STOCK MARKET NEWS: Stocks rise for a second day, Sam Bankman-Fried agrees to extradition

Micron GDDR6X graphics memory solution is pictured in this April 12, 2022 handout image. (Micron Technology/Handout via Reuters)

Chipmaker Micron Technology Inc on Wednesday said it will lay off 10% of its workforce next year as it continues to cope with a glut in the semiconductor market.

"Due to the significant supply demand mismatch entering calendar 2023, we expect that profitability will remain challenged throughout 2023," Micron chief executive Sanjay Mehrotra said.

Micron, reporting earnings on Wednesday, forecast second-quarter revenue of $3.8 billion, plus or minus $200 million, above Wall Street estimates. But it forecast a loss of 62 cents per share plus or minus 10 cents, much steeper than analysts' estimates for a 30 cents loss.

Micron said the layoffs, part of a restructuring plan, would result in charges of at least $30 million in the second quarter.

MARKETS

Discussions with lenders about potential purchase of some Cineworld theaters 'are not continuing,' AMC says

AMC Entertainment said in a filing discussions it had with Cineworld lenders about potentially buying some of the rival chain’s theaters "are not continuing."

Cinema chain AMC Entertainment Holdings said on Wednesday it was no longer in talks to acquire some theaters owned by now bankrupt Cineworld Group following initial discussions with some lenders.

AMC said the earlier talks were focused on the acquisition of certain theater assets of Cineworld in the United States and Europe, which would be financed partly through issuance of its preferred stock and debt financing provided by the lenders.

AMC in August announced its preferred share APE as a special dividend for shareholders and a means to raise capital in the future. The company listed these shares in New York under the ticker 'APE'.

During the discussions, AMC said Cineworld did not provide any confidential or non-public information, analyses, compilations, forecasts, among other documents to the lenders.

AMC added that a definitive deal had not been reached related to any proposal to the debtors in the Cineworld cases and there was no assurance that it would resume talks.

Cineworld did not immediately respond to a Reuters request for comment.

Stephanie Linnartz (Photo: Under Armour)

Under Armour Inc on Wednesday named Stephanie Linnartz as its chief executive officer, effective Feb. 27, to succeed Patrik Frisk who stepped down from his role in June.

Shares of the Baltimore-based company were up 1.4% in extended trade.

Linnartz currently serves as the president of Marriott International Inc and has been with the company for 25 years.

Under Armour's interim CEO Colin Browne will resume his responsibilities as chief operating officer.

U.S. stocks finished higher for a second day, on positive investment sentiment following earnings reports Tuesday from FedEx and Nike, along with the latest read on consumer confidence.

• The Dow Jones Industrial Average gained 1.6%.

• The S&P 500 added 1.49%.

• The Nasdaq Composite rose 1.54%.

Nike Inc shares rallied sharply after beating profit expectations for its second quarter on strong holiday demand from North American shoppers, while FedEx also gained and shares in cruise operator Carnival Corp jumped after disclosing that booking volumes during the fourth quarter of 2022 for 2023 sailings are nearing 2019 comparable booking levels, with November booking volumes exceeding 2019 levels.

U.S. consumer confidence rose to an eight-month high in December as inflation retreated and the labor market remained strong while 12-month inflation expectations fell to 6.7%, the lowest since September 2021.

"We're seeing a broad rally. It's been helped by upbeat corporate commentary and an improvement in consumer confidence," said Angelo Kourkafas, investment strategist at Edward Jones in St. Louis referring to Nike and FedEx.

Front Month Nymex Crude for February delivery gained $2.06 per barrel, or 2.70% to $78.29.

Reuters contributed to this report.

MARKETS

Oil and energy prices are moving in opposite directions, what’s going on?

Crude oil prices are moving in the opposite direction of energy stocks over the last three months amid unique economic pressures

There’s been a rare disconnect between the price of oil and the movement of energy stocks.

“The recent drop in prices seems to be based on a stronger U.S. Dollar, COVID-19 lockdowns in China, and fears of a recession dampening demand,” said Adam Kobeissi, founder of the financial newsletter, The Kobeissi Letter.

ECONOMY

FTX founder Sam Bankman-Fried agrees to be extradited to US, where he faces criminal charges

A judge in the Bahamas has approved a request from Sam Bankman-Fried, the founder of the now-collapsed cryptocurrency exchange FTX, to be extradited to the U.S. to face charges.

Sam Bankman-Fried will be heading to the U.S. to face federal charges.

The founder of FTX agreed to extradition from the Bahamas in part due to his desire to “make the relevant customers whole," his lawyer stated.

Bankman-Fried is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the Federal Election Commission and commit campaign finance violations, the Justice Department says.

MARKETS

Nike's second quarter earnings show revenue growth amid uncertainty for retailers

The athletic retailer Nike saw its revenue increase and beat prior expectations, according to the company's earnings report for the second quarter.

Nike shares are 12% higher in premarket trading after the company beat Wall Street estimates for quarterly revenue on Tuesday, helped by persistent demand for its sneakers and sportswear in North America and Europe.

Nike reported a 30% jump in its largest market, North America, helping offset a sales slump in China after COVID-related restrictions in the country impacted sales in the region.

The world's largest sportswear maker said revenue rose to $13.32 billion for the second quarter from $11.36 billion a year earlier. Analysts had expected $12.57 billion, according to IBES data from Refinitiv.

Nike posted a profit of 85 cents per share in the second quarter ended November, topping an average estimate of 64 cents, according to Refinitiv data.

ECONOMY

Existing home sales tumble 7.7% in November, 10th straight month of declines

Sales of previously owned houses fell in November for the tenth consecutive month as rising interest rates pushed potential homebuyers out of the market.

Sales of previously occupied U.S. homes slowed for the tenth consecutive in November, constrained by a tight inventory of properties on the market and mortgage rates averaging more than double what they were a year ago.

Existing home sales fell 7.7% last month from October to a seasonally adjusted annual rate of 4.09 million, the National Association of Realtors said Wednesday. That’s lower than what economists had expected, according to FactSet.

Sales plunged 35.4% from November last year. Excluding the steep slowdown in sales that occurred in May 2020 at the start of the pandemic, sales are now at the slowest annual pace since October 2010, when the housing market was mired in a deep slump following the foreclosure crisis of the late 2000s.

Flu vaccine is readied at the L.A. Care and Blue Shield of California Promise Health Plans' Community Resource Center, Oct. 28, 2022, in Lynwood, Calif. (AP Photo/Mark J. Terrill)

The United States has released doses of the antiviral flu drug Tamiflu through a national stockpile for the flu season amid surging demand, the health department said on Wednesday.

The country is seeing a spread in influenza and respiratory syncytial virus (RSV) as temperatures fall, presenting a triple epidemic threat along with COVID-19 during the year-end holiday period.

Hospitalizations caused by the influenza virus hit a decade high earlier this month, according to federal data.

The additional supply of Tamiflu would be made available to jurisdictions, including through the Strategic National Stockpile, which is the country's largest store of medical supplies for use in a crisis.

People carrying shopping bags walk inside the King of Prussia shopping mall in Pa., Nov. 26, 2021. (Reuters/Rachel Wisniewski)

The Conference Board Consumer Confidence Index increased in December following back-to-back monthly declines.

The Index now stands at 108.3 (1985=100), up sharply from 101.4 in November.

The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—increased to 147.2 from 138.3 last month.

The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—improved to 82.4 from 76.7. However, Expectations are still lingering around 80—a level associated with recession.

“The Present Situation and Expectations Indexes improved due to consumers’ more favorable view regarding the economy and jobs,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.

Toro opened lower in Wednesday trading. Revenue rose 22% to $1.17 billion from a year ago; analysts expected $1.18 billion.

Net earnings jumped 96% to $117.6 million.

Adjusted earnings were $1.11​​ per share for the quarter ended in October. The mean expectation of four analysts for the quarter was for earnings of $1.09 per share.

For fiscal 2023, management expects net sales growth in the range of 7% to 10% and adjusted diluted EPS in the range of $4.70 to $4.90. The estimated adjusted diluted EPS range excludes the tax benefits recorded as excess tax deductions for stock compensation.

Reuters contributed to this report.

Panoramic view of Carnival Costa Fortuna at Nagasaki Port (Photo: Carnival Corp)

Carnival Corp says booking volumes during the fourth quarter of 2022 for 2023 sailings are nearing 2019 comparable booking levels, with November booking volumes exceeding 2019 levels. 

Marking an early start to wave season (peak booking period), the company ended the year with multiple brands breaking records on very strong Black Friday and Cyber Monday booking volumes.

The cruise line operator missed market estimates for quarterly revenue on Wednesday as inflation-hit consumers turn cautious about discretionary spending such as cruise travel.

The cruise operator's revenue rose to $3.84 billion in the quarter ending Nov. 30 from $1.29 billion a year earlier, but missed analysts' average estimate of $3.91 billion, according to IBES data from Refinitiv.

The company's net loss, however, narrowed to about $1.60 billion, or $1.27 per share, in the fourth quarter, from $2.62 billion, or $2.31 per share, a year earlier.

Reuters contributed to this report.

People visit Nike store in New York City, Dec. 9, 2022. (Reuters/Eduardo Munoz)

U.S. stocks are extending gains on earnings reports from Nike and FedEx. Equities snapped a four-day losing streak Tuesday.

"Most people think we are heading toward a recession, but when earnings like Nike and FedEx are strong, then all of a sudden that could pave the way for higher (stock) prices next year," said Adam Sarhan, chief executive at 50 Park Investments, New York.

"The underlying conditions remain very weak and it appears that this could be just a little seasonal bounce until the end of the year."

Nike topped Wall Street estimates. “The best quarterly revenue growth in a decade is testament to the brand’s inherent strengths. It may have had to ease up on pricing to clear some excess inventory but Nike’s ability to appeal across class and age demographics means wealthier clientele, less impacted by the cost-of-living crisis, have also helped to drive sales,” said AJ Bell investment director Russ Mould.

FedEx identified an incremental $1 billion in cost savings beyond its September forecast, and now expects to generate total fiscal 2023 cost savings of approximately $3.7 billion relative to its initial fiscal 2023 business plan.

Stocks in Asia had a mixed day ahead of the U.S. open, while Europe indices are overwhelmingly positive.

“A calmer close to Wall Street last night had the soothing effect of stabilising markets across Europe following recent weakness, with all the major indices managing to sneak ahead on Wednesday,” Bell said.

Oil is higher.

Reuters contributed to this report.

Rite Aid store (Photo: Rite Aid)

Rite Aid is higher in premarket trading.

The drugstore chain topped Wall Street revenue estimates.

Third quarter revenue fell to $6.08 billion from $6,23 bill. The estimate was $5.94 billion.

Retail comparable same store prescriptions increased 4.4%. Same store front-end sales, excluding tobacco, increased 2.7%.

The net loss for the thirteen weeks ended Nov. 26 was $67.14 million, up from $36.06 million a year ago.

The company also narrowed its outlook for fiscal 2023. Total revenues are expected to be between $23.7 billion and $24.0 billion, down from $23.6 billion and $24.0 billion.

The net loss is expected to be between $584 million and $551 million compared to the previous forecast of $520.3 million and $477.3 million.

New York Stock Exchange

U.S. stock futures continue to rally on Wednesday as tech shares find breathing room ahead of the holiday and retail skyrockets.

The Dow Jones Industrial Average futures is up roughly 294 points, or 0.89%, while the S&P and Nasdaq futures are approximately 0.68% and 0.47% higher, respectively.

Over the last five days, the Dow remains down near 2.77%, the S&P is off nearly 4.02% and the tech-heavy Nasdaq is roughly 5.51% lower.

Pre-market, shares of Nike exploded around 11.51%, Macy’s jumped roughly 1.44%, Home Depot moved up approximately 1.32%, as Bed Bath & Beyond shot up nearly 1.48%.

Shares of Meta leapt approximately 0.64% pre-market, Apple jumped 0.66%, while Microsoft went up roughly 0.41% and IBM went up around 0.74%.  

In commodities, West Texas Intermediate crude futures spiked 2.31% to $77.85 a barrel, as gold popped 0.90% to $1,826.30 an ounce.

Stock traders (Reuters)

U.S. equity futures were trading higher and heading for a second day of gains.

The major futures indexes are suggesting a gain of 0.6% when the opening bell rings on Wall Street.

Oil prices were little changed on Wednesday on concerns about what the weekly inventory report will show.

A larger-than-expected draw in U.S. crude stocks offset worries about rising COVID-19 cases in China.

U.S. West Texas Intermediate (WTI) crude futures traded around $77.00.

Brent crude futures traded around $80.00 per barrel.

Wednesday morning brings another piece of data on the housing industry.

The National Association of Realtors is expected to release existing home sales for November.

Sales of previously owned homes are expected to fall 5.4% to a seasonally adjusted annual rate of 4.43 million units. 

The Conference Board will release its consumer confidence index for December. It’s expected to rise almost a point to 101.0, after falling two months in a row on gasoline prices. 

The DOE’s Energy Information Administration will release its inventory report for last week. Crude stockpiles are expected to fall by nearly 2 million barrels following a massive, surprise build of more than 10 million barrels the previous week. 

The yield on the 10-year Treasury was at 3.69% on Wednesday.

In Asia, Tokyo’s benchmark Nikkei 225 index was down 0.7%, Hong Kong's Hang Seng inched up 0.3% and the Shanghai Composite index slipped 0.2%.

On Tuesday, the S&P 500 rose 0.1%, to close at 3,821.62.

The Dow Jones Industrial Average rose 0.3% to 32,849.74 and the Nasdaq composite barely budged after closing less than 0.1% higher, at 10,547.11.

The founder and former CEO of cryptocurrency exchange FTX (Reuters)

The founder and former CEO of FTX will have a hearing Wednesday in a Bahamian court on his possible extradition U.S. 

Sam Bankman-Fried faces criminal charges related to the collapse of the cryptocurrency exchange, a source familiar with the matter told The Associated Press.

The source spoke on condition of anonymity because they were not authorized to speak on the record. 

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

For the week, Bitcoin was nearly 5% lower.

For the month, the cryptocurrency was down a little over 1%, while down more than 63% year-to-date.

Ethereum was trading around $1,200, after giving up more than 7% for the week.

Dogecoin was trading at 7 cents, after losing more than 17% in the past week.

A home sits for sale in Geneva, Illinois. (Reuters)

Wednesday morning brings another piece of data on the housing industry.

The National Association of Realtors is expected to release existing home sales for November.

Sales of previously owned homes are expected to fall 5.4% to a seasonally adjusted annual rate of 4.43 million units. That would be the tenth straight monthly drop, the most on record.

The report follows other data this week showing a housing market under great pressure from high mortgage rates, inflation, and high home prices.

The Conference Board will release its consumer confidence index for December. It’s expected to rise almost a point to 101.0, after falling two months in a row on gasoline prices. 

Confidence is down sharply from a post-pandemic high of 128.9 in June of last year on inflation worries.

The DOE’s Energy Information Administration will release its inventory report for last week. Crude stockpiles are expected to fall by nearly 2 million barrels following a massive, surprise build of more than 10 million barrels the previous week. 

Watch for builds of a little more than 300,000 barrels in distillate supplies (heating oil, diesel fuel) and more than 2 million barrels in gasoline inventories. 

Illustration of tax forms and checks. (FBN)

As 2022 draws to a close, tax filing season is just around the corner, but it's never too early to start planning ahead for the changes coming to tax policies in 2023 and how those will impact your finances.

While the changes won't affect the 2022 taxes due on April 18th, several are important for taxpayers to be aware of as they budget for 2023 and plan retirement contributions.

Mark Steber, the Chief Tax Information Officer for Jackson Hewitt Tax Services, told Fox Business that "tax law changes can be made any time during the year; and we've seen in recent years that they can even be retroactive.

That's why it's important to pay attention year-round as your personal income tax situation might be impacted due to national or state laws, or at least speak with a tax pro who understands the changes.

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Elon Musk (Getty Images)

Billionaire Elon Musk shared his thoughts Tuesday night on the $1.7 trillion omnibus spending bill presented by Congress.

The Twitter chief put up a poll up on the social media site asking people if the bill should be approved and offered his own thoughts on it.

The poll asked: "Should Congress approve the $1.7 trillion omnibus spending bill?" As of early Wednesday morning, more than 1.6 million Twitter users voted and 75.4% said "no," while 24.6% said "yes."

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A FedEx Express courier inside the delivery truck. (Getty Images)

FedEx shares were 4% higher in premarket trading after the package delivery company said it identified an incremental $1 billion in cost savings beyond its September forecast.

The company now expects to generate total fiscal 2023 cost savings of approximately $3.7 billion relative to its initial fiscal 2023 business plan.

FedEx said prioritizing actions quickly reduce costs in order to align fiscal 2023 costs with weaker-than-expected volume.

The company also said it is unable to provide a fiscal 2023 earnings per share or effective tax rate (ETR) outlook on a GAAP basis due to fiscal 2023 mark-to-market (MTM) retirement plans accounting adjustments.

Fiscal second quarter revenue fell to $22.8 billion from $23.5 billion. Analysts were expecting $23.74 billion.

FedEx said adjusted profit fell to $815 million, or $3.18 per share, from $1.3 billion, or $4.83 per share, for the fiscal second quarter 

Per-share earnings beat analysts' estimates by 36 cents, according to Refinitiv I/B/E/S Estimates

Gas Prices (AAA)

The nationwide price for a gallon of gasoline slipped Wednesday to $3.108, according to AAA.

The average price of a gallon of gasoline on Tuesday was $3.123.

A year ago, the price for a gallon of regular gasoline was $3.302.

One week ago, a gallon of gasoline cost $3.214. A month ago, that same gallon of gasoline cost $3.662.

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

Diesel has slipped below $5.00 per gallon to $4.727, but that is still a far cry from the $3.584 of a year ago.

Oil rigs pumping (Reuters)

Oil prices were little changed on Wednesday on concerns about the weekly inventory report will show.

A larger-than-expected draw in U.S. crude stocks offset worries about rising COVID-19 cases in China.

U.S. West Texas Intermediate (WTI) crude futures traded around $76.00.

Brent crude futures traded around $79.00 per barrel.

U.S. crude inventories fell by about 3.1 million barrels in the past week, according to market sources citing data from the American Petroleum Institute and reported by Reuters.

Reuters had estimated a 1.7 million barrel drop.

Gasoline inventories rose by about 4.5 million barrels, while distillate stocks rose by 828,000 barrels, according to the sources, who spoke on condition of anonymity.