STOCK MARKET NEWS: Fed Hawks and Goldman on rate hikes, Norfolk Southern pays, Reddit sues
Stocks mixed as Fed officials point to inflation and Goldman sees three Fed rate hikes, Norfolk Southern pays "inconvenience fees," Reddit sues WallStreetBets founder. FOX Business is providing real-time updates on the markets, commodities and all the most active stocks on the move
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Former pro US basketball star Paul Pierce has agreed to pay more than $1.4 million to settle charges he illegally promoted digital assets, Wall Street's top regulator said Friday.
The U.S. Securities and Exchange Commission said Pierce promoted crypto tokens sold by EthereumMax on social media without disclosing he was paid to do so, and made misleading statements about the product.
The settlement with the former Boston Celtic and NBA Hall-of-Famer marks the latest move by the SEC to crack down on celebrity endorsements of crypto products.
Pierce settled the charges without admitting or denying them, agreeing to pay $1.1 million in fines and another $240,000 representing the disgorgement of ill-gotten gains plus interest, according to the SEC.
A representative for Pierce did not immediately respond to a request for comment.
U.S. stocks ended the Friday session mixed with the Dow Jones Industrial Average the only benchmark to post gains as investors wrestled with the likelihood of more and larger rate hikes to tame sky-high inflation after a week of strong economic data.
The yield on the 10-year Treasury posted its longest winning streak since October rising to 3.827%. In commodities, oil fell 4% for the week to $76.34 per barrel.
Weekly Performance:
Nasdaq Composite: +0.6%
S&P 500: -0.3%
Dow Jones Industrial Average: -0.2%
Two Stanford University academics signed on to FTX founder Sam Bankman-Fried’s $250 million bail package, enabling him to live with his parents while awaiting trial on fraud charges, court papers revealed Wednesday.
Unsealed papers in Manhattan federal court showed that Larry Kramer, dean emeritus of Stanford Law School, and Andreas Paepcke, a senior research scientist at Stanford, pledged to pay a total of $700,000 if Bankman-Fried flees before facing trial on charges that he defrauded investors in his cryptocurrency trading platform.
Kramer is on the hook for $500,000 while Paepcke has agreed to pay $200,000, court records show. Neither was required to post collateral for the “personal recognizance bond.” The names were ordered unsealed Wednesday by Judge Lewis A. Kaplan at the request of news organizations, including The Associated Press.
| Symbol | Price | Change | %Change |
|---|---|---|---|
| NSC | $227.82 | -2.20 | -0.96 |
The Biden administration on Friday defended its response to a Feb. 3 derailment of a train carrying toxic chemicals in East Palestine, Ohio caused a fire that sent a cloud of smoke over the town.
The White House said the Department of Health and Human Services (HHS) and Centers for Disease Control and Prevention (CDC) are deploying a team of medical personnel and toxicologists to conduct public health testing and assessments. Federal Railroad Administration chief Amit Bose will visit the site next week, while the Environmental Protection Agency is conducting additional testing, officials said.
Two Federal Reserve officials on Friday added to a chorus of U.S. central bankers this week in signaling that interest rates will need to go higher in order to successfully quash inflation, although one guarded against inferring too much from recent unexpectedly-strong economic data.
"I think there's a long way to go before we reach our 2% inflation objective and I think we'll have to continue to raise the federal funds rate until we see a lot more progress on that," Fed Governor Michelle Bowman said during an appearance before a bankers association in Nashville, Tennessee, referring to an inflation rate that is still more than double the Fed's goal by its own preferred measure.
"I don't think we're seeing what we need to be seeing, especially with inflation, those numbers have been jumping around a little bit," Bowman said. "We were seeing some progress in lowering inflation at the end of last year, but some of the data that we're seeing early this year is not tracking with consistently lowering inflation in a way that I would like to see."
The Fed at its last meeting raised the target federal funds rate by a quarter point, to a range between 4.5% and 4.75%, after a year of larger half point and three quarter point rate hikes. The bulk of Fed officials as of December saw rates moving to a peak of between 5% and 5.25% this year, a projection that will be updated at the Fed's upcoming March 21-22 meeting.
| Symbol | Price | Change | %Change |
|---|---|---|---|
| AXL | $9.14 | -0.91 | -9.05 |
American Axle & Manufacturing met Wall Street revenue expectations but missed on profit.
Fourth quarter revenue rose 12.8% to $1.39 billion from a year ago; analysts expected $1.39 billion.
Net income for the three months ended Dec. 31 was $13.9 million compared to a year ago loss of $46.3 million.
The quarterly adjusted loss was 7 cents per share for the quarter ended in December. The mean expectation of eight analysts for the quarter was for earnings of one cent per share.
The auto parts supplier's full year 2023 financial targets are as follows:
• AAM is targeting sales in the range of $5.95 - $6.25 billion.
• AAM is targeting Adjusted EBITDA in the range of $725 - $800 million.
Reuters contributed to this report.
| Symbol | Price | Change | %Change |
|---|---|---|---|
| ISEE | $23.75 | 3.75 | 18.75 |
Iveric bio has announced that the U.S. Food and Drug Administration has accepted the company’s New Drug Application (NDA) for avacincaptad pegol (ACP), a novel investigational complement C5 inhibitor for the treatment of geographic atrophy (GA) secondary to Age-Related Macular Degeneration (AMD).
By targeting C5, ACP has the potential to decrease activity of the complement system that causes the degeneration of retinal cells and potentially slow the progression of GA.
The NDA has been granted priority Review with a Prescription Drug User Fee Act (PDUFA) goal date of Aug. 19, 2023. The company also announced that, at this time, the FDA has not identified any potential review issues and the FDA is not currently planning to hold an Advisory Committee meeting for ACP.
Age-related macular degeneration (AMD) is the major cause of moderate and severe loss of central vision in aging adults, affecting both eyes in the majority of patients.
| Symbol | Price | Change | %Change |
|---|---|---|---|
| AMCX | $25.90 | 5.40 | 26.34 |
AMC Networks topped Wall Street revenue and profit estimates.
Fourth quarter revenue rose 20% to $964.52 million from a year ago; analysts expected $947.78 million.
The net loss for the three months ended Dec. 31 was $264.69 million compared to net profit of $17.04 million a year ago.
Adjusted earnings were $2.52 per share for the quarter ended in December. Analysts were looking for $1.20 per share.
Fourth quarter subscription revenues grew 7% due to increased streaming revenues primarily driven by streaming subscriber growth, partially offset by declines in the linear subscriber universe.
Streaming revenues increased 41% with quarter end total subscribers of 11.8 million.
Affiliate revenues declined 7.5% due to basic subscriber declines, partly offset by contractual rate increases.
Reuters contributed to this report.
The founder of WallStreetBets, which has been credited with helping ignite investors' frenzy into "meme" stocks, sued Reddit Inc on Wednesday, accusing it of wrongly banning him from moderating the community and undermining his trademark rights.
Jaime Rogozinski said his ouster, ostensibly for violating Reddit policy by "attempting to monetize a community," was a pretext to keep him from trying to control "a famous brand that helped Reddit rise to a $10 billion valuation" by late 2021.
According to the complaint filed in federal court in Oakland, California, Rogozinski applied to trademark "WallStreetBets" in March 2020, one month before his ouster, when the community reached 1 million subscribers.
Founded in 2012, the community now has 13.6 million subscribers.
man walks past ATM machines at branch of the NatWest bank in Manchester, Britain September 21, 2017. (Reuters/Phil Noble)
| Symbol | Price | Change | %Change |
|---|---|---|---|
| NWG | $6.97 | -0.48 | -6.44 |
NatWest warned on Friday that rising interest rates may not deliver the long-lasting earnings bonanza investors hope for, even though profit jumped by 33% last year.
“NatWest acknowledge that there is a gloomy case that can be made about the outlook as rising interest rates and high utility bills bite, but their customers are so far resilient,” said Steve Clayton, Head of Equity Funds at Hargreaves Lansdown. “Bad debt losses were just 0.09% of the loan book and much of that was assumptions about what’s coming next, rather than loans that have already soured.”
State-backed NatWest did increase payouts for shareholders, announcing a 10 pence per share final dividend and an 800 million pound share buyback.
NatWest said the government will receive a total of 2.6 billion pounds for 2022 via the bank's payouts to shareholders.
“All well and good, but NatWest are also suggesting that margins will expand no further from here. With the stock having stormed 20% higher so far this year, some will be expecting more than that from the group. That explains the sharp tumble the shares have taken this morning,” Clayton added.
Reuters contributed to this report.
Clouds are seen in front of the Dropbox logo in this illustration taken February 27, 2022. REUTERS/Dado Ruvic/Illustration
| Symbol | Price | Change | %Change |
|---|---|---|---|
| DBX | $21.85 | -2.11 | -8.81 |
Dropbox is trading lower Friday. Gross operating margin was negative in the fourth quarter for the filing hosting service due to impaired real estate.
GAAP operating margin was (13.4%), as compared to 12.4% in the same period last year. In the fourth quarter, Dropbox recorded impairment charges related to real estate assets of $162.5 million as a result of adverse changes in the corporate real estate market in the San Francisco Bay area, which has impacted its subleasing strategy in conjunction with its shift to Virtual First.
Non-GAAP operating margin was 29.9%, as compared to 29.7% in the same period last year.
On a per-share basis, the San Francisco-based company said it had net income of 93 cents. Earnings, adjusted for one-time gains and costs, came to 40 cents per share.
The results beat Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for earnings of 39 cents per share.
The online file-sharing company posted revenue of $598.8 million in the period, also exceeding Street forecasts. Four analysts surveyed by Zacks expected $593.8 million.
For the year, the company reported profit of $553.2 million, or $1.52 per share. Revenue was reported as $2.32 billion.
The Associated Press contributed to this report.
U.S. dollar notes are seen in this picture illustration taken at the Bank of Taiwan in Taipei November 11, 2010. (Reuters/Nicky Loh)
Treasury yields moved higher on Friday as the market placed greater odds that the Federal Reserve keeps interest rates higher for longer in its fight against persistent inflation.
The yield on 10-year Treasury notes hit its highest level since early November at 3.929%. Meanwhile, the yield on two-year notes rose to 4.677%, also the highest since early November.
The climb in yields comes as data this and last week showed the U.S. economy's continued resilience in spite of higher borrowing costs implemented by the Fed since early last year.
The U.S. central bank has raised its policy rate by 450 bps since last March from near zero to a 4.50%-4.75% range, with the bulk of the increases between May and December.
The likelihood of a 50-bp interest rate increase when Fed policymakers meet in March has nearly quadrupled since the Labor Department released its latest unemployment figures and producer prices. Financial markets are also increasingly betting on another hike in June.
| Symbol | Price | Change | %Change |
|---|---|---|---|
| DKNG | $20.47 | 2.66 | 14.94 |
DraftKings Inc. (DKNG) on Thursday reported a loss of $242.7 million in its fourth quarter.
The Boston-based company said it had a loss of 53 cents per share.
The results surpassed Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for a loss of 62 cents per share.
The company posted revenue of $855.1 million in the period, also surpassing Street forecasts. Ten analysts surveyed by Zacks expected $800.5 million.
For the year, the company reported that its loss narrowed to $1.38 billion, or $3.16 per share. Revenue was reported as $2.24 billion.
DraftKings expects full-year revenue in the range of $2.85 billion to $3.05 billion.
People look at vehicles for sale on the lot at AutoNation dealership in Cerritos, Calif., Dec. 9, 2015. (Reuters/Mario Anzuoni)
| Symbol | Price | Change | %Change |
|---|---|---|---|
| AN | $154.04 | 12.79 | 9.05 |
Top U.S. auto retailer AutoNation Inc reported a better-than-expected quarterly profit on Friday as demand for new vehicles, spare parts and services offset a poor performance in the used-vehicle segment.
The automotive industry is starting to show signs of a gradual recovery from a global supply-chain crisis that had curtailed production, enabling dealers such as AutoNation to boost their new-vehicle deliveries to customers.
New vehicle prices are trending down from record-high levels as supply chain bottlenecks ease and inventory rebuilds, AutoNation Chief Executive Mike Manley told Reuters.
Revenue from new vehicles and after-sales rose 8% and 7%, while used-vehicle sales fell 8%.
Excluding items, AutoNation earned $6.37 per share, ahead of analysts' average estimate of $5.83 per share, according to Refinitiv IBES data.
Its overall fourth-quarter revenue rose 2% to $6.7 billion, compared with estimates of $6.52 billion.
| Symbol | Price | Change | %Change |
|---|---|---|---|
| XLE | $87.61 | -0.87 | -0.98 |
| QQQ | $303.30 | -5.80 | -1.88 |
| XLU | $67.75 | -0.52 | -0.76 |
| XLP | $72.74 | -0.53 | -0.72 |
U.S. stocks fell across the board as investors prepare for interest rates to go higher after a series of strong economic reports this week on retail sales and inflation. Energy and tech companies paced the selling, while utilities and consumer staples held up better. In commodities, oil fell nearly 4% to the $75 per barrel level.
The founder and CEO of Chobani yogurt is paying it forward, donating millions in relief efforts for Turkey's earthquake victims and he's calling for other business leaders to step up.
Two inflation reports, the producer price index and the consumer price index, came in hotter-than-expected this week pushing Wall Street firms to update their projections for future rate hikes creating more headwinds for the U.S. economy.
Sergio Flores/Bloomberg via Getty Images
Deere & Co. shares rose on Friday after reporting fiscal first-quarter net income of $1.96 billion. On a per-share basis, the Moline, Illinois-based company said it had net income of $6.55.The results topped Wall Street expectations. The average estimate of 13 analysts surveyed by Zacks Investment Research was for earnings of $5.53 per share.
The agricultural equipment manufacturer posted revenue of $12.65 billion in the period. Its adjusted revenue was $11.4 billion, also exceeding Street forecasts. Nine analysts surveyed by Zacks expected $11.31 billion.
AP Photo
DoorDash Inc topped Wall Street expectations for quarterly revenue 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.
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