STOCK MARKET NEWS: S&P snaps losing streak, FTC sues Microsoft-Activision, Costco earnings

Sign to the campus offices of chip maker Broadcom Ltd in Irvine, Calif., Nov. 6, 2017. (Reuters/Mike Blake)

Broadcom Inc forecast current-quarter revenue above Wall Street estimates on Thursday, signaling strong demand for chips used in data centers and networking equipment.

Companies are increasingly investing in the infrastructure needed to support a switch to hybrid work models, giving Broadcom - which makes chips for data centers, routers and Wi-Fi modems - an edge over competitors with more exposure to smartphones and PCs.

Broadcom, which counts iPhone maker Apple Inc as a major customer, stands to gain from the global roll-out of 5G that will boost demand for higher-priced chips used in smart phones.

The company forecast first-quarter revenue of about $8.9 billion, compared with analysts' estimates of $8.78 billion, according to Refinitiv data.

Revenue rose 21% to $8.93 billion in the fourth quarter ended Oct. 30. Analysts on average had expected revenue of $8.90 billion.

Costco Wholesale retail club in Austin, Tex., Dec. 12, 2016. (Reuters/Mohammad Khursheed)

Costco Wholesale Corp. (COST) on Thursday reported fiscal first-quarter profit of $1.36 billion.

On a per-share basis, the Issaquah, Washington-based company said it had net income of $3.07. Earnings, adjusted for non-recurring costs, came to $3.10 per share.

The results fell short of Wall Street expectations. The average estimate of 13 analysts surveyed by Zacks Investment Research was for earnings of $3.14 per share.

The warehouse club operator posted revenue of $54.44 billion in the period, which also did not meet Street forecasts. Ten analysts surveyed by Zacks expected $54.67 billion.

MARKETS

Ad-supported Disney+ subscription option rolls out in US

The Walt Disney Company on Thursday announced that the new ad-supported subscription option in the U.S. for its Disney+ streaming platform has now rolled out.

The Walt Disney Company has launched its Disney+ ad-supported subscription offering in the U.S.

More than 100 advertisers are on board for the service that costs $7.99 per month. Bundling with Hulu costs $9.99. Disney+, Hulu and ESPN+ costs $12.99.

DocuSign Inc. on Thursday reported a loss of $29.9 million in its fiscal third quarter.

The San Francisco-based company said it had a loss of 15 cents per share. Earnings, adjusted for one-time gains and costs, were 57 cents per share.

The results beat Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of 41 cents per share.

The provider of electronic signature technology posted revenue of $645.5 million in the period, also topping Street forecasts. Seven analysts surveyed by Zacks expected $626.1 million.

For the current quarter ending in January, DocuSign said it expects revenue in the range of $637 million to $641 million.The company expects full-year revenue in the range of $2.49 billion to $2.5 billion.

Lululemon sign at a shopping mall in San Diego, Calif., Nov., 23, 2022. (Reuters/Mike Blake)

Lululemon Athletica Inc. (LULU) on Thursday reported fiscal third-quarter earnings of $255.5 million.

On a per-share basis, the Vancouver, British Columbia-based company said it had profit of $2.

The results exceeded Wall Street expectations. The average estimate of 15 analysts surveyed by Zacks Investment Research was for earnings of $1.96 per share.

The athletic apparel maker posted revenue of $1.86 billion in the period, also beating Street forecasts. Thirteen analysts surveyed by Zacks expected $1.81 billion.

For the current quarter ending in January, Lululemon said it expects revenue in the range of $2.61 billion to $2.66 billion. Analysts surveyed by Zacks had expected revenue of $1.73 billion.

The company expects full-year earnings in the range of $9.87 to $9.97 per share, with revenue ranging from $7.94 billion to $7.99 billion.

Chewy is higher in extended trading. The online pet supplies store topped Wall Street revenue estimates.

Fiscal third quarter net sales rose 14.5% to $2.53 billion. Analysts expected $2.45 billion.

Net income was $2.3 million, including share-based compensation expense of $46.1 million. Analysts on average expected a loss of almost $35 million.

“Chewy’s third quarter results showed accelerating double-digit topline growth, sustained gross margin expansion, and solid free cash flow generation. The fact that we are simultaneously driving top line growth and expanding margins is yet another proof point of our ability to get big fast and get fit fast, regardless of the macro environment,” said Sumit Singh, Chief Executive Officer of Chewy.

Microsoft logo is seen on a smartphone placed on displayed Activision Blizzard logo in this illustration, Jan. 18, 2022. (Reuters/Dado Ruvic/Illustration)

Microsoft says it has “complete confidence” in its case for buying video game publisher Activision Blizzard and looks forward to presenting its case.The Federal Trade Commission sued to stop Microsoft from acquiring Activision in a $68.7 billion deal, The Washington Post reported.

The federal watchdog is reportedly worried about competition in the gaming market.

“We continue to believe that this deal will expand competition and create more opportunities for gamers and game developers,” said vice chair and president Brad Smith in a statement obtained by FOX Business' Susan Li.

Microsoft agreed to acquire Activision Blizzard for $95.00 per share, in an all-cash transaction, inclusive of Activision Blizzard’s net cash.

When the transaction closes, Microsoft will become the world’s third-largest gaming company by revenue, behind Tencent and Sony.

The planned acquisition includes iconic franchises from the Activision, Blizzard and King studios like “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty” and “Candy Crush,” in addition to global eSports activities through Major League Gaming. The company has studios around the world with nearly 10,000 employees.

LIFESTYLE

Blue Apron laying off 10% of corporate workforce

Meal kit company Blue Apron announced Thursday that it was reducing its workforce in an effort to reduce expenses and streamline operations amid the uncertain economic environment.

Blue Apron is cutting 10% of its total corporate workforce. As a result of these actions, the company expects to incur approximately $1.2 million in employee-related expenses, primarily consisting of severance payments, substantially all of which will result in cash expenditures, the meal kit provider said.

The company expects to recognize such expenses in the fourth quarter of 2022.

Blue Apron plans to further reduce expenses and has identified expense reductions of up to approximately $50.0 million in 2023, as compared to 2022, including the headcount changes identified above. These savings are planned to be implemented throughout the coming year.

Including the expense reduction plans outlined above, Blue Apron is working to strengthen its balance sheet to maintain compliance with its $25.0 million minimum liquidity covenant.

Syringe is filled with a dose of Pfizer's coronavirus disease (COVID-19) vaccine at a pop-up community vaccination center at the Gateway World Christian Center in Valley Stream, N.Y., Feb. 23, 2021. (Reuters/Brendan McDermid)

The U.S. health regulator has authorized COVID-19 shots from Moderna and Pfizer and its partner BioNTech that target both the original coronavirus and Omicron sub-variants for use in children as young as 6 months of age.

The amended authorization on Thursday from the Food and Drug Administration allows use of Moderna's bivalent shot as a booster in children 6 months through 5 years of age, two months after their initial vaccination.

Pfizer/BioNTech's updated shot can now be given as a third dose to those aged 6 months through 4 years, who have not completed their primary vaccination series or are yet to receive the third dose.

Children who have completed their initial three-dose vaccination with Pfizer's original shot are not yet eligible to receive the bivalent booster, the agency said.

The regulator added that data supporting use of Pfizer/BioNTech's bivalent shot as a booster in this age group is expected in January.

Shots for youngest children in the United States were only approved in June this year, making them the last group to become eligible for vaccination.

Ciena Corp. on Thursday reported fiscal fourth-quarter profit of $57.6 million.

On a per-share basis, the Hanover, Maryland-based company said it had net income of 39 cents. Earnings, adjusted for one-time gains and costs, came to 61 cents per share.

The results beat Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of 8 cents per share.

The developer of high-speed networking technology posted revenue of $971 million in the period, also surpassing Street forecasts. Six analysts surveyed by Zacks expected $851.5 million.

For the year, the company reported profit of $152.9 million, or $1 per share. Revenue was reported as $3.63 billion.

Home for sale sign in Cherry Hill, N.J., Oct. 29, 2020

REAL-ESTATE

Mortgage rates decrease for a fourth week

The average long-term U.S. mortgage rate fell for the fourth week in a row and has fallen more than three-quarters of a point since hitting a 20-year high last month, according to mortgage packager Freddie Mac.

The average long-term U.S. mortgage rate fell for the fourth consecutive week and have dropped more than three-quarters of a point since hitting a 20-year high last month.

Mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate dipped to 6.33% from 6.49% last week. A year ago the average rate was 3.1%.

The average long-term rate sat at 7.08% in early November, but has since had the steepest 4-week decline since 2008.

Cano Health in lower in Thursday trading. Investor Third Point reportedly sold its remaining shares in the primary care medical provider, Bloomberg reported.

The hedge fund had a 3.5% stake in October, the report said.

People with knowledge of the situation told Bloomberg that Daniel Loeb’s firm was increasingly concerned about liquidity.

Cano Health reported a third quarter net loss of $112 million, unfavorably impacted by a $65.7 million fair value adjustment of warrant liabilities.

Revenue rose 33% to $665 million.

Chao Xing tanker at the crude oil terminal Kozmino on the shore of Nakhodka Bay near the port city of Nakhodka, Russia, Aug. 12, 2022. (Reuters/Tatiana Meel)

ENERGY

US national gas prices now lower than they were a year ago, AAA says

The national average cost of a gallon of regular gas, which is $3.33 a gallon Thursday, is now lower than what Americans were paying last year, AAA says.

Oil rebounded on Thursday after four sessions of decline, boosted by hopes that easing anti-COVID measures in China will revive demand and by signs that some tankers carrying Russian oil have been delayed after a G7 price cap came into effect.

China on Wednesday announced the most sweeping changes to its resolute anti-COVID regime since the pandemic began, while at least 20 oil tankers faced delays in crossing to the Mediterranean from Russia's Black Sea ports.

Brent crude rose 69 cents, or 0.9%, to $77.86 a barrel by 1445 GMT, while U.S. West Texas Intermediate (WTI) crude gained $1.42, or 2%, to $73.43.

MARKETS

ExxonMobil expands share buyback to as much as $50B

ExxonMobil announces in corporate plan that will increase its share repurchase program to $50 billion while growing initiatives in lower-emission investments

Exxon Mobil Corp on Thursday said it will lift spending next year to $23 billion-$25 billion, the top end of its guidance, and expand investments to curb carbon emissions.

Exxon led record profits among oil majors in the second and third quarters this year, aided by its highly criticized decision during the COVID-19 pandemic to double down on fossil fuels as European competitors shifted to renewables.

The strategy boosted its shares by more than 60% this year — far ahead of rivals Shell PLC and BP PLC — as oil prices rose to their highest levels since 2008 after Russia's invasion of Ukraine.

FTX customers, already burned by the bankruptcy, could be facing an even bigger headache: the IRS.

MONEY

For FTX customers, IRS Ponzi rules loom large

Tax expert says FTX customers should get guidance from the IRS in 2023 on how to report losses from Sam Banman-Fried's bankrupt cryptocurrency exchange to avoid amending tax returns.

U.S. stock futures are rebounding on Thursday as oil and gold hover between small gains and losses.

Dow Jones Industrial Average futures are up roughly 54 points, or 0.16%, while S&P and Nasdaq Composite futures are both up around 0.23%.

Over the last five days, the Dow is 2.14% in the red, the S&P is down 3.24%, while the tech-heavy Nasdaq is 4.19% lower.

The U.S. Tech 100 remains down on Thursday at 0.45% in negative territory and is now 4.52% lower over the last five days as tech stocks begin to mix.  

Shares of Meta are down 0.17%, Apple is down 1.38%, while Microsoft and Alphabet are off 0.31% and 2.10%, respectively.

In other tech stocks, shares of Nvidia are up 0.83% and Amazon are 0.24% higher.

Meanwhile, West Texas Intermediate crude futures are up approximately 2.21% to $73.60 a barrel, as gold holds onto roughly a 0.04% gain at $1,798.80 an ounce.

U.S. crude and gold are off the last five days with oil skidding 9.53% and gold losing 1.02%.

Stock traders (Reuters)

U.S. equity futures traded cautiously Thursday morning, the day after stocks fell for a fifth day.

Oil prices were rebounding Thursday amid optimism over China's easing of anti-COVID measures.

West Texas Intermediate (WTI) crude futures traded around $72.00 per barrel.

Brent crude futures traded around $77.00 per barrel.

Gasoline prices slipped Thursday morning to below where they were a year ago.

The nationwide price for a gallon of gasoline slipped Thursday to $3.329, according to AAA.

A year ago, the price for a gallon of regular gasoline was $3.343.

On today's economic docket is the latest report on jobless claims.

On Friday, traders will be able to study the latest inflation report when the government releases producer prices for November.

In Asia, Tokyo's Nikkei 225 declined 0.4%, Hong Kong's Hang Seng gained 3.4% and China's Shanghai Composite lost 0.1%.

Wall Street ended a wobbly day of trading with more losses Wednesday, with the S&P 500 down 0.2% in its fifth straight loss. The Nasdaq composite, which is heavily weighted with tech stocks, fell 0.5% and the Dow industrials were flat.

Gas prices (AAA)

It has been a long strange trip involving pain at the pump.

The nationwide price for a gallon of gasoline slipped Thursday to $3.329, according to AAA.

That is below where the price was 12 months ago.

A year ago, the price for a gallon of regular gasoline was $3.343.

Diesel has declined to $5.00 per gallon, but that is still a far cry from the $3.612 of a year ago.

Everyone remembers when gas hit an all-time high of $5.016 on June 14.

The average price of a gallon of gasoline on Wednesday was $3.355.  

One week ago, a gallon of gasoline cost $3.470. A month ago, that same gallon of gasoline cost $3.804.

Oil rig at sunrise (AP)

Oil prices were rebounding Thursday amid optimism over China's easing of anti-COVID measures.

Oil is gaining after slumping to the lowest levels so far this year in the previous session.

West Texas Intermediate (WTI) crude futures traded around $72.00 per barrel.

Brent crude futures traded around $77.00 per barrel.

China on Wednesday announced a loosening of COVID rules that curbed the spread of the virus but sparked protests and hobbled the world's second-largest economy.

Brent settled on Wednesday below the year's previous closing low touched on the first day of 2022, while U.S. West Texas Intermediate crude fell to its lowest for the year.

Concerns of economic slowdowns weakening fuel demand continued to cap gains.

While U.S. crude stocks fell last week, gasoline and distillate inventories surged, adding to concerns about easing demand.

Bitcoin was trading around $16,000, after trading lower in three of the last five days.

For the week, Bitcoin has lost 2%.

For the month, the cryptocurrency is down a little more than 1%, but down more than 63% year-yo-date.

Ethereum was trading around $1,200, after losing more than 4% in the past week.

Dogecoin was trading at 9 cents, after losing more than 11% in the past week.