STOCKS OPENED LOWER ON EARNINGS CONCERNS, OIL-PRICE DECLINE
- British pound stabilizes after four days of declines.
- Shares of Illumina, up 0.2%, tumbled 25% on Tuesday after the company cut its revenue guidance.
- Europe’s technology sector was down 2.3%, leading declines, after Ericsson issued a profit warning for the third quarter.
- Shares in the Swedish company fell more than 17%, while Nordic rival Nokia fell 4.6%.
- Fed-fund futures, used by investors to bet on central bank policy, currently imply a more than 70% chance of a rate rise by December.
- Minutes from the Fed’s September meeting are due later today.
- In bonds, the yield on the 10-year U.S. Treasury note rose to 1.799% from 1.760% on Tuesday.
US FINANCIAL MARKET
- South Korean technology giant cuts third-quarter operating profit estimate by a third to $4.62 billion.
- It also lowered its expected revenue for the quarter to 47 trillion won from an original estimate of 49 trillion won.
- The full impact of the crisis over phones that are at risk of catching fire will play out over several months.
- On Tuesday, most analysts pegged the cost of the Galaxy Note 7 debacle at about $4 billion, including recall expenses and lost sales.
- Distinguishing Amazon Music Unlimited, which was to launch Wednesday: Customers using the retail giant’s voice-activated Echo speakers will pay just $3.99 a month—less than half the $9.99 charged by most rivals—and will be able to stream music in a markedly different way.
- Users can ask the Echo’s robotic assistant Alexa to play a certain band’s “new song” without knowing the title, a certain act’s music from a particular decade or a song that features particular lyrics, even if they can’t recall the song title or artist.
- The country’s largest carrier by fleet size has signed an agreement with Boeing to buy a dozen 787-9 jets worth $3.3 billion.
- Each of the 12 mid-size jets comes at a catalogue price of $271 million.
- China is the world’s fastest-growing aviation market.
- The No. 4 U.S. wireless carrier said on Wednesday it planned to raise an initial $3.5 billion by mortgaging about 14% of its wireless airwaves.
- The company, majority owned by Japan’s SoftBank, estimates the airwaves are worth about $16.4 billion.
- Sprint raised $1.2 billion in November and $2.2 billion in April through similar sale and lease-back deals.
- Toyota is recalling around 340,000 of its latest Prius gasoline hybrid model in Japan and overseas to fix a parking brake issue.
- BMW is recalling 33,026 cars of the X3 F25 and X4 F26 models to fix a problem with the Isofix child-restraint anchors.
- Illumina said it expects fourth-quarter revenue will be flat to slightly higher than during third quarter.
- The San Diego, Calif., company now expects revenue of roughly $607 million for the quarter, compared with its previous projection for revenue between $625 million and $630 million.
US ECONOMY & POLITICS
- The technology revolution has delivered Google searches, Facebook friends, iPhone apps, Twitter rants and shopping for almost anything on Amazon, all in the past decade and a half.
- What it hasn’t delivered are many jobs.
- Google’s Alphabet and Facebook had at the end of last year a total of 74,505 employees, about one-third fewer than Microsoft even though their combined stock-market value is twice as big.
- Photo-sharing service Instagram had 13 employees when it was acquired for $1 billion by Facebook in 2012.
EUROPE & WORLD
- The data eases concerns about the immediate impact of the falling pound on eurozone exports.
- Industrial output in the eurozone was 1.6% higher than in July, and 1.8% up on August 2015.
- That was a slightly stronger performance than had been expected.
- Warning comes just a week after announcement of thousands of job cuts.
- Ericsson, one of the world’s largest makers of telecom equipment, Wednesday capped a series of management shake-up and job–cut announcements with a profit warning that sent its share price tumbling and laid bare how the rise of Asian rivals has wounded Western suppliers.
- Sweden’s flagship tech company said its third-quarter earnings would almost completely evaporate, citing a 19% sales decline in its core mobile-network equipment business, while its gross margin fell to 28% from 34% in the same period last year.
- The Swedish company is betting big on the development of faster wireless networks, called 5G, and software-based systems such as the so-called Internet of Things, with connectivity built into everyday objects such as fridges.
- But the first revenue from 5G is several years away, analysts say.
TODAY in HISTORY
Columbus landed in present-day Bahamas (1492)
Soviet premier Nikita Krushchev created a disturbance at the U.N. General Assembly by pounding his desk with his shoe (1960)
The Soviets launched Voskhod I, the first space capsule to carry three people into orbit (1964)
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