DAILY MARKET REPORTS
- U.S. stocks gained on Thursday, boosted by high-flying shares of Apple and Amazon, and the Federal Reserve’s confidence in the strength of the economy as it raised rates for the third time this year.
- The Fed on Wednesday also left its monetary policy outlook for the coming years largely unchanged and while Wall Street initially rose on the day, the rally quickly fizzled as investors digested the implications of the end of an era of “accommodative” monetary policy.
- While Apple boosted techs, one of the drags was Accenture, which fell 1.9% as the company’s full-year profit fell short of analysts’ estimates.
- Cruise operator Carnival tumbled 8.5% after its fourth-quarter forecast missed estimates.
- Norwegian Cruise Line and Royal Caribbean slid 4.5% each, anchoring the bottom of the S&P.
- Joining them was Conagra, which dropped 6% after posting quarterly revenue that missed analysts’ estimates.
US FINANCIAL MARKET
- Accenture’s fourth-quarter revenue and profit beat estimates as investments in its digital and cloud services businesses paid off.
- Net revenue rose to $10.15 billion, ahead of estimates of $10.01 billion.
- Revenue from its digital, cloud and security-related services made up more than 60% of total revenue.
- Net income rose to $1.03 billion, from $932.5 million a year earlier.
- Accenture, however, forecast full-year profit between $6.98 to $7.25 per share, below analyst’s estimate of $7.28 per share.
Carnival profit rises on higher ticket prices, on-board spending
- Carnival on Thursday forecast fourth-quarter profit below estimates as the world’s largest cruise operator expects to take a hit from higher fuel costs, sending its shares down as much as 8.6%.
- Carnival’s net revenue rose to $5.84 billion from $5.52 billion, above estimates of $5.81 billion.
- The company’s net income rose to $1.71 billion in the third quarter, from $1.33 billion a year earlier.
- The company said it expected fourth-quarter earnings of 65 cents to 69 cents per share, well below analysts’ estimate of 73 cents.
Conagra results fall just short, shares down
- Sales at Conagra Brands fell short of Wall Street estimates on Thursday as the packaged food company sold fewer products at full-price to restaurants and caterers, weakening profit and sending shares in the company lower.
- Net sales for the Reddi-Wip whipped cream maker rose 1.7% to $1.83 billion, below expected sales of $1.85 billion.
- Sales at the food service business that delivers ingredients and foodstuffs to professional caterers and chains fell 6.9% to $234 million in the quarter compared to analyst expectations of $246 million.
- Net income rose to $178.2 million in the first quarter, below estimates.
Bed Bath posts surprise fall in same-store sales, shares drop 15%
- Home furnishing retailer Bed Bath & Beyond on Wednesday reported a surprise fall in comparable store sales amid intense competition and cut its full-year forecasts, sending its shares down 15% in extended trading.
- The New Jersey-based company’s net sales of $2.94 billion missed the Wall Street estimate of $2.96 billion.
- The company’s same–store sales fell 0.6% in the second quarter, continuing their slide for the sixth straight quarter.
- Analysts on average had expected a rise of 0.33% in comparable sales.
- The company’s net income plunged to $48.6 million, from $94.2 million a year earlier.
Rite Aid overhauls board after failed Albertsons merger
- Rite Aid announced the changes as it reported fiscal second-quarter earnings that met Wall Street’s expectations and revenue that slightly surpassed them.
- The drugstore chain’s revenue hit $5.42 billion, slightly above the $5.36 billion Wall Street had anticipated.
- Same-store sales increased 1% from the same quarter last year, including a 1.6% increase in pharmacy sales and a 0.1% decrease in front-end sales.
- The company reported a net loss of $352.3 million, as it incurred $282.6 million in intangible asset impairment charges related to its pharmacy services segment.
Papa John’s asks potential acquirers to submit offers: sources
- Papa John’s, the world’s third-largest pizza delivery company, has reached out to potential acquirers to ask them to submit offers, people familiar with the matter said on Wednesday.
- Papa John’s sent out information this week about an auction to sell itself to other companies and private equity firms, and expects to receive first-round bids by the end of October, the sources said.
- Papa John’s has come under pressure by founder John Schnatter, who owns about 30% of the company and resigned as chairman in July following reports that he had used a racial slur on a media training conference call.
Athenahealth receives multiple bids, sources say
- Athenahealth, which initiated a strategic review in June and said it would consider a sale or merger or remaining as an independent company, has received multiple bids, sources tell CNBC.
- The bids are not seen as being far above the stock price of $131 before the latest news, but the Athenahealth board is motivated to get a deal done, the sources said.
- Interest is coming from two private equity firms and one strategic buyer, the sources said.
Saudi Arabia in short-term oil fix, fears extra U.S. supply next year
- Saudi Arabia will quietly add extra oil to the market over the next couple of months to offset a drop in Iranian production but is worried it might need to limit output next year to balance global supply and demand as the United States pumps more crude.
- Two sources familiar with OPEC policy said Saudi Arabia and other producers discussed a possible production increase of about 500,000 barrels per day (bpd) among the Organization of the Petroleum Exporting Countries and non-OPEC allies.
- But Riyadh decided against pressing for an official increase now as it realized it would not secure agreement from all producers present at the talks, some of which lack spare production capacity and would be unable to boost output quickly.
- However, OPEC’s latest report released at the weekend forecast that its non-OPEC rivals led by the United States would increase output by 2.4 million bpd in 2019 while global oil demand should grow by just 1.5 million bpd.
US ECONOMY & POLITIC
- The Commerce Department confirmed in a second report on Thursday that the economy grew at a 4.2% annualized rate in the second quarter.
- That was the fastest in nearly four years and almost double the 2.2% pace set in the first quarter.
- Exports of goods fell 1.6% to $137.9 billion, weighed down by a 9.5% plunge in shipments of food, feeds and beverages.
- Imports of goods increased 0.7% to $213.7 billion in August, driven by motor vehicles, consumer and other goods.
Fed raises U.S. interest rates, sees at least three more years of growth
- The U.S. Federal Reserve raised interest rates on Wednesday and left intact its plans to steadily tighten monetary policy, as it forecast that the U.S. economy would enjoy at least three more years of growth.
- In a statement that marked the end of the era of “accommodative” monetary policy, Fed policymakers lifted the benchmark overnight lending rate by a quarter of a percentage point to a range of 2.00% to 2.25%.
- The U.S. central bank still foresees another rate hike in December, three more next year, and one increase in 2020.
- The Fed sees the economy growing at a faster-than-expected 3.1% this year and continuing to expand moderately for at least three more years, amid sustained low unemployment and stable inflation near its 2% target.
U.S. core capital goods orders fall; goods trade deficit widens
- New orders for key U.S.-made capital goods fell in August after four straight months of strong gains, while shipments barely rose, but that will probably not change expectations of solid growth in business spending on equipment in the third quarter.
- The Commerce Department said orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, dropped 0.5% last month as demand for computers and electronic products as well motor vehicles ebbed.
- Economists polled by Reuters had forecast orders for these goods rising 0.4% last month.
US weekly jobless claims rise more than expected
- The number of Americans filing for unemployment benefits increased more than expected last week likely as Hurricane Florence temporarily displaced some workers, but the underlying trend continued to point to a tightening labor market.
- Initial claims for state unemployment benefits rose 12,000 to a seasonally adjusted level of 214,000 for the week ended Sept. 22.
- Economists had forecast claims rising to 210,000 in the latest week.
- Hurricane Florence lashed parts of the South last week, causing flooding and sending people into emergency shelters.
- The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose only 250 to 206,250 last week.
U.S. pending home sales decline in August
- Contracts to buy previously owned homes declined more than expected in August and have now fallen on an annual basis for eight consecutive months, the latest indication that the housing market is struggling to regain momentum.
- The National Association of Realtors said on Thursday its Pending Home Sales Index, based on contracts signed last month, declined 1.8% to a reading of 104.2 amid an inventory shortage and a rise in prices that has sidelined many buyers.
- Economists had forecast pending home sales falling 0.4% in August. It was the fourth decline in the last five months.
Trump slams Canada over NAFTA, says rejected Trudeau meeting
- U.S. President Donald Trump on Wednesday blasted Canada over the slow pace of talks over NAFTA, saying he was so unhappy that he had rejected Canadian Prime Minister Justin Trudeau’s request for a one-on-one meeting.
- Trudeau spokeswoman Chantal Gagnon said: “No meeting was requested. We don’t have any comment beyond that.”
- The attack cast further doubt on the future of the three-nation North American Free Trade Agreement, which underpins $1.2 trillion in annual trade between Canada, Mexico and the United States.
- Earlier on Wednesday, Trudeau shrugged off U.S. pressure to quickly agree to a deal and indicated it was possible the three member nations might fail to conclude a new pact.
EUROPE & WORLD
- Several large Chinese companies, including tech giant Alibaba, are actively looking at opportunities in Turkey and have met with Turkish firms after the lira’s sell-off has made local assets cheaper, sources familiar with the talks said.
- The talks in Istanbul started in mid-August when Turkey was at the height of its currency crisis, four sources said.
- In addition to Alibaba, which earlier this year purchased Turkish online retailer Trendyol, other companies holding talks included China Life Insurance and conglomerate China Merchants Group.
- Turkey’s lira has fallen some 40% so far this year, hit by concerns about President Tayyip Erdogan’s control over monetary policy and a diplomatic rift with the United States.
Italy budget uncertainty returns to haunt Europe
- Europe’s share markets and the euro both took a tumble on Thursday as reports that Italy’s long-awaited budget was facing a delay compounded an already groggy global mood after the third U.S. interest rate rise of the year.
- Italy’s main Milan bourse slumped as much as 2% with the country’s big banks down even more as the country’s borrowing costs also hit a three-week high in the government bond markets.
- Rome confirmed that a cabinet meeting over budget targets was still planned for later, dismissing an earlier report in the Corriere della Sera newspaper that it could be delayed.
- Investors have been anxious about Italy’s budget which some fear could lead to a blowout of the country’s deficit, and put the coalition government on a collision course with the European Union.
TODAY in HISTORY
- Warsaw, Poland, was surrendered to the Nazis after weeks of resistance. (1939)
- The Warren Commission report concluded that there was no conspiracy in the assassination of President John F. Kennedy; Lee Harvey Oswald acted alone. (1964)
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