DAILY MARKET REPORTS
- Wall Street’s three main indexes rose more than 1% on Friday morning, bouncing back from a steep selloff this week that pushed the Dow Jones Industrial Average and the S&P 500 into correction territory.
- Stocks had plunged 4 percent on Thursday, sending the Dow and the S&P more than 10 percent below their record highs on Jan. 26.
- The market’s main gauge of volatility, the CBOE Volatility Index VIX, was at 30.5 points on Friday, down 3 from Thursday and well below the two-and-a-half-year high of 50.30 on Tuesday.
- With Wall Street’s quarterly earnings season more than half-way through, 78.3 percent of the S&P 500 companies that have reported so far have beaten profit expectations, above the 72 percent beat-rate in the past four quarters.
- Chipmaker Nvidia was up about 6.7 percent in premarket trading after its upbeat results and forecast.
- Expedia shares sank 14.5 percent after the online travel services company said costs would outpace revenue growth this year as it battles rivals for market share.
- FedEx and UPS dropped more than 1 percent after the Wall Street Journal reported Amazon.com will be launching its own delivery service.
US FINANCIAL MARKET
Nvidia shares surge more than 10% after big beat, strong outlook
- The chipmaker’s quarterly results and outlook roared past Wall Street estimates, and investors appeared unconcerned that auto-chip sales missed analyst targets for another quarter.
- The company reported fourth-quarter net income of $1.12 billion, compared with $655 million in the year-ago period.
- Revenue rose to $2.91 billion from $2.17 billion in the year-ago period. Wall Street had expected revenue of $2.68 billion.
- Gaming revenue rose 29% to $1.74 billion.
- Data-center revenue soared 105% to $606 million.
- Data visualization revenue rose 13% to $254 million.
Expedia Shares Slide as Costs Weigh on Bottom Line
- Expedia Shares plunged more than 18% in extended trading Thursday after the travel company reported earnings were hurt by increased spending.
- Rising costs in the fourth quarter outpaced sales growth, and the company forecast even more spending ahead as it focuses on cloud infrastructure and marketing investments.
- Sales grew 11% to $2.32 billion in the fourth quarter, but total expenses jumped 16%.
- The company reported a profit of $55.2 million, down from $79.5 million a year earlier.
News Corp quarterly revenue rises 3 percent
- News Corp reported a 3 percent rise in quarterly revenue helped by growth in its digital real estate business.
- Total revenue rose to $2.18 billion from $2.12 billion, analysts had expected $2.13 billion.
- Revenue from New Corp’s online real-estate business rose about 21 percent to $292 million, while its book publishing and cable network programming units also recorded a rise in sales.
- The company’s Dow Jones unit helped drive gains on the back of continued digital subscriber growth at the Wall Street Journal. The newspaper’s average daily digital subscribers jumped 28.6 percent to about 1.4 million.
- Net loss narrowed to $83 million in the second quarter from a loss of $289 million a year earlier.
- The company said it recorded a charge of $174 million related to the new U.S. tax law.
AIG posts $6.7 billion loss on tax reform, catastrophes
- American International Group posted a $6.7 billion fourth-quarter loss on as the U.S. insurer booked a big charge related to U.S. tax reform and losses from global catastrophes.
- AIG’s general insurance business posted just $13 million in adjusted pretax income, compared with a $4.9 billion loss in the year-ago quarter, which was affected by a review that caused AIG to significantly boost reserves.
- AIG booked $762 million of catastrophe losses during the quarter, largely from wildfires that raged through California and caused significant damage to homes and businesses.
- Excluding one-time items, adjusted fourth-quarter earnings were $526 million, compared with an adjusted loss of $2.8 billion in the same period a year earlier.
‘Call of Duty’ drives big holiday quarter for Activision Blizzard
- Activision Blizzard beat analysts’ expectations for revenue in the final quarter of 2017, helped by robust Christmas buying of its blockbuster “Call of Duty” videogame and higher digital sales.
- Revenue rose to $2.04 billion from $2.01 billion in the year-ago period. Analysts surveyed by FactSet had estimated revenue of $1.88 billion.
- Activision reported fourth-quarter losses of $584 million compared with net income of $254 million in the year-ago period.
- Activision Blizzard had 385 million Monthly Active Users in the quarter, up from 384 million last quarter.
- For the year, Activision Blizzard’s net revenues were a record $7.02 billion, as compared with $6.61 billion for 2016.
- Activision forecast 2018 revenue of $7.45 billion. Analysts were expecting revenue of $7.41 billion.
Exchange operator CBOE profit soars on tax benefit
- CBOE Global Markets’ fourth-quarter profit surged as the largest U.S. options exchange benefited from a $191.5 million one-time gain related to new U.S. tax laws.
- Revenue more than tripled year-over-year to $620.7 million.
- Net income rose to $254.6 million in the quarter, from $44.7 million a year earlier.
Qualcomm rejects Broadcom’s revised buyout offer
- Chipmaker Qualcomm said its board had unanimously rejected Broadcom’s revised $121 billion buyout offer.
- The board has determined that Broadcom’s proposal “materially undervalues” Qualcomm and falls short of the firm regulatory commitment it would demand given the significant downside risk of a failed transaction.
- Qualcomm warned it could lose two large clients if it accepted chipmaker Broadcom’s revised $121 billion buyout offer and said it saw “no next step” for regulatory approval of any deal.
- The statement said two customers worth more than $1 billion annually in chip sales had told Qualcomm they were likely to move designs away from the company if the Broadcom deal went ahead.
Amazon to Launch Delivery Service That Would Vie with FedEx, UPS
- Amazon is preparing to launch a delivery service for businesses, positioning it to directly compete with United Parcel Service and FedEx.
- Dubbed “Shipping with Amazon,” or SWA, the new service will entail the tech giant picking up packages from businesses and shipping them to consumers, according to people familiar with the matter.
- Amazon expects to roll out the new delivery service in Los Angeles in coming weeks with third-party merchants that sell goods via its website.
Viacom Inches Closer to a Deal
- For CBS, which announced last week that it is evaluating a merger with Viacom, the case for a deal just got stronger.
- Viacom, owner of networks such as MTV, Comedy Central and Nickelodeon, reported net profit of $535 million on Thursday, up from $396 million a year earlier.
- Revenue still fell 7.6%, to $3.07 billion.
- Paramount, Viacom’s movie division, was a particular black spot, with revenue falling 28% in the quarter thanks to a series of poor releases.
US ECONOMY & POLITIC
Trump signs spending bill into law, ending short shutdown
- Donald Trump signed a stopgap funding measure into law, ending a short federal government shutdown after Congress let a midnight deadline slip.
- The bill extends government funding through March 23 to keep agencies open while separately raising military and domestic spending by almost $300 billion over two years financed through borrowed money.
- It also extends the federal debt ceiling to March 2019.
Wholesale inventories up 0.4% in December
- The Commerce Department’s survey of wholesalers’ inventories increased 0.4 percent in December to a value of $612.1 billion, beating estimates of 0.2 percent from a survey of Reuters economists.
EUROPE & WORLD
Amid Tense Geopolitical Backdrop, Pyeongchang Opening Ceremony Stresses Harmony
- Opening ceremony for the Winter Olympics was attended by the younger sister of North Korean leader Kim Jong Un, a surprise last-minute guest whose every move was tracked closely by the South Korean media.
- U.S. Vice President Mike Pence, who earlier in the day called North Korea “the most tyrannical regime on the planet,” was among the attendees.
- The ceremony itself was filled with nods to traditional Korean motifs, including the yin-yang symbol of cosmic harmony that appears on the South Korean flag.
- The two Koreas have walked into the Olympic Opening Ceremony together three times before, but never against such a backdrop of geopolitical crisis.
TODAY in HISTORY
- Jefferson Davis was chosen as the president of the Confederate States of America. (1861)
- The battle of Guadalcanal ended with an American victory. (1943)
- Lithuanians voted overwhelmingly for independence from the Soviet Union. (1991)
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