Her tenure as YouTube's chief executive has spanned about nine years.

The change of guard comes as YouTube's advertising revenue fell for the second straight quarter amid intense competition for viewing time with short-form video services such as TikTok and Facebook's Reels, and streaming services like Netflix.

One of the most prominent women in tech, Wojcicki said she will focus on "family, health, and personal projects", and plans to take on an advisory role at Alphabet.

She was previously senior vice president for ad products at Google and became the CEO of YouTube in 2014.

Outback restaurant is seen in Riverside, Calif., Feb. 5, 2009 ( Reuters/Mario Anzuoni)

Bloomin' Brands Inc. on Thursday reported fourth-quarter earnings of $58 million.

The Tampa, Florida-based company said it had net income of 61 cents per share. Earnings, adjusted for non-recurring costs, were 68 cents per share.

The results surpassed Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of 63 cents per share.

The owner of Outback Steakhouse and other casual dining spots posted revenue of $1.1 billion in the period, falling short of Street forecasts. Six analysts surveyed by Zacks expected $1.12 billion.

For the year, the company reported profit of $101.9 million, or $1.03 per share. Revenue was reported as $4.42 billion.Bloomin' Brands expects full-year earnings in the range of $2.91 to $3 per share.

The Hasbro logo seen on the Star Wars Galactic Snackin Grogu toy in the FAO Schwarz toy store in Manhattan, New York City, Nov. 24, 2021. (Reuters/Andrew Kelly)

Hasbro Inc forecast annual sales and profit below Wall Street estimates on Thursday, hammered by a slump in demand for its toys and games from customers reeling with rising prices.

Both Hasbro and its rival Mattel Inc had seen a steep drop in consumer spending in the crucial holiday season, putting to test the resilience of toymakers to economic slowdown as customers spend more on essentials.

The company also warned of a $300-million hit to revenue from a strong dollar and its exit from some licenses, brands and markets.

It lost the lucrative license to make Disney Princess toys to Mattel last year and is exiting Sesame Street and Trolls licenses this year, but is banking on a slate of blockbuster releases to support revenue.

Hasbro expects 2023 adjusted earnings per share between $4.45 and $4.55 compared with Refinitiv estimates of $4.88.

Revenue at Hasbro's consumer products business — its largest and home to toys such as Nerf blasters and My Little Pony figures — is expected to decline mid-single digits in 2023, with overall revenue projected to be down low-single digits.

Toy figures of people in front of the displayed Paramount + logo, in this illustration taken Jan. 20, 2022. (Reuters/Dado Ruvic/Illustration)

Paramount Global Inc will raise prices for its flagship streaming service in some markets this year, the CBS network owner said on Thursday, amid an extended weakness in the advertising market that has pressured revenue.

The company will increase the prices of premium and essentials tier of its streaming service Paramount+ in some markets. Prices will rise to $11.99 per month from $9.99 for the premium tier that includes Showtime , and to $5.99 from $4.99 for the essentials tier without Showtime. Paramount+ is set to integrate with the company's other streaming platform Showtime — home to popular shows such as "Billions" and "Dexter" — later this year.

It expects impairment charge of $1.3 billion to $1.5 billion in the current quarter from the integration.

Paramount+ raked in 9.9 million new subscribers for the quarter ended Dec. 31, but the direct-to-consumer unit continues to grapple with losses due to huge investments in content.

Overall, Paramount earned 8 cents per share profit on revenue of $8.13 billion, compared with expectation of a profit of 23 cents on revenue of $8.16 billion, as per Refinitiv data.

Home for sale in Voorhees, N.J., Oct. 29, 2022

The average long-term U.S. mortgage rate jumped this week to its highest level in five weeks, bad news for home shoppers heading into the spring buying season.

REAL-ESTATE

Mortgage rates climb for second week on strength of economy

Home buyers got no relief as mortgage rates climbed to 6.32% amidst pessimism that the Federal Reserve will not get ahead of inflation this year and borrowing will stay expensive.

Mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate rose to 6.32% from 6.12% last week. The average rate a year ago was 3.92%.

The average long-term rate reached a two-decade high of 7.08% in the fall as the Federal Reserve continued to raise its key lending rate in a bid to cool the economy and and bring down stubborn, four-decade high inflation.

Worker shelters from the rain under a Union Flag umbrella as he passes the London Stock Exchange in London, Britain, Oct. 1, 2008. (Reuters/Toby Melville)

UK's FTSE 100 rose to a record high on Thursday, underpinned by corporate earnings from Centrica and Standard Chartered, while higher commodity prices drove up heavyweight miners.

The blue-chip FTSE 100 FTSE gained 0.3%, trading comfortably above the 8,000-point mark it had breached in the previous session.

The exporter-heavy FTSE has had a stellar start to the year as positive corporate earnings and rising commodity prices supported the index.

“Having finally smashed through the 8,000 level on Wednesday, the FTSE 100 shows no signs that its batteries are running out of juice, rising another 0.4% to 8,032,” said Russ Mould, investment director at AJ Bell.

“For an index that’s been unloved for years, it’s refreshing to see the FTSE find its rhythm as this could help it win back some of the investors who turned their backs in 2016 when the Brexit vote was cast.

Reuters contributed to this report.

Shake Shack signage at their restaurant at the Woodbury Common Premium Outlets in Central Valley, N.Y., Feb. 15, 2022. (Reuters/Andrew Kelly)

Shake Shack Inc. on Thursday reported a loss of $10.7 million in its fourth quarter.

The New York-based company said it had a loss of 27 cents per share. Losses, adjusted for non-recurring costs, were 6 cents per share.

The results exceeded Wall Street expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was for a loss of 11 cents per share.

The burger chain posted revenue of $238.5 million in the period, which met Street forecasts.

For the year, the company reported a loss of $24.1 million, or 61 cents per share. Revenue was reported as $900.5 million.

Twilio logo displayed at the Collision conference in Toronto, Ontario, Canada, June 23, 2022 (Reuters/Chris Helgren)

Twilio Inc on Wednesday reported better-than-expected quarterly earnings and said the cloud communications platform will buy back shares worth $1 billion, sending its shares up 12% in extended trading.

The company said its active customer accounts rose by 13% in the fourth quarter, but rising fears of a recession are now pressuring demand.

Twilio's revenue grew 22% in the quarter ended Dec. 31 to $1.02 billion, the slowest pace in at least two years. But it was slightly higher than analysts' estimates of $1.00 billion, according to Refinitiv.

The company recently said it was eliminating about 17% of roles in its second round of job cuts and closing some offices to focus on profitability.

It reported an adjusted profit of 22 cents per share, compared with expectations for a 9 cent loss.

The current-quarter revenue forecast of between $995 million and $1.00 billion was, however, below analysts' average expectation of $1.02 billion.

Boston Beer Co. on Wednesday reported a loss of $11.4 million in its fourth quarter.

On a per-share basis, the Boston-based company said it had a loss of 93 cents.

The results did not meet Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for earnings of 72 cents per share.

The brewer posted revenue of $447.5 million in the period, topping Street forecasts. Five analysts surveyed by Zacks expected $399.7 million.

For the year, the company reported profit of $67.3 million, or $5.44 per share. Revenue was reported as $2.09 billion.

Boston Beer expects full-year earnings to be $6 to $10 per share.

Shopify logo outside its headquarters in Ottawa, Ontario, Canada, Sept. 28, 2018. (Reuters/Chris Wattie)

Shopify Inc on Wednesday forecast slowing revenue growth for the current quarter despite price hikes and new product launches, signaling that macroeconomic challenges were weighing on its merchants' online businesses.

Expectations were high after the e-commerce company , which offers tools and services for businesses to set up their online stores, roughly doubled annual subscription prices while taking measures such as workforce reduction to cut costs, bracing for a rough period as recession looms and shoppers tighten their purses.

It expects revenue growth in the "high-teen" percentages, while analysts had forecast a rise of nearly 20%, according to Refinitiv data.

Fourth-quarter revenue rose 26% to $1.7 billion, compared with analysts' average estimate of $1.64 billion.

On an adjusted basis, Shopify earned 7 cents per share, beating the expectation of a 1 cent loss.

Bitcoin was trading around $24,000, after a two-day winning streak in which it gained more than 11%.

For the week, Bitcoin has gained more than 5% touching a six-month high.

For the month, the cryptocurrency has gained more than 5% and 46% year-to-date.

Ethereum was trading around $1,600, after gaining more than 1% in the past week.

Dogecoin was trading at 8 cents, after losing more than 9% in the past week.

Stock traders (Reuters)

U.S. equity futures are whipsawing the day after a better-than-expected retail sales report.

The major futures indexes suggest a slight decline when the opening bell rings.

Oil prices gained on Thursday as hopes of increased demand from China offset losses arising from a large build in U.S. crude inventory.

U.S. West Texas Intermediate (WTI) crude futures traded around $78.00 a barrel.

Brent crude futures traded around $84.00 per barrel.

A slew of economic reports are on tap including: producer prices, jobless claims, housing starts and the Philly Fed report.

Earnings reports due include: Hasbro, Hyatt Hotels, Applied Materials, DoorDash, and DraftKings.

In Asia, Japan's benchmark Nikkei 225 gained 0.7%, Hong Kong's Hang Seng added 0.8% and China's Shanghai Composite slipped 0.9%.

On Wall Street, the S&P 500 rose 0.3% to 4,417.60 after swinging from early losses to gains through the day.

The Dow Jones Industrial Average added 0.1% to 34,128.05, while the Nasdaq composite rose a more forceful 0.9% to 12,070.59.

Manufacturing activity (Getty Images)

A busy morning kicks off with another inflation report.

 The Bureau of Labor Statistics is expected to say that producer prices climbed 0.4% month-over-month in January, rebounding from a steeper-than-expected decline of 0.5% the previous month. 

Year-over-year, prices paid by wholesalers are anticipated to jump 5.4%, down sharply from a 6.2% spike in December and the seventh straight month of cooler growth.

If you exclude food and energy costs, core producer prices are anticipated to rise 0.3% monthly in January, up from 0.1% the prior month. Year-over-year, look for growth in core PPI to cool to 4.9% in January. 

The Labor Department will report how many workers filed for unemployment benefits last week. Expectations are for 200,000, up 4,000 from the previous week’s slightly higher-than-expected tally of 196,000.

Continuing claims, which track the total number of workers collecting unemployment benefits, are expected to edge up to 1.695 million, the highest since late December. 

Also the Commerce Department is expected to say that the number of new homes under construction in January fell 1.6% to a seasonally adjusted annual rate of 1.360 million.

Permits for future construction, a good gauge of upcoming housing activity, are anticipated to rise 1.0% to 1.35 million in January, rebounding slightly from December’s pace of 1.337 million. 

And the Philadelphia Federal Reserve is out with its index of manufacturing activity for eastern Pennsylvania, southern New Jersey, and Delaware. It’s expected to inch up to -7.4 in February, remaining in contraction for a sixth month.

Cisco sign (iStock)

Cisco Systems shares are gaining 4% in premarket trading after the company raised its full-year revenue growth forecast on Wednesday, banking on its ability to push backlog orders quickly and rapid adoption of 5G technology to keep demand upbeat.

The company forecast fiscal 2023 revenue growth between 9% and 10.5%, compared with its earlier forecast of 4.5% to 6.5% growth.

Cisco, whose products are core to a firm's networking infrastructure, has benefited as companies are increasingly adopting technologies like cloud and digital workloads to support hybrid work.

The company, which reeled from chip shortages and excess inventory buildup last year, is also pushing to clear the backlog orders, which the management described last quarter as historically high.

Posted by Reuters

Roku sign (Reuters)

Roku shares were 10% higher in premarket after the company forecast first-quarter revenue above analysts' estimates on Wednesday, betting on its streaming devices and content platform to drive growth.

A pandemic winner, Roku is benefiting from the ongoing trend of people ditching their traditional cable packages and flocking to subscription-based streaming services.

The company's push towards more original content on its own streaming channel has only helped it to strengthen the influx of subscribers and advertisers.

Many advertisers have been forced to decrease their marketing budgets in response to record-high inflation rates and continued uncertainty about a recession.

Posted by Reuters

Shopify logo (Reuters)

Shopify shares are 10% lower in premarket trading after the company forecast slowing revenue growth for the current quarter despite price hikes and new product launches.

The holiday-quarter results surpassed estimates.

The company expects revenue growth in the "high-teen" percentages, while analysts had forecast a rise of nearly 20%, according to Refinitiv data.

Fourth-quarter revenue rose 26% to $1.7 billion, compared with analysts' average estimate of $1.64 billion.

On an adjusted basis, Shopify earned 7 cents per share, beating the expectation of a 1 cent loss.

Reuters contributed to this post.

Hasbro and Doordash to report. (Getty Images)

A slew of companies will report quarterly earnings in the morning.

Foodservice distributor US Foods, gas and electric utilities Constellation Energy and Southern Company, toymaker Hasbro, and hospitality giant Hyatt Hotels are among the key names reporting.  

In the afternoon watch for numbers from chip equipment maker Applied Materials, online food delivery company DoorDash, and fantasy sports betting giant DraftKings among others. 

MARKETS

McDonald's' new plant-based menu item: non-chicken McNuggets

McDonald's is adding McPlant Nuggets to its offerings of plant-based items on their fast food menu.

McDonald’s is adding another plant-based menu item that may cause more traditional customers cry foul.

The Chicago-based fast food giant is introducing plant-based McNuggets next week in Germany.

The item is being  co-developed with Beyond Meat, the California-based maker of plant-based meats.

Gas prices (AAA)

The price of gasoline moved higher on Thursday.

The nationwide price for a gallon of gasoline ticked higher to $3.422, according to AAA.

The average price of a gallon of gasoline on Wednesday was $3.418.

A year ago, the price for a gallon of regular gasoline was $3.514.

One week ago, a gallon of gasoline cost $3.437.  A month ago, that same gallon of gasoline cost $3.05.

Gas hit an all-time high of $5.016 on June 14.

Diesel remains below $5.00 per gallon at $4.534, but that still far from the $3.921 of a year ago.

Oil rig pumping (Reuters)

Oil prices gained on Thursday as hopes of increased demand from China offset losses arising from a large build in U.S. crude inventory.

U.S. West Texas Intermediate (WTI) crude futures traded around $79.00 a barrel.

Brent crude futures traded around $85.00 per barrel.

The International Energy Agency (IEA) said that oil demand will rise by 2 million barrels per day (bpd) in 2023, up 100,000 bpd from last month's forecast.

China will account for almost half of 2023 oil demand growth after relaxing its COVID-19 curbs, the Paris-based agency said.

The U.S. dollar, which generally moves inversely with crude prices, surged on the back of bullish U.S. retail sales data and clung to most of those gains on Thursday.

U.S. crude oil stocks soared last week by 16.3 million barrels to 471.4 million barrels, the highest level since June 2021, the Energy Information Administration (EIA) said.

Reuters contributed to this post.