STOCK MARKET NEWS: Dow tumbles over 600 points on fear of additional Fed hikes

Zoom Video Communications Inc on Monday cut its annual profit and revenue forecast, as the video-conferencing platform invests in its products to sustain demand while grappling with intensifying competition.

Analysts have raised concerns about Zoom's prospects as the pandemic recedes and competitors such as Microsoft's Teams, Cisco's WebEx and Google's Meet fight for video-conferencing market share.

Moreover, Zoom has the uphill task of onboarding large clients, which contribute more than $100,000 in revenue, to sustain its pandemic-levels of growth at a time when companies are grappling with decades-high inflation.

Zoom now expects annual adjusted profit per share between $3.66 and $3.69, compared with $3.70 to $3.77 forecast earlier.

It forecast revenue between $4.39 billion and $4.40 billion, compared with its earlier outlook of $4.53 billion to $4.55 billion.

Zoom, which saw demand spike for its tools during the height of the pandemic, also reported its slowest revenue growth on record at 8% to $1.1 billion in the second quarter ended July 31.

Palo Alto Networks is higher in after-hours trading. The cybersecurity company reported quarterly revenue that matched Wall Street estimates and beat on profit.

Fiscal fourth quarter revenue grew 27% year over year to $1.55 billion. The analyst estimate was $1.54 billion.

Net income was $3.3 million for the three months ended July 31 compared to a year ago loss $119.3 million.

Net income per diluted share was $2.39 per share compared to the estimate of $2.28.

The company expects fiscal 2023 revenue of $6.85 billion to $6.90 billion, representing year-over-year growth of 25% and diluted non-GAAP net income per share in the range of $9.40 to $9.50.

The board also authorized an additional $915 million for share repurchase, increasing the remaining authorization for future share repurchases to $1 billion, expiring December 31, 2023.

MARKETS

Bed Bath & Beyond's wild week: What to know

Bed Bath & Beyond shares have jumped more than 268% this month with much of the volatility driven by the retailer’s second largest shareholder, Ryan Cohen’s RC Ventures.

Bed Bath & Beyond continues a three-day decline that has seen its share price fall by more than half.

S&P Global Ratings lowered the company’s credit rating to 'CCC' from 'B-'. Both ratings are considered “junk.”

“We believe BBBY's turn-around prospects have deteriorated given its significant challenges amid highly unfavorable macroeconomic conditions,” S&P said. “Notably, we believe BBBY could face lower holiday sales if it is unable to win back customers in the coming months."

The downgrade comes as Bloomberg reports some shipments have been halted by suppliers over unpaid unpaid bills.

Asbury Research chief market strategist John Kasar provides insight on how investors are responding to the Federal Reserve's moves on 'Making Money.'

Twitter logo seen displayed on a smartphone screen. (Sheldon Cooper/SOPA Images/LightRocket via Getty Images)

Elon Musk has subpoenaed former Twitter CEO Jack Dorsey. The summons instructs Dorsey to respond in writing and produce certain books, documents, or tangible things within seven days.

The subpoena is part of the scheduled October trial in the Delaware Court of Chancery over Musk’s attempt to walk away from his $44 billion deal to buy the social media company.

Ford is laying off approximately 2,000 salaried employees and about 1,000 agency personnel as it looks to lead a new era of connected and electric vehicles. 

"Building this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century," Ford Executive Chairman Bill Ford and CEO Jim Farley said in a letter to employees on Monday. "It requires focus, clarity and speed. And, as we have discussed in recent months, it means redeploying resources and addressing our cost structure, which is uncompetitive versus traditional and new competitors."

The automaker will inform affected employees in the United States, Canada and at Ford Business Solutions in India this week.

A syringe is prepared with the Pfizer COVID-19 vaccine at a vaccination clinic in Chester, Pa., Dec. 15, 2021. (AP Photo/Matt Rourke)

Pfizer and BioNTech have completed submitting an application asking the Food and Drug Administration to grant emergency use authorization for its Omicron booster shot for people 12 and older.

A conditional marketing authorization application has also been initiated with the European Medicines Agency.

“Having rapidly scaled up production, we are positioned to immediately begin distribution of the bivalent Omicron BA.4/BA.5 boosters, if authorized, to help protect individuals and families as we prepare for potential fall and winter surges," Pfizer chair and CEO Albert Bourla said.

eBay is buying collectible card marketplace TCGplayer in a deal valued at $295 million.

TCGplayer is a leading technology platform for the collectibles industry, and will continue to operate autonomously as one of the largest online marketplaces for trading card games.

The acquisition complements eBay's focus category strategy and furthers the company's commitment to trading card enthusiasts.

"This new chapter allows us to continue operating independently within eBay, while also benefiting from their decades of industry experience and resources to deepen the connection between hobbyists and their communities," said Chedy Hampson, Founder and CEO of TCGplayer.

The transaction is expected to close in the first quarter of 2023.

Pharvaris plunged in Monday trading. The Swiss-based clinical-stage drug developer announced the Food and Drug Administration placed a clinical hold on the clinical trials of PHA121 in the U.S.

PHA121 is an oral therapy for hereditary angioedema attacks. HAE can create in rapid swelling. Affected areas may include hands, feet, limbs and face, along with the intestinal tract, voicebox or windpipe.

Almost half of all U.S. adults are hanging on to free money from unused gift cards or vouchers or have store credits stashed away, according to new data from CreditCards.com. Each of those individuals is holding on to an average of $175, up from $116 in 2021. 

A McDonald's restaurant

McDonald's on Monday announced changes to its board of directors, including the departure of a long-serving member.

Sheila Penrose, who leads the company's sustainability and corporate responsibility committee, will retire on Sept. 30 after more than 15 years of service.

"Sheila has overseen McDonald’s critical progress against our ambitious climate, responsible sourcing and diversity, equity and inclusion goals, positioning us as a leader in the industry," Enrique Hernandez Jr., the chairman of McDonald's board, said in a statement. "We are grateful for all that she has done for McDonald’s and the communities we serve."

The board elected Marriott International CEO Tony Capuano, Johnson & Johnson Executive Vice President Jennifer Taubert and Salesforce Chief Financial Officer Amy Weaver as its newest members. They will takes their seats on Oct. 1.

People visiting the Regal Cinema in New York City. (iStock)

Cineworld, the British owner of Regal Cinemas, has confirmed that a possible bankruptcy is one option the company is considering to obtain additional liquidity and potentially restructure its balance sheet.

The second largest cinema operator behind AMC Entertainment said evaluation of options “remains ongoing” and any bankruptcy would “result in very significant dilution of existing equity interests in Cineworld."

”Cineworld is discussing options with many of its major stakeholders including its secured lenders and their legal and financial advisers," the movie theater chain said..

Wall Street futures

U.S. stock futures are lower on Monday morning, with the Dow sliding 300 points.

Meanwhile, West Texas Intermediate crude futures are trading at about $90.80 a barrel and Brent crude futures are trading at about $96.60 per barrel.

Cryptocurrency prices were lower Monday morning as the crypto market attempted to gain traction to return to where it was last week.

Cryptocurrency prices were lower early Monday, with Bitcoin and Ethereum and Dogecoin still trying to gain back losses from late last week.

At approximately 4:30 a.m. ET, Bitcoin was trading at nearly $21,000 (-2.68%), or lower by about $575.

For the week, Bitcoin was trading lower by nearly 11.5%. For the month, the cryptocurrency was lower, losing almost 7%.

Ethereum was trading at approximately $1,534 (-5.03%), or lower by more than $83.

For the week, Ethereum was trading lower by about 16.5%. However, for the month, it was trading higher by nearly 3%.

Dogecoin was trading at $0.065536 (-5.60%), or lower by approximately $0.003891. 

For the week, Dogecoin was lower by more than 15%. For the month, the crypto was lower by nearly 0.5%.

Energy Secretary Jennifer Granholm was pilloried on social media Sunday after an appearance on 'Fox News Sunday' in which she told viewers Americans feeling crushed by the weight of inflation can lower energy costs under the newly passed Inflation Reduction Act guidelines. (Getty Images)

Energy Secretary Jennifer Granholm faced criticism on social media Sunday after she said Americans being crushed by the weight of inflation can lower their energy costs by installing solar panels at a 30% discount under the Inflation Reduction Act. 

During an appearance on "Fox News Sunday," Granholm said the Democrats' $437 billion climate and health care legislation will provide thousands of dollars in tax rebates for lower- and middle-class Americans to weatherize their homes. 

"If you are low income, you can get your home entirely weatherized through the expansion from the bipartisan infrastructure laws, a significant expansion — you don't have to pay for anything," Granholm said. "If you want heat pumps, insulation, new windows, that is covered," she said.

"If you are moderate income, today you can get 30% off the price of solar panels. Those solar panels can be financed, so you don't have to have the big outlay at the front … it's a significant incentive." "If you don't qualify for the weatherization program, you will be able to, starting next year, get rebates on the appliances and equipment that will help you reduce your monthly energy bill by up to 30%," she added. "That is all about reducing costs for people."

The Inflation Reduction Act includes thousands of dollars in tax breaks and rebates for homeowners to upgrade their homes to be more energy efficient.

Households with income below 80% of the area median can claim a rebate for the full cost of their appliance upgrades, up to a $14,000 cap, and households that fall between 80% and 150% of the area median income are eligible for rebates of 50% of their cost, up to $14,000.

Gasoline and diesel prices continue to fall since reaching a high of $5.016 on June 14, nearly 10 weeks ago.

The average price of a gallon of gasoline slipped on Monday to $3.901. On Sunday, that same gallon of gasoline sold for $3.904 nationwide, according to AAA. Saturday's price was $3.908.

A week ago, a gallon of gasoline cost $3.956 nationwide. A month ago, that price was $4.413. A year ago, that same gallon of gasoline sold for $3.163 nationwide.

The price dropped below $4 for the first time since March more than a week ago, when the price fell to $3.99. 

Gas has been on the decline since hitting a high of $5.016 on June 14. 

Meanwhile, diesel slipped to $4.977 a gallon early Monday morning. On Sunday, diesel was selling for $4.982, while on Saturday, that price was from $4.984. 

A week ago, a gallon of diesel cost $5.033 nationwide. A month ago, that price was $5.455. One year ago, a gallon of diesel cost $3.283 nationwide, AAA reported.

U.S. stocks were sharply lower heading into the first day of the workweek as investors nervously await hints from the Fed on whether the central bank will raise interest rates again and by how much. (Associated Press)

U.S. stocks were lower early Monday morning as investors expressed concern about future Fed action. 

Traders worry aggressive rate hikes this year by the Fed and central banks in Europe and Asia to contain inflation that is running at multi-decade highs might derail global economic growth. 

“The Fed is still feeling inflation. Its actions have not even begun to dent inflationary pressures at all,” said Clifford Bennett of ACY Securities in a report. “Nor have they begun to crimp economic activity at all. The economic slowdown was already in play for other reasons.” 

U.S. stocks fell Friday, ending the week lower and snapping a four-week stretch of gains for the S&P 500, as investors second-guessed how aggressively the Federal Reserve will need to move to tame inflation. 

The market endured a stretch of choppy moves as traders reassessed their bets on what the Fed might do at its September meeting. For weeks, many investors had been feeling confident that inflation had possibly peaked and that the central bank would soften the magnitude of its future interest-rate increases.

But comments in recent days from central bank officials, combined with the release of the minutes from the Fed's July meeting, put the possibility of continued aggressive rate increases back in focus. 

On Thursday, Federal Reserve Bank of St. Louis President James Bullard said he would lean toward a 0.75-percentage-point increase in September. 

"This feels like a re-evaluation of whether there has been enough financial tightening," said John Roe, head of multi-asset funds at Legal & General Investment Management. "And if there hasn't actually, could we get more pain from central banks having to do more?" 

The S&P 500 dropped 55.26 points, or 1.3%, to 4228.48 and fell 1.2% for the week. The Dow Jones Industrial Average fell 292.30 points, or 0.9%, to 33706.74 and lost 0.2% for the week. The Nasdaq Composite declined 260.13 points, or 2%, to 12705.22 and fell 2.6% for the week. 

Technology stocks had some of the biggest losses. Microsoft fell 1.4%.

Retailers, banks and communications companies also fell. Next week, central bankers will meet in Jackson Hole, Wyo., for the Federal Reserve Bank of Kansas City's annual economic policy symposium.

Traders will be watching officials' speeches closely for insights on how the Fed is thinking. 

Meanwhile, Shanghai advanced after the Chinese central bank nudged down its target rate for a five-year loan to shore up weak housing sales. Tokyo, Hong Kong, Seoul and Sydney retreated.

The Shanghai Composite Index rose 0.5% to 3,272.89 while the Nikkei 225 in Tokyo sank 0.5% to 28,794.79. The Hang Seng in Hong Kong shed less than 0.2% to 19,743.12. The Kospi in South Korea gave up 1.2% to 2,462.03 and Sydney’s S&P ASX-200 fell 0.9% to 7,051.70. India's Sensex opened down 1.1%, dipping to 58,992.24. New Zealand and Singapore advanced while Bangkok and Jakarta declined.

Oil prices were lower early Monday as investors expressed concerned aggressive U.S. interest rate hikes will weaken the global economy. (Getty Images)

Oil prices slumped on Monday, ending three days of gains, as investors were concerned aggressive U.S. interest rate hikes will weaken the global economy and dent fuel demand while a strengthening dollar also added to pressure. 

Brent crude futures for October settlement declined $1.58, or 1.6%, to $95.14 a barrel by 0640 GMT. 

U.S. West Texas Intermediate (WTI) crude futures for September delivery, due to expire on Monday, were down $1.70, or 1.9%, at $89.07 a barrel.

The more active October contract was at $88.92, down $1.52, or 1.7%. 

Both Brent and WTI climbed for a third straight day on Friday, but fell about 1.5% for the week on a stronger dollar and demand fears. 

"Growing fears over a global economic slowdown are behind the fall in oil markets," said Tatsufumi Okoshi, senior economist at Nomura Securities. "A higher U.S. dollar also prompted fresh selling," he added. 

Prices also fell on worries over slowing fuel demand in China, the world's largest oil importer, because of a power crunch in the southwest caused by a heatwave. 

"China's power restriction in some regions is also a concern as it could affect economic activity," said Hiroyuki Kikukawa, general manager of research at Nissan Securities. 

China's southwestern province of Sichuan will extend curbs on industrial power consumers until Aug. 25 as it tries to deal with dwindling hydropower output and surging household electricity demand following a long heatwave, financial news service Caixin said. 

Meanwhile, the leaders of the United States, Britain, France and Germany discussed efforts to revive the 2015 Iran nuclear deal, the White House said on Sunday, though no further details were provided.