U.S. stocks ended a volatile session little changed on Friday, but still logged steep weekly losses. The S&P 500 posted its longest weekly losing streak since the dot-com bubble burst, as concerns over tighter monetary policy and the resilience of the economy and corporate profits in the face of inflation resurged.
The blue-chip index closed out a choppy session higher by just 0.01{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to settle at 3,901.36. This brought the index lower by 18.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} compared to its record closing high of 4,796.56 from Jan. 3 – bringing the S&P 500 within striking distance of a bear market, defined once an index closes at least 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from a recent all-time closing high. On an intraday basis, the S&P 500 was down by as much as 20.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} compared to its Jan. 3 record closing high. The S&P 500 also posted a seventh consecutive weekly loss in its longest losing streak since 2001.
The other major indexes also ended little changed on Friday but lower for the week. The Dow Jones Industrial Average rose by just 0.03{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, or 8.77 points, to settle at 31,261.90 and log an eighth straight weekly loss. The Nasdaq Composite fell 0.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to close at 11,354.62. Treasury yields sank, with the yield on the benchmark 10-year note falling below 2.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, while U.S. crude oil prices edged up to more than $112 per barrel.
The latest bout of stock volatility came in the wake of weaker-than-expected earnings results and guidance from some of the major U.S. retailers earlier this week, which appeared to confirm fears that companies were having more difficulty passing on rising costs to consumers. Ross Stores (ROST) late Thursday became the latest major retailer to cut its full-year guidance, joining Walmart (WMT) and Target (TGT) in highlighting the impact inflation and supply chain disruptions have had on profitability. Walmart shares dropped 19.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} this week in the stock’s worst weekly performance on record.
“Unfortunately there’s no safe haven. When we see the news that came out of consumer discretionary and staples … that shows the struggles that companies have regardless of their size,” Eva Ados, ER Shares chief operating officer, told Yahoo Finance Live. “And ironically, these are the sectors, staples and consumer discretionary, that are viewed as safe havens in a bad economic market.”
Nearing a bear market
The S&P 500 has come close to settling 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} below its recent record high, which would represent the index’s first bear market since the early days of the COVID-19 pandemic in 2020.
The Nasdaq Composite had already fallen into a bear market earlier this year, as traders rotated away from growth stocks amid expectations for higher interest rates from the Federal Reserve, which would pressure high-flying tech stocks’ valuations. As of Friday’s close, the Nasdaq Composite had fallen nearly 30{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from its record high from Nov. 19, 2021. The Dow has fallen into a correction, or drop of at least 10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from a recent record high, but has not yet reached the threshold of a bear market.
Since World War II, there have been 12 formal bear markets for the S&P 500, and 17 including “near bear markets,” when the index fell more than 19{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, according to LPL Financial Chief Market Strategist Ryan Detrick. Of these, the average drop was about 29.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, and lasted an average of 11.4 months.
The S&P 500’s latest slide has come amid escalating concerns over decades-high rates of inflation, tighter monetary policy from the Federal Reserve, geopolitical turmoil in Ukraine, and renewed virus-related restrictions in China. And given this confluence of concerns, discussions about the probability of a recession in the U.S. have also increased. While it’s up to the National Bureau of Economic Research (NBER) to formally call a recession, one is usually considered after two consecutive quarters of negative GDP (gross domestic product) growth. The U.S. economy already contracted at a 1.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} annualized rate in the first three months of this year.
“Breaking down bear markets with recession and without recessions shows an interesting development. Should the economy be in a recession, the bear markets get worse, down 34.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on average and lasting nearly 15 months,” Detrick wrote in a note. “Should the economy avoid a recession, the bear market bottoms at 23.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and lasts just over seven months on average.”
Recession risks
While the S&P 500’s recent declines reflect souring investor sentiment given the uncertain economic backdrop, a slide into bear market does not guarantee a recession. The stock market’s worsening losses, however, have shown investors are increasingly expecting a downturn.
“Historically, the S&P 500 has fallen an average of 29{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} around recession (median of 24{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}),” Keith Lerner, co-chief investment officer and chief market strategist at Truist Advisory Services, wrote in a note early Friday. “With the S&P 500 currently showing a peak-to-trough decline of almost 19{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} [as of Thursday’s close], the market is effectively already pricing in a 60{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}-70{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} chance of recession based on the average and median.”
Strategists at other major firms have also underscored that the S&P 500 has been pricing in an increasing probability of a recession.
“A recession is not inevitable, but clients constantly ask what to expect from equities in the event of a recession,” David Kostin, Goldman Sachs chief U.S. equity strategist, wrote in a note this week. “Our economists estimate a 35{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} probability that the U.S. economy will enter a recession during the next two years and believe the yield curve is pricing a similar likelihood of a contraction. Rotations within the U.S. equity market indicate that investors are pricing elevated odds of a downturn compared with the strength of recent economic data.”
Lerner also noted that based on the average and median declines of the S&P 500 around recessions since World War II, the index could drop this time to as low as between 3,400 and 3,650.
“This would make an unbelievably brutal market feel that much worse, and, of course, markets could go beyond the average,” Lerner noted.
But once a bottom has been put in during a recession, returns tend to be marked. Lerner noted that the average one-year forward return for stocks off a low around a recession is 40{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.
“Said another way, even if stocks went down to 3,400, using the average rebound, stocks would be near 4,800,” Lerner said. “The other thing to remember is stocks tend to bottom several months before a recession is over and often when we hit peak pessimism. This happens when investors think to themselves, ‘I can’t think of one reason for the markets to go up.’ All the headlines are negative.”
NEW YORK, NEW YORK – MAY 06: Traders work on the floor of the New York Stock Exchange (NYSE) during morning trading on May 06, 2022 in New York City. Following a day that saw a drop of over 1000 points over inflation fears, the Dow Jones Industrial Average was down over 200 points in morning trading. (Photo by Spencer Platt/Getty Images)
BP PLC described its most effective quarter in a lot more than a ten years yesterday, as growing oil and gasoline costs assisted the British oil large shrug off a $20.4 billion compose-down of its Russian business.
The organization reported $6.2 billion in fundamental financial gain for the initial 3 months of the 12 months. Analysts had anticipated gains of $4.5 billion, according to CNBC.
BP’s earnings, the very first coming from a trio of European oil majors this 7 days, had been intently watched by analysts for a change in approach. The London-dependent organization declared in 2020 that it would bit by bit transition away from oil toward reduced-carbon organizations like electric powered auto charging, hydrogen and renewables. But with oil prices soaring and a expanding clamor for businesses to strengthen manufacturing, some had questioned if BP would transform training course and sanction a lot more drilling (Climatewire, May well 2).
On Tuesday, enterprise executives explained they prepared to continue to be the system.
“We’re going to go on to spend in the hydrocarbons the earth requires nowadays, and we’re heading to continue to progressively make investments in advancing the electricity changeover, which is also what the earth needs,” BP CEO Bernard Looney explained to fiscal analysts. “So no improve to our options, staying with the prepare that we have, willpower staying the significant purchase of the working day.”
BP’s earnings underscored a broader pattern in the oil field, with businesses prioritizing the overall health of their stability sheets around new drilling applications. BP stated it sanctioned $1.6 billion in share buybacks in the initially quarter and announced an added $2.5 billion in prepared buybacks. The British huge also paid out down $3.1 billion in debt through the initially quarter, bringing its internet personal debt down to $27.5 billion. Meanwhile, the firm explained it would shell out a dividend of $5.46 a share, up from $5.25 a share final calendar year.
The concentration on fiscal willpower was notably notable during a quarter when the global oil benchmark averaged $102 a barrel, amid increasing worries over supply disruptions from Russia, one particular of the world’s major oil exporters.
BP’s mixed oil and gasoline production declined 3 p.c in the very first quarter in comparison to the final a few months of 2021, and corporation executives stated they count on output to keep on being flat for the remainder of 2022.
The tactic was in particular evident at BPX Vitality, BP’s U.S. shale company. BPX ran nine drilling rigs throughout a few shale basins in the very first quarter of 2022, the identical quantity as in the initially a few months of 2021.
Murray Auchincloss, BP’s chief fiscal officer, said BPX’s spending plan for 2022 would increase to all-around $1.6 billion this 12 months, up from $1 billion final yr. But he cautioned any raise in production would be minimal.
“We consider we have to have to keep on to push charges and cash performance due to the fact only 15 months in the past the cost of oil was extremely, really lower. So we’re just going to go on to concentrate on that performance all over the enterprise,” Auchincloss reported.
Formally, BP will report a $20 billion loss for the quarter after the produce-down of its stake in Rosneft, the Russian oil enterprise. BP introduced it was withdrawing from Russia right after the Kremlin introduced an invasion of Ukraine. It owned a 19.75 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} share in Rosneft. Executives remained mum more than ideas to divest BP shares in the firm.
But the compose-down was mostly overshadowed by the toughness of BP’s organization outside Russia. The company’s refining and buying and selling section reported an primarily potent quarter. The $2 billion earnings recorded in the very first three months of the 12 months exceeded the $1.8 billion gain the section posted in all of 2021.
BP said it proceeds to broaden its low-carbon business enterprise with a $1 billion investment in EV charging in the United Kingdom, a eco-friendly hydrogen facility in the Netherlands and a new offshore wind lease in Scotland.
BP shares in New York were up 8 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to $31.18 in yesterday’s buying and selling.
U.S. stocks fell Thursday to cap another losing week on Wall Street as investors digested a flurry of bank earnings and reeled from more red-hot CPI numbers.
The S&P 500 and tech-heavy Nasdaq Composite each settled at four-week lows, recording declines of 1.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 2.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, respectively. The Dow Jones Industrial Average retreated from a slight advance earlier in the session to close 0.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} lower. Meanwhile, Treasury yields climbed higher, with the 10-year benchmark marking its biggest one-week jump to hit 2.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, the highest level since December 2018.
The majority of U.S. market indexes finished lower for the second straight week as war in Eastern Europe, inflationary pressures and anticipation for more combative measures by the Federal Reserve to tame rising price levels continued to weigh on sentiment.
“There’s a lot of fear and anticipation as we’re moving into this period of higher interest rates,” Portia Capital Management owner and president Michelle Connell told Yahoo Finance Live. “We’re just not quite sure how much the Fed’s going to dial those up. There’s a lot of uncertainty.”
Social media giant Twitter (TWTR) was again in focus on Thursday after Tesla CEO Elon Musk offered to buy the platform for $54.20 per share, or about $41 billion in cash. In a bid for the company outlined in a new SEC filing, Musk said Twitter must go private in order to make effective changes. Shares of Twitter were down 1.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to $45.18 a piece at Thursday’s close.
Investors digested quarterly results from banking heavyweights Wells Fargo (WFC), Goldman Sachs (GS), Morgan Stanley (MS), and Citigroup (C) that reflected a lackluster start to 2022, with profits mostly down across the board after a boom year for the industry last year when it benefited from record dealmaking activity and a financial boost from releasing reserves set aside for potential pandemic loan losses.
The initial batch of reports preface a milder quarter for earnings growth than previous periods. However, earnings are expected to be a bright spot for investors who much of this year so far have grappled with sharp market swings tied to worsening geopolitical risk, inflationary pressures and fears monetary tightening may prompt an economic contraction as the Federal Reserve sets out on its rate hiking plans.
Analysts have tempered their expectations on first quarter earnings, lowering bottom-up EPS forecasts in aggregate for Q1 by 0.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from $52.21 to $51.83, according to data from FactSet. On the other hand, EPS forecasts for the second quarter are up by 1.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from $55.16{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to $56.07, by 2.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from $57.82 to $59.23 for the third quarter, by 3.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from $58.31 to $60.59 for the fourth quarter and by 2.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from $223.43 to $227.80 for 2022 overall.
Economists at Bank of America in a note out this week also predicted a resilient earnings quarter despite grim macroeconomic headlines throughout the period.
“Leading signals and early reporters suggest a high likelihood of an EPS beat in Q1,” BofA said, adding the financial institution expects a 4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} beat, or $53.50 vs. consensus $51.54. However, the bank warned analyst expectations for record margins in the coming quarters were “too high.”
“History suggests that oil shocks spawn weaker consumption with a three-to-four quarter lag, indicating a 2H slowdown,” the note said.
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4:00 p.m. ET: Stocks extended losses to cap another week in the red
Here’s how the major indexes closed out the holiday-shortened week:
S&P 500 (^GSPC): -53.98 (-1.21{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,392.61
Dow (^DJI): -113.75 (-0.33{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,450.84
Nasdaq (^IXIC): -292.51 (-2.14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 13,351.08
Crude (CL=F): +$1.88 (+1.80{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $106.13 a barrel
Gold (GC=F): -$9.40 (-0.47{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,975.30 per ounce
10-year Treasury (^TNX): +14.1 bps to yield 2.8280{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
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11:30 a.m. ET: Consumers are slightly more optimistic in early April
U.S. consumer sentiment unexpectedly bounced back in early April from a decade low, lifted by a positive outlook for wage growth amid a strong labor market and a decline in gasoline prices curbing some inflation worries.
The University of Michigan’s Consumer Sentiment Index climbed to 65.7 on a preliminary basis this month from a final reading of 59.4 in March, the lowest since 2011. Economists surveyed by Bloomberg expected a reading of 59.
The improved outlook was boosted by a 29.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} jump in the economic view for the year ahead and a 17.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} increase in personal financial expectations, according to survey Director Richard Curtin.
“A strong labor market bolstered wage expectations among consumers under age 45 to 5.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} – the largest expected gain in more than three decades, since April 1990,” he noted in a statement.
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10:25 a.m. ET: Mortgage rates hit 5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to mark highest level in more than a decade
The rate on the 30-year fixed mortgage jumped to 5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from 4.72{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} last week, according to Freddie Mac. A year ago at this time, the 30-year borrowing cost averaged 3.04{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.
In the last five weeks alone, the rate has climbed 1.24 percentage points and is 1.89 points higher than at the end of 2021.
“This week, mortgage rates averaged five percent for the first time in over a decade,” said Sam Khater, Freddie Mac’s Chief Economist. “As Americans contend with historically high inflation, the combination of rising mortgage rates, elevated home prices and tight inventory are making the pursuit of homeownership the most expensive in a generation.”
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9:30 a.m. ET: Stocks flat as investors digest bank earnings
Here were the main moves at markets at the start of Thursday’s trading session:
S&P 500 (^GSPC): +4.82 (+0.11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,451.41
Dow (^DJI): +141.03 (+0.41{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,705.62
Nasdaq (^IXIC): -12.24 (-0.09{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 13,631.35
Crude (CL=F): -$1.53 (-1.47{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $102.72 a barrel
Gold (GC=F): -$4.20 (-0.21{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,980.50 per ounce
10-year Treasury (^TNX): +3.3 bps to yield 2.7200{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
American consumers continued spending in March even amid inflationary pressures that led to a surge in the costs of food, gasoline and other basics.
U.S. retail sales rose 0.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} after logging a revised 0.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} jump from January to February. Wage gains, solid hiring and more money in banking accounts have fueled spending.
January’s increase of 4.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} was the biggest jump in spending since March 2021 when American households received a final federal stimulus check of $1,400.
The Commerce Department reported general merchandise stores saw business up 5.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, while sales at clothing stores jumped 2.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. Online sales rose 6.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and restaurant sales climbed 1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.
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8:45 a.m. ET: Another 185,000 Americans filed new claims last week
Applications for unemployment insurance rose slightly more than expected in the latest weekly data but held near a 54-year low set earlier this month.
The Labor Department’s latest weekly jobless claims report showed 185,000 claims were filed in the week ended April 9, coming in just above the 170,000 economists surveyed by Bloomberg had expected.
The prior week’s new claims fell to the lowest level since 1968 at 167,000. That compares to the average of about 218,000 new claims filed per week throughout 2019 before the pandemic.
Given the surge and then decline in jobless claims, the Labor Department has also now reconfigured the way it adjusts the weekly data to account for seasonal factors. Starting last week, the Labor Department returned to using “multiplicative” seasonal adjustment factors for the data. For much of the pandemic, the department had been using “additive” seasonal adjustments that help smooth out large swings in the weekly numbers.
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8:15 a.m. ET: Citi profit drops 46{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} due to loan loss provisions and slower dealmaking
Citigroup (C) logged a 46{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} plunge in first-quarter profit as it took a hit on provisions for Russia-related losses, a slump in underwriting fees and higher expenses.
The banking powerhouse added $1.9 billion to its reserves in the quarter to prepare for losses from direct exposures to Russia and the economic impact of its war in Ukraine. Citi is the most global of the U.S. banks. The move pushed credit costs to $755 million, a contrast from the $2.1 billion benefit one year ago when it freed up loss reserves built up during the COVID-19 pandemic.
Citi reduced its exposure to Russia to $7.8 billion, from $9.8 billion in December, also lowering its worst-case-scenario loss estimate to no more than $3 billion, down from the nearly $5 billion estimated last month.
Meanwhile, net income fell to $4.30 billion, or $2.02 per share from $7.94 billion, or $3.62 per share, a year earlier.
Shares of Citigroup were up 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in pre-market trading.
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8:03 a.m. ET: Goldman Sachs reports 42{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} fall in first-quarter profit
Goldman Sachs (GS) saw first-quarter profit halve during the first quarter on a slowdown in capital markets activity from levels in the same period last year that weighed on the bank’s investment banking business.
Profit applicable to common shareholders fell to $3.83 billion, or $10.76 per share, in the quarter ended March 31, from $6.71 billion, or $18.60 per share, a year ago.
Total net revenue fell to $12.93 billion in the quarter, down nearly 27{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from last year.
“It was a turbulent quarter dominated by the devastating invasion of Ukraine,” CEO David Solomon said in a statement. “The rapidly evolving market environment had a significant effect on client activity as risk intermediation came to the fore and equity issuance came to a near standstill. Despite the environment, our results in the quarter show we continued to effectively support our clients.”
Goldman Sachs shares were up 1.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in pre-market trading.
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7:52 a.m. ET: Morgan Stanley first-quarter profit slumps 11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on lower trading revenues
Morgan Stanley (MS) reported an 11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} drop in its first-quarter profit following a slump in equity underwriting revenue from last year’s highs. The company, however, saw a jump in advisory revenues driven by higher levels of completed M&A transactions.
The mega bank recorded net revenues of $14.8 billion for the first quarter ended March 31, compared to $15.7 billion a year ago. Net income was $3.7 billion, or $2.02 per share, down from $4.1 billion, or $2.19 per diluted share the same period a year ago.
“The Firm delivered a strong ROTCE of 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in the face of market volatility and economic uncertainty, demonstrating the resilience of our global diversified business,” Morgan Stanley CEO James Gorman said in a statement.
“Institutional Securities navigated volatility on behalf of clients extraordinarily well, Wealth Management’s margin proved resilient and the business added $142 billion net new assets in the quarter, and Investment Management benefited from its diversification,” he said said.
Shares of Morgan Stanley were up 2.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in pre-market trading.
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7:30 a.m. ET: Wells Fargo shares drop after bank reports 21{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} quarterly drop in profit
Wells Fargo (WFC) reported a nearly 21{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} drop in first-quarter profit after rising inflation and interest rates, as well as geopolitical turmoil from Russia’s war in Ukraine put a dent in its core business during the period.
The fourth-largest U.S. lender posted a profit of $3.67 billion, or 88 cents per share, for the three months ended March 31, compared to $4.64 billion, or $1.02 per share, over the same quarter last year.
“Our internal indicators continue to point towards the strength of our customers’ financial position, but the Federal Reserve has made it clear that it will take actions necessary to reduce inflation and this will certainly reduce economic growth,” Chief Executive Charlie Scharf said.
“In addition, the war in Ukraine adds additional risk to the downside.”
Wells Fargo shares were down 3.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in pre-market trading as of 7:30 a.m. ET.
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7:17 a.m. ET: Stock futures little changed as major bank reports trickle in
Here’s where future markets were trading before Thursday’s opening bell:
S&P 500 futures (ES=F): -0.50 points (-0.01{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,441.75
Dow futures (YM=F): +68.00 points (+0.20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,550.00
Nasdaq futures (NQ=F): +2.75 points (+0.02{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,224.25
Crude (CL=F): -$1.20 (-1.15{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $103.05 a barrel
Gold (GC=F): -$6.90 (-0.35{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,977.80 per ounce
10-year Treasury (^TNX): +6.7 bps to yield 2.7800{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
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7:05 a.m. ET: Elon Musk offers to buy Twitter, discloses plans to take company private
Tesla (TSLA) CEO Elon Musk has offered to buy Twitter (TWTR) for $54.20 per share, or about $41 billion in cash, a new SEC filing on Thursday showed. Musk said the social media company he has often criticized must go private in order to make effective changes.
Musk’s offer price represents a 38{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} premium to Twitter’s April 1 close, the last trading day before the billionaire revealed he purchased a 9.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} stake in the company.
“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” Musk wrote in a letter to Twitter Chairman Bret Taylor, as disclosed in the filing. “However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.”
“My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder,” he added. “Twitter has extraordinary potential. I will unlock it.”
Twitter shares surged 13{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in pre-market trading.
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6:10 p.m. ET Wednesday: Futures open flat as Wall Street looks ahead to more bank earnings
Here were the main moves in markets heading into overnight futures trading Wednesday:
S&P 500 futures (ES=F): -4.00 points (-0.09{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,438.25
Dow futures (YM=F): -21.00 points (-0.06{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,461.00
Nasdaq futures (NQ=F): -7.50 points (-0.05{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,214.00
Crude (CL=F): -$0.23 (-0.22{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $104.02 a barrel
Gold (GC=F): -$3.90 (-0.20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,980.80 per ounce
10-year Treasury (^TNX): +6.7 bps to yield 2.7800{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
NEW YORK, NEW YORK – APRIL 12: American flags are seen waving on the New York Stock Exchange on April 12, 2022 in New York City. Data released this morning showed that inflation rose 8.5 percent in March, the highest annual increase since December 1981, amid energy prices soaring due to Russia’s war in Ukraine. (Photo by Michael M. Santiago/Getty Images)
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
Read the latest financial and business news from Yahoo Finance
Stock futures opened relatively flat on Wednesday evening, though sustaining gains posted by a three-day recovery rally that was led by cooled investor concerns around the Omicron variant.
Dow futures inched up 0.02{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, while contracts on the tech-focused Nasdaq Composite ticked up 0.10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. All major indexes closed up, with the S&P 500 gaining 14.46 points to close the session at 4,701.21, just 0.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} shy of the trading session on Nov. 24, a day before the latest COVID-19 variant was announced by the World Health Organization.
The moves were supported by eased virus fears after Pfizer Inc. and BioNTech reported that early lab studies show a third dose of their coronavirus vaccine mitigates the Omicron variant. The vaccine makers had indicated the initial two doses may not be enough to protect against infection from Omicron. Shares of Pfizer (PFE) traded 0.62{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} lower on Wednesday, closing at $51.40.
“We do think that there is fundamental support there for markets to continue to move higher here,” Emily Roland, co-chief investment strategist at John Hancock investment management, told Yahoo Finance Live on Tuesday. “Obviously we had a couple of things spook us over the last week or so, the emergence of the Omicron variant as well as this pivot from the Fed, potentially seeing them accelerating their tapering of asset purchases here. But the bottom line is that the economy is strong.”
With virus concerns diminishing, investors are pivoting their attention back to economic data, awaiting Consumer Price Index (CPI) figures on Friday to assess the extent inflationary pressures will persist.
“If the Omicron variant was to lead to a resurgence in goods spending at the expense of services or to further complicate supply disruptions, there could be a clear inflationary impact, too,” HSBC economist James Pomeroy wrote earlier this week in a research note to clients. “The inflation news in the past few weeks has been decidedly mixed — with upside surprises in both the U.S. and eurozone being offset by the possibility of some of the supply chain issues starting to alleviate, while energy prices have fallen sharply in recent days.
Separately, Apple shares rose 2.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} closing at $175.08 Wednesday — hitting a third-consecutive record high. The iPhone maker is on the cusp of becoming a $3 trillion company. The milestone would be reached at a time when the company is expected to foray into augmented and virtual reality with the launch of headsets in 2022.
6:57 p.m. ET Wednesday: Stock futures flat
Here were the main moves in markets in late trading on Wednesday:
S&P 500futures (ES=F): -1.75 points (-0.04{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,697.25
Dow futures (YM=F): + -8 points (-0.02{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 35,728
Nasdaq futures (NQ=F): -16.50 points (-0.10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 16,375.75
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
