US FINANCIAL MARKET

Stocks Waver as Jobless Claims Rise – Wall Street Journal, 7/22/2021

• U.S. stocks wavered around the flatline Thursday, pausing after two strong days of gains.
• In recent days, stocks had resumed their monthslong rally, erasing most of their losses from the sharp drop on Monday when the spread of the Delta variant raised alarms about renewed lockdown measures. Investors have since sent the major indexes back up to less than 1% below their all-time highs.
• Semiconductor company Texas Instruments slipped 4.8% after it signaled a likely slowdown in growth in the third quarter.
• Casino operator Las Vegas Sands declined 3.8% after it reported revenue that missed analysts’ estimates and a bigger loss than expected.
• Domino’s Pizza rose 7.1% after reporting earnings that beat estimates and disclosing a new share repurchase program.
• Earlier Thursday, the Labor Department’s latest data on jobless claims, viewed as a proxy for layoffs, showed that 419,000 people applied for unemployment insurance last week. That was up from the preceding week.
• Economists had been expecting claims to fall to a new pandemic low.
• Overseas, the pan-continental Stoxx Europe 600 added 0.6%.
• The European Central Bank left key interest rates unchanged in its latest monetary policy decision and said it may keep rates at current levels or below until it sees inflation stabilizing at 2%.
• Benchmark Italian, Spanish and Portuguese government bonds rallied on the prospect of longer-term monetary support. The yield on Spain’s 10-year bond declined to 0.220% from 0.280% on Wednesday.
• In Asia, most major benchmarks rose by the close of trading. The Shanghai Composite Index edged up 0.3%, and Hong Kong’s Hang Seng Index rose 1.8%. Japanese markets were closed for a holiday.

American Airlines beats second-quarter revenue estimates as travel recovers – Reuters, 7/22/2021

• American Airlines beat Wall Street estimates for second-quarter revenue on the back of a recovery in demand as leisure travel rebounds from pandemic lows.
• Total operating revenue jumped 361% to $7.48 billion. Analysts, on average, expected a revenue of $7.34 billion, according to Refinitiv data.
• The U.S airline posted a net income of $19 million, or 3 cents per share, in the quarter ended June 30, compared with a loss of $2.07 billion, or $4.82 per share, a year earlier.
• The airline reported positive cash flow in the second quarter for the first time since the pandemic began, reversing a trend of cash burn of about $100 million a day when global travel had ground to a halt.
• The airline reported a cash build rate of about $1 million per day in the second quarter.

Southwest Airlines losses narrow as leisure travel bounces back – Reuters, 7/22/2021

• Southwest Airlines on Thursday reported a smaller quarterly loss and said it would remain profitable for the rest of the year, as leisure bookings rebound thanks to aggressive vaccination drives.
• Total operating revenue rose nearly 300% to $4 billion from a year earlier, but fell about 32% from 2019.
• Excluding items, Dallas-based Southwest’s net loss narrowed to $206 million, or 35 cents per share, in the second quarter, from $1.50 billion, or $2.67 per share, a year earlier.
• June leisure passenger traffic rose above June 2019 levels while passenger fares were on par with the same period two years ago, Chief Executive Officer Gary Kelly said, adding that the company expected to see further improvement in July.
• Southwest said it now expects July operating revenue to drop between 10% and 15% compared with the same period in 2019, an improvement from its prior forecast of a fall between 15% and 20%.
• The company expects August operating revenue to decline between 12% and 17% from two years earlier.

AT&T raises forecast for revenue, HBO Max as business recovers from pandemic – Reuters, 7/22/2021

• AT&T on Thursday raised its full-year financial forecast as the telecoms company emerged from the pandemic with more wireless and internet customers, and beat analyst estimates for phone subscribers and revenue in the second quarter.
• Total revenue at AT&T rose 7.6% to $44 billion, beating analysts’ average estimate of $42.67 billion, according to IBES data from Refinitiv.
• The company added 789,000 net new phone subscribers who pay a monthly bill during the quarter ended June 30, blowing past Wall Street estimates of 278,000 new subscribers, according to data from research firm FactSet.
• WarnerMedia added 2.8 million U.S. subscribers for its premium channel HBO and streaming platform HBO Max during the quarter, thanks to new movies like Lin-Manuel Miranda’s “In the Heights” and “Mortal Kombat,” which is based on the popular video game.
• Globally, HBO and HBO Max now have 67.5 million subscribers, compared with 209 million subscribers for Netflix.
• Net income attributable to common stock rose to $1.5 billion, or 21 cents per share, in the second quarter, from $1.2 billion, or 17 cents per share, a year earlier.
• AT&T raised its forecast for global HBO Max subscribers to between 70 million and 73 million by the end of the year. It previously expected 67 million to 70 million subscribers.
• Excluding impacts from the DirecTV and TPG deal, AT&T now expects 2021 revenue growth in the 2% to 3% range and adjusted earnings per share to rise in the low- to mid-single digits.

U.S. railroad operator Union Pacific’s quarterly profit jumps 59% – Reuters, 7/22/2021

• Top U.S. railroad operator Union Pacific reported a 59% jump in its quarterly profit on Thursday, as it shipped more industrial chemicals, metals, petroleum, and liquefied petroleum gas.
• The company’s revenue rose 29.7% to $5.504 billion from $4.24 billion a year ago, while operating ratio — a key profitability metric — improved to 55.1% from 61%.
• Union Pacific, the largest U.S. railroad operator by market value, also said its second-quarter volumes increased 22%.
• The company’s net income for the second quarter, that ended on June 30, rose to $1.798 billion from $1.13 billion a year ago.

D.R. Horton slows home orders due to supply constraints – Reuters, 7/22/2021

• D.R. Horton said on Thursday a slowdown in its homebuilding driven by high lumber prices and the shortage of labor affecting the U.S. economy had forced it to take fewer orders for new homes in recent months.
• Revenue jumped 35% to $7.28 billion, above estimates of $7.19 billion.
• But the company said sales orders fell by 16.5% in the three months ended June 30.
• The company’s third-quarter profit jumped 77% to $1.12 billion as it benefited from record-high property prices due to high demand. Adjusted earnings of $3.11 per share topped estimates of $2.81.
• Horton expects full-year revenue between $27.6 billion and $28.1 billion, marginally above estimates of 27.35 billion, according to Refinitiv data.
• It expects 2021 home sales between 83,000 units and 84,500 units, while analysts’ estimate sales of 83,475 homes.

Abbott beats profit estimates as medical device sales rebound – Reuters, 7/22/2021

• Abbott Laboratories beat quarterly profit estimates on Thursday, driven by a rebound in its non-COVID-19 testing business and sales of its medical devices as vaccinations encouraged Americans to resume non-urgent procedures.
• Abbott said its second-quarter sales, excluding COVID testing, rose more than 11% on an organic basis from the pre-pandemic levels recorded in 2019.
• Its worldwide diagnostics revenue, excluding coronavirus testing, increased 42.5% from a year earlier, while medical devices sales rose 51.3% on the back of growth in its heart devices business.
• But the rise in vaccinations pulled down its COVID-19 testing-related sales to $1.3 billion, from $2.2 billion in the previous quarter.
• Excluding items, Abbott earned $1.17 per share, beating analysts’ estimates of $1.02 per share, according to Refinitiv IBES data.
• The company reiterated its 2021 adjusted earnings forecast of $4.30 to $4.50 per share from continuing operations.

Dow gives upbeat sales forecast as reopening economies drive demand – Reuters, 7/22/2021

• Chemicals maker Dow on Thursday forecast better-than-expected sales for the current quarter, betting on increased industrial production, and higher consumer spending as economies emerge from pandemic-led lockdowns.
• Net sales of $13.89 billion also topped estimates of $13.07 billion.
• Product prices jumped 16% in the second quarter from the prior period, while volumes rose 1%, helped by growing demand in infrastructure, industrial and personal-care end markets.
• Adjusted net operating income doubled to $2.72 per share and beat estimates of $2.45, according to Refinitiv IBES data.
• The company said it was expecting third-quarter net sales of between $13.75 billion and $14.25 billion, well above the estimates of $12.64 billion, according to Refinitiv IBES data.

Domino’s delivers upbeat results as new menu items boost sales – Reuters, 7/22/2021

• Domino’s Pizza beat market estimates for quarterly revenue and profit on Thursday, as the world’s biggest pizza chain strove to carry on the momentum of 18 months when millions of Americans ordered in more than ever before.
• Total revenue rose 12.2% to $1.03 billion, beating estimates of $972.3 million, according to IBES data from Refinitiv.
• Its new flavor of chicken wings as well as cheeseburger and chicken taco pizzas helped U.S. same-store sales rise 3.5%, marking 41 consecutive quarters of increases, while analysts were expecting a 1.3% decline.
• International same-store sales growth of 13.9% was also well above the 8.9% jump expected by analysts. That boost came from fresh lockdowns in countries, including the United Kingdom and India, where people relied on online ordering.
• On an adjusted basis, Domino’s earned $3.12 per share, beating estimates of $2.87.

Blackstone doubles second quarter earnings on surging asset sales – Reuters, 7/22/2021

• Blackstone, the world’s largest private equity firm, said on Thursday its second quarter distributable earnings nearly doubled year on year driven by a surge in asset sales across its real estate, private equity, credit and insurance businesses.
• Distributable earnings, which represents the cash used to pay dividends to shareholders, rose to $1.1 billion from $548 million a year earlier.
• This translated into a distributable earnings per share of 82 cents, surpassing the average Wall Street analyst estimate of 78 cents, data compiled by Refinitiv showed.
• The buyout firm said its private equity portfolio grew 13.8% in the second quarter, compared with a 8.2% rise in the benchmark S&P 500 stock index over the same period. Opportunistic and core real estate funds rose 9.4% and 5.7%, respectively.
• Its total assets under management rose to $684 billion from $648.8 billion in the prior quarter. Unspent capital fell to $129.9 billion from $148.2 billion three months earlier owing to the pace of capital deployments.

Uber’s Freight Unit to Buy Logistics Tech Firm Transplace for $2.25 Billion – Wall Street Journal, 7/22/2021

• Uber Technologies’s Freight unit is buying technology-focused logistics services provider Transplace in a cash and stock transaction deal worth about $2.25 billion that extends the ride-hailing giant’s reach into the U.S. domestic shipping sector.
• Under the agreement, Uber will pay up to $750 million in common stock of Uber Freight’s parent company and the rest in cash to TPG Capital.
• Freight is just a sliver of Uber’s overall business, providing $302 million in gross bookings of the company’s overall revenue of $19.5 billion in gross bookings in the three months ending March 31.
• The company is seeking to bring greater efficiency through digital bookings to the domestic shipping sector but faces strong competition from traditional middlemen that match freight loads to available trucks and from a lineup of tech-focused startups including Convoy and Transfix Inc.

GM will cut truck production amid semiconductor shortage – Reuters, 7/21/2021

• General Motors said Wednesday it will cut some truck production in North America because of the ongoing global semiconductor shortage.
• The largest U.S. automaker said its Flint Assembly plant that builds the Chevrolet Silverado HD and GMC Sierra HD trucks will operate on one production shift the week of July 26.
• GM said its Ft. Wayne Assembly plant in Indiana that builds the Chevrolet Silverado 1500 and GMC Sierra 1500 model trucks will be idled next week. GM’s Silao Assembly plant in Mexico that also builds the Chevrolet Silverado 1500, Cheyenne and GMC Sierra 1500 will also suspend production next week.
• All three plants are expected to resume regular production the week of Aug.2