STOCK MARKET NEWS: Nasdaq leads stock drop, Target’s hiring push, mortgage rates climb again

The Boeing Company and former CEO Dennis Muilenburg agreed to settle a complaint by the Securities and Exchange Commission that they mislead investors about the 737 MAX.

The SEC charged Boeing and Muilenburg with making materially misleading public statements following crashes of Boeing airplanes in 2018 and 2019. The crashes involved Boeing’s 737 MAX airplane and a flight control function called the Maneuvering Characteristics Augmentation System (MCAS).

The SEC’s orders against Boeing and Muilenburg find that they negligently violated the antifraud provisions of federal securities laws. Without admitting or denying the SEC’s findings, Boeing and Muilenburg consented to cease-and-desist orders that include penalties of $200 million and $1 million, respectively.

A Fair Fund will be established for the benefit of harmed investors pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002.

CostCo is lower in after-hours trading as operating expenses rose. Merchandise costs grew 16% to $63.56 billion.

The membership only big-box retailer beat Wall Street revenue and profit estimates.

Fiscal fourth total revenue rose 15% to $72.10 billion. The analysts' average estimate was $72.04 billion. Comparable sales grew 13.7%, with e-commerce up 7.1%. U.S. sales were 15.8%.

Net income for the three months ended August 28 was $1.87 billion, up from $1.67 billion.

Diluted earnings per share was $4.20. The estimate was $4.17.

DocuSign is higher Thursday in extended trading. The electronic document manager announced Allan Thygesen as Chief Executive Officer, effective October 10.

He joins DocuSign from Google where he served as President, Americas & Global Partners, leading the company's more than $100 billion advertising business across North and South America.

Allan replaces Dan Springer, who stepped down in June.

DocuSign shares are down down 65% year to date.

ECONOMY

Goldman raises Fed rate hike forecast after Powell's hawkish stance

The Federal Reserve is likely to hike interest rates even more aggressively than initially believed as they try to combat inflation, according to Goldman Sachs economists.

Goldman Sachs has lifted its forecast for interest rate increases by the Federal Reserve.

Economists at the investment bank expect the Fed to continue raising the benchmark federal funds rate through February 2023 until it hits a target range of 4.5% to 4.75%.

Comments by Fed chair Jerome Powell, which Goldman described as "somewhat hawkish" – were behind the more aggressive forecast.

FreshPet jumped in late trading Thursday. The Wall Street Journal reported that activist investor Jana Partners has acquired a stake in the company to boost share prices and explore a sale.

People familiar say Jana has acquired nearly 10% of the company specializing in high-end refrigerated pet food.

The company has a market capitalization of about $2.1 billion, down from $8 billion at its peak.

Kohl's exteriors

MARKETS

Activist investor calls on Kohl's board to oust chair, CEO

Ancora Holdings Group says department store chain Kohl’s needs leaders with "demonstrated experience in cost containment, margin expansion, product catalog optimization and, most importantly, turnarounds."

Kohl's CEO Michelle Gas is under fire from an activist investor who says she is "no longer ideally suited to lead Kohl's to long-term value creation.

FactSet Research Systems Inc. on Thursday reported fiscal fourth-quarter net income of $104.4 million.

The Norwalk, Connecticut-based company said it had net income of $2.69 per share. Earnings, adjusted for one-time gains and costs, came to $3.13 per share.

The results fell short of Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of $3.25 per share.

The financial data firm posted revenue of $499.3 million in the period, beating Street forecasts. Six analysts surveyed by Zacks expected $492.1 million.

For the year, the company reported profit of $396.9 million, or $10.25 per share. Revenue was reported as $1.84 billion.

FactSet expects full-year earnings in the range of $14.50 to $14.90 per share, with revenue in the range of $2.1 billion to $2.12 billion.

Upwork fell more than 6% in Thursday morning trading. The platform that connects businesses with freelancers announced its chief financial officer is leaving.

Current CFO Jeff McCombs will remain through the end of the calendar year to support the transition plan.

Prior to joining Upwork, McCombs served as CFO for several organizations, including Doctor On Demand, OpenTable, and Flipboard.

The company reaffirmed its third-quarter 2022 guidance.• Revenue between $156 million and $158 million• Non-GAAP basic and diluted loss per share between $(0.06) and $(0.08)

Ball Corp said on Wednesday that it has completed the sale of its beverage packaging business in Russia to Arnest Group for $530 million.

In March, the sustainable metal packaging maker reduced operations at its three manufacturing facilities in Russia immediately after the country's invasion of Ukraine and were looking to pursue a sale of its Russian business to a new owner.

The company said Arnest Group, a manufacturer of perfume, cosmetic and household products in aerosol packaging in Russia, has acquired all of Ball's Russia-based business and the sale is not expected to impact the company's business outside of Russia.

"We believe this is a sound outcome for Ball in these geo-political circumstances," said Dan Fisher, Ball's chief executive officer.

Earlier on Wednesday, Russian President Vladimir Putin ordered his country's first wartime mobilization since World War Two, shocking citizens with what Western countries described as an act of desperation in the face of a losing war.

Ford logo above a trading post on the floor of the New York Stock Exchange, Monday, April 23, 2018. (AP Photo/Richard Drew, File)

Ford is restructuring its vehicle development and supply chain operations, shuffling multiple executives just days after announcing that it would build up to 45,000 vehicles with parts missing due to shortages.

Early Thursday, Ford announced that CFO John Lawler would run a makeover of its supply chain operations until the company finds a new supply chain chief.

Doug Field, who was hired from Apple Inc., will now become chief advanced product development and technology officer. He'll lead vehicle design and hardware engineering, and continue duties overseeing electric vehicles, software and digital systems, and driver assistance systems.

The company also announced two new hires from Hewlett-Packard and Google to develop vehicle software and driver assistance systems.

The company has plans for half of its global production to be electric vehicles by 2030, but like its main competitors, Ford will need to keep selling gas-burning vehicles to fund the massive transition.

LIFESTYLE

Tesla recalling 1.1 million vehicles to fix faulty window reversing system

Tesla is recalling nearly 1.1 million vehicles to update the software that operates their window reversing systems, which can pinch an occupant's extremities too hard.

Elon Musk’s Tesla is recalling nearly 1.1 million U.S. vehicles. The recall covers some 2017-2022 Model 3, 2020-2021 Model Y, and 2021-2022 Model S and Model X vehicles.

The electric vehicle maker said it is unaware of any incidents or injuries related to the issue and has already implemented a firmware update.

ECONOMY

Jobless claims rise to 213,000 after declining for five weeks straight

Applications for unemployment benefits rose last week from a four-month low, suggesting that employers are still avoiding layoffs in the historically tight labor market.

Initial jobless claims grew after dropping for five weeks straight, the Labor Department said. Seasonally adjusted initial claims increased by 5,000 to 213,000 for the week ending September 17.

The four-week moving average declined by 6,000 to 216,750.

Darden Restaurants is lower Thursday. The owner of restaurant chains including Olive Garden, LongHorn Steakhouse and Cheddar’s Scratch Kitchen missed Wall Street’s revenue and profit expectations.

Fiscal first quarter total sales increased 6.1% to $2.45 billion driven by a blended same-restaurant sales increase of 4.2% and sales from 34 net new restaurants. Analysts were looking for $2.47 billion.

Same restaurant sales grew 2.3% at Olive Garden and 4.2% at LongHorn.

Net earnings for the three months ended August 28 fell to $193 million, down from $230.9 million.

Adjusted earnings per share were $1.53, missing the estimate of $1.56.The company reaffirmed its fiscal 2023 outlook.

ECONOMY

Mortgage rates reach highest since August 2007

Last Week mortgage rates climbed to 6.02% the highest since 2008, until today, which saw the rates climb to 6.29% for the 30-year fixed-rate mortgage (FRM).

Mortgage rates rose last week by a quarter of a percent this week, Freddie Mac said. The 30-year fixed-rate mortgage increased to 6.29% from 6.02%. A year ago, the rate was 2.88%.

The 15-year fixed rate averaged 5.44%, up from last week when it averaged 5.21%. A year ago at this time, the 15-year FRM averaged 2.15%.

Federal Reserve Chair Jerome Powell said Thursday: “For the longer term what we need is supply and demand to get better aligned so that housing prices go up at a reasonable level, at a reasonable pace, and that people can afford houses again. And I think ... we'll have to go through a correction to get back to that place. “

Powell spoke after the Fed raised interest rates by 75 basis points.

NYSE Floor trader (AP)

U.S. equity futures were searching for direction following the Fed's latest interest rate hike.

The U.S. dollar which had been trading 1% higher against the Japanese Yen, reversed course, falling 1% after Japanese authorities intervened in the forex market for the first time since 1998 to shore up the battered currency.

In Asia, the Nikkei 225 in Tokyo slid 0.6%, Hong Kong's Hang Seng tumbled 1.6% and China's Shanghai Composite Index sank 0.3%.

The yield on the 10-year Treasury, which influences mortgage rates, fell to 3.51% on Thursday.

Oil traded higher on Thursday after sliding 1% in the previous session on fears of a global recession.

U.S. West Texas Intermediate crude traded around $82.00 a barrel.

Brent crude futures were at $89.00 per barrel.

The Federal Reserve delivered another big interest rate hike and raised its outlook for more to cool galloping inflation.

The central bank's latest rate hike lifted its benchmark rate to a range of 3% to 3.25%, the highest level in 14 years, and up from zero at the start of the year.

Wall Street's benchmark S&P 500 index fell 1.7% on Wednesday to a two-month low

The S&P 500 fell to 3,789.93. The Dow fell 1.7% to 30,183.78, and the Nasdaq composite lost 1.8% to 11,220.19.

The major Wall Street indexes are on pace for their fifth weekly loss in six weeks.

The Fed in a photo illustration (Getty/iStock)

Federal Reserve  Chairman Jerome Powell is seemingly walking away from the promise of a soft economic landing as the U.S. central bank tries to wrestle inflation under control with the most aggressive interest rate hikes in decades.

For months, Powell has argued that a soft landing – the sweet spot between curbing inflation without crushing growth – is possible, but he seemed to abandon that stance on Wednesday. 

Speaking to reporters in Washington after the Fed voted to lift the benchmark federal funds rate by 75 basis points for the third straight month, Powell conceded that a recession is possible and that securing a soft landing will be "very challenging," though he cautioned that no one knows if the tightening campaign will lead to a downturn, and if so how significant it will be. 

Continue reading

Gas prices (AAA)

The average price of a gallon of gasoline gained again on Thursday to $3.684, according to AAA.

Wednesday's price was $3.681, rising for the first time in nearly 100 days, after hitting a high of $5.016 on June 14. 

Diesel's price slipped to $4.919 per gallon.

Oil rig pumpiing (Reuters)

Oil traded higher on Thursday after sliding 1% in the previous session on fears of a global recession.

U.S. West Texas Intermediate crude traded around $83.00 a barrel.

Brent crude futures were at $90.00 per barrel.

Both benchmarks fell to a near two-week low on Wednesday after the U.S. Federal Reserve raised interest rates by 75 basis points for the third time to tame inflation. The central bank also signaled that borrowing costs would keep rising this year.

U.S. crude inventories rose by 1.1 million barrels in the past to 430.8 million barrels, smaller than analysts' expectations in a Reuters poll for a 2.2 million-barrel rise.

Bitcoin was trading at around $19,000, after trading down in eight of the last nine days.

For the week, Bitcoin is lower by more than 8%. For the month, the cryptocurrency was down more than 6%. Bitcoin is down more than 59% year-to-date.

Ethereum was trading around $1,200, after losing more than 23% in the past week.

Dogecoin was trading at 5 cents, after losing 6% in the past week.

Norfolk Southern Train (AP)

The tentative deal that averted a strike by freight railroad workers takes the next step on Thursday as the unions involved begin voting on whether to accept it.

There seems to be opposition as some rail workers remain unhappy with working conditions.

Some protested outside their workplaces Wednesday.

Pickets sprung up outside rail yards across the country organized by a newly formed workers group separate from the 12 unions that negotiated the deals last week with the major U.S. freight railroads. 

The protesters expressed dissatisfaction with the deals, just as the unions are trying to explain the potential benefits they negotiated to their roughly 115,000 members ahead of contract votes.

The contract talks included Union Pacific, Norfolk Southern, BNSF, CSX, Kansas City Southern and a number of other railroads, so the entire country would have been affected by a strike.

Click here to read more on the story: Rail freight deal still needs worker support as voting begins