STOCK MARKET NEWS: Tik Tok CEO testifies, new home sales up, mortgage rates down, Accenture layoffs
Stocks close higher, Tik Tok CEO grilled on Capitol Hill, new home sales gain, mortgage rates drop for a second week, Accenture cuts. FOX Business is providing real-time updates on the markets, commodities and all the most active stocks on the move.
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Hyundai and Kia are recalling just over 570,000 U.S. vehicles over fire risks and urged owners to park outside and away until getting repairs.
The automakers said some vehicles with a tow hitch harness could catch fire due to a short circuit. The models covered are 2022-2023 model year Hyundai Santa Cruz, 2019-2023 Santa Fe, 2021-2023 Santa Fe Hybrid, 2022-2023 Santa Fe Plug-in Hybrid, and 2022-2023 Kia Carnival.
Hyundai is recalling nearly 568,000 vehicles and Kia 3,500 in the United States.
Hyundai said it is aware of six potential incidents related to the recall, including one fire. There are no confirmed crashes or injuries related to the recall issue. Kia said it has no reports of fires.
Oxford Industries exceeded analyst expectations.
Fourth quarter net sales increased 28% to $382 million; analysts expected 378.701 million.
Net earnings were $32 million, up from $25.4 million a year ago.
Earnings per diluted share were $2.28, topping the estimate of $2.14.
The owner of Tommy Bahama, Lilly Pulitzer and Johnny Was expects net sales in a range of $1.62 billion to $1.66 billion as compared to net sales of $1.41 billion in fiscal 2022.In fiscal 2023, GAAP earnings per share (EPS) is expected to be between $10.86 and $11.26 compared to fiscal 2022 GAAP EPS of $10.19.
Adjusted EPS is expected to be between $11.50 and $11.90, compared to fiscal 2022 adjusted EPS of $10.88.
Sales of new U.S. single-family homes increased to a six-month high in February, the latest indication that the housing market could be close to finding a floor after being hammered by higher mortgage rates.
New home sales rose 1.1% to a seasonally adjusted annual rate of 640,000 units last month, the highest level since August, the Commerce Department said on Thursday. January's sales pace was revised lower to 622,000 units from the previously reported 670,000.
New home sales are counted at the signing of a contract, making them a leading indicator of the housing market. They have now increased for three straight months.
Economists polled by Reuters had forecast new home sales, which account for a small share of U.S. home sales, falling to a rate of 650,000 units. The surprise increase came despite mortgage rates rising from early February through early March after mostly dropping since November, according to data from mortgage finance agency Freddie Mac.
Monthly sales rose in the South and West. They fell in the Midwest and plunged 40.0% in the Northeast. Sales were down 19.0% on a year-on-year basis in February.
All three of the major U.S. benchmark averages notched gains on Thursday, led by the Nasdaq Composite, in a see-saw session as investors mull the banking crisis against the Federal Reserve’s latest rate hike. Technology shares led the gains, while energy was the worst performer.
In commodities, oil slipped over 1% to $69.96 per barrel, while gold hit the highest level since March of 2022 $1,993.80 per ounce.
Banks stocks rebounded including Wells Fargo, JPMorgan Chase and Bank of America despite the uncertainty dogging the industry and the warning from policymakers that lending standards could tighten after the collapse of Silicon Valley Bank.
Sanofi's asthma drug Dupixent met all targets in a trial to treat "smoker's lung", potentially adding billions to the French drugmaker's growth prospects, but also underscoring a heavy reliance on its bestseller.
In a late stage trial Dupixent, jointly developed with Regeneron, led to a 30% reduction in moderate or severe acute exacerbations of chronic obstructive pulmonary disease (COPD), a potentially deadly disease marked by progressive lung function decline.
A Phase III trial involving 939 current or former smokers also showed improvements in lung function, quality of life and respiratory symptoms.
"COPD is an urgent global health concern and a notoriously difficult-to-treat disease due to its heterogeneity, with no novel treatments approved in more than a decade," said Regeneron Chief Scientific Officer George Yancopoulos.
Sanofi added its "bold" decision to go without earlier-stage clinical COPD trials had shaved years off the development time.
Bankrupt cryptocurrency exchange FTX said on Thursday it would sell its stake in Web3-focused startup Mysten Labs for $95 million, as it strives to pay back its customers.
The exchange had paid nearly $101 million last year for preferred shares of Mysten and led a funding round that valued the platform which provides infrastructure for Web3 adoption at more than $2 billion.
Web3 refers to a version of the internet that is decentralized, and operates on blockchain technology.
The company on Wednesday reached a deal to recoup more than $400 million in cash from hedge fund Modulo Capital.
Accenture Plc lowered its annual revenue and profit forecasts and decided to cut about 2.5% of its workforce, or 19,000 jobs, the latest sign that the worsening global economic outlook was sapping corporate spending on IT services.
More than half of the jobs to be cut will be in its non-billable corporate functions, Accenture said on Thursday.
Since late last year, the tech sector has laid off hundreds of thousands employees due to a demand downturn caused by high inflation and rising interest rates.
The company expects to incur $1.2 billion in severance costs through fiscal 2023 and 2024.
The Federal Aviation Administration (FAA) said on Thursday it was taking steps to improve its air traffic control operations after a series of near-miss incidents raised questions about U.S. aviation safety.
"There is no question that we are seeing too many close calls," FAA Air Traffic Organization Chief Operating Officer Tim Arel said in a message to employees reviewed by Reuters.
On Wednesday, the FAA issued a separate safety alert to airlines, pilots and others citing the "need for continued vigilance and attention to mitigation of safety risks."
The average long-term U.S. mortgage fell for the second straight week which, combined with moderating home prices, could give house hunters a break and the housing market a boost as the spring buying season begins.
Mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate fell to 6.42% from 6.6% last week. The average rate a year ago was 4.42%.
Even though financial markets remain jittery over recent bank collapses and the Fed raised its benchmark lending rate by another 25 basis points Wednesday, some economists think there may be light at the end of the tunnel for the downtrodden housing market.
A Chinese real estate developer whose struggle to manage more than $300 billion in debt rattled global financial markets announced a long-awaited plan Thursday to restructure what it owes to foreign bondholders.
The Evergrande Group, the global real estate industry's most heavily indebted company, ran short of cash after Beijing tightened controls on corporate debt the ruling Communist Party worries is dangerously high. Some other Chinese developers collapsed, leaving half-finished apartment blocks standing empty.
Evergrande’s struggle prompted fears about possible shockwaves for the global financial system. The Chinese central bank tried to reassure investors, saying its problems could be controlled and were unlikely to spill over.
The labor market continues to defy Federal Reserve attempts to cool hiring, with U.S. applications for unemployment benefits down again last week and remaining at historically low levels.
Jobless claims in the U.S. for the week ending March 18 fell by 1,000 to 191,000 from the previous week, the Labor Department said Thursday.
The four-week moving average of claims, which flattens out some of week-to-week volatility, fell by 250 to 196,250, remaining below the 200,000 threshold for the ninth straight week.
The Bank of England focused on fighting inflation, announcing an 11th consecutive interest rate increase Thursday despite concerns about the economic fallout from troubles in the global financial system.
Britain’s central bank boosted its key rate by a quarter-percentage point to 4.25%, a day after the U.S. Federal Reserve approved a similar move to tame inflation that is crimping household budgets and slowing economic growth.
The decision by the bank’s Monetary Policy Committee came after the U.K. statistics agency surprised policymakers Wednesday by reporting that inflation accelerated to 10.4% in February, driven by the cost of food, clothing and dining out.
Movado Group Inc. on Thursday reported fiscal fourth-quarter earnings of $22.7 million.
On a per-share basis, the Paramus, New Jersey-based company said it had profit of $1. Earnings, adjusted for non-recurring costs, came to $1.03 per share.
The watchmaker posted revenue of $194.3 million in the period.
For the year, the company reported profit of $94.5 million, or $4.12 per share. Revenue was reported as $751.9 million.
Movado expects full-year earnings to be $2.70 to $2.90 per share, with revenue in the range of $725 million to $750 million.
Bitcoin, one of the best performing asset classes of the year, held steady as new headwinds face the crypto industry.
Coinbase, the crypto exchange, disclosed that it has received a Wells Notice from the Securities and Exchange Commission which signals a possible enforcement action could be in progress.
General Mills Inc on Thursday raised its fiscal 2023 forecasts for a fourth time after beating estimates for quarterly results, helped by price increases and steady demand for its packaged-food products.
General Mills' organic sales in the third quarter rose 16%, helped mainly by higher prices, while volumes remained flat.
General Mills had most recently lifted its annual organic sales and profit expectations in February.
The company said on Thursday it now expects organic net sales to rise 10% to 11% in fiscal 2023, compared to its earlier forecast of about 10% growth.
It forecast fiscal 2023 adjusted profit per share to rise between 8% and 9% on a constant-currency basis, compared with its prior range of a 7% to 8% rise.
The company's net sales in the third quarter ending Feb. 26 rose 13% to about $5.13 billion, while analysts had expected $4.97 billion, according to Refinitiv data.
Excluding one-off charges, General Mills earned 97 cents per share, compared with estimates of 93 cents.
Ford Motor Co.'s electric vehicle business has lost $3 billion before taxes during the past two years and will lose a similar amount this year as the company invests heavily in the new technology as it competes with General Motors and Elon Musk's Tesla, both of which are also aggressively building up operations.
Darden Restaurants Inc raised its annual sales forecast after beating third-quarter estimates on Thursday, as more patrons flocked to its Olive Garden and LongHorn Steakhouse chains.
The Orlando, Florida-based restaurant operator recorded strong footfall, despite raising menu prices to offset margin pressures from consistently high costs of labor and commodities, mainly meat and dairy.
Quarterly same-store sales rose 12.3% at Olive Garden, which contributed nearly half to the company's total revenue, while at LongHorn Steakhouse same-store sales were up 10.8%, beating estimates.
"We significantly exceeded the industry for both same-restaurant sales and traffic this quarter, outperforming even more on traffic than on sales," CEO Rick Cardenas said.
TikTok's CEO will face the heat on Capitol Hill when he gets grilled by lawmakers over allegations the social media app is a national security issue due to its China's ties.
Starbucks CEO Laxman Narasimhan will preside over the coffee giant's first shareholder since taking the helm earlier this week from Howard Schultz.
Coinbase Global Inc said on Wednesday it had been issued a Wells notice by the U.S. Securities and Exchange Commission, which could result in the regulator bringing enforcement action against the cryptocurrency exchange.
Coinbase says coinbase products and services continue to operate as usual after being issued Wells notice by SEC staff.
The enforcement action against Coinbase alleges violations of Federal securities laws. Coinbase believes potential enforcement actions would relate to aspects of spot market, staking service, Coinbase earn, Coinbase prime, and Coinbase wallet.
The potential civil action, if taken, may seek injunctive relief, disgorgement, and civil penalties.
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