Stock Market News: ADP payrolls jump, Fed Day, Eli Lilly’s Alzheimer drug

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 3, 2023. REUTERS/Brendan McDermid

U.S. stocks ended lower on Wednesday, reversing gains after comments by Federal Reserve Chair Jerome Powell left investors wondering what the U.S. central bank's next move would be with interest rate hikes.

Indexes initially held onto gains following the Fed's statement. It increased interest rates by a quarter of a percentage point, as expected, and signaled it could pause further hikes.

At the press conference following the statement, Powell said the Fed still views inflation as too high, and said it was too soon to say the rate hike cycle is over.

Heading into the session, investors had been anxious for any signals from the U.S. central bank on whether Wednesday's increase would be the last hike for now.

CVS Health logo is seen displayed in this illustration taken, May 3, 2022. REUTERS/Dado Ruvic/Illustration

CVS Health Corp said on Wednesday it would pause its recent acquisition spree as it focuses on integrating purchases of healthcare service provider Signify Health and primary care provider Oak Street Health.

CVS, which has a large retail pharmacy chain, and major health insurance and pharmacy benefit manager (PBM) units, like other healthcare rivals has been looking to broaden the services it offers.

CEO Karen Lynch said CVS will focus on integrating Signify and Oak Street with its other businesses in the near term.

Longer term, Lynch said, the company might look at additional opportunities in technology for home or health services.

The Pratt & Whitney logo is seen on the side of an engine at the Farnborough International Airshow, in Farnborough, Britain, July 20, 2022. REUTERS/Peter Cziborra

The head of planemaker Airbus said on Wednesday U.S. engine maker Pratt & Whitney has been struggling to support its fleet of passenger jets with enough spare parts and engines.

CEO Guillaume Faury declined comment on a decision by India's third-largest airline, Go First, to file for bankruptcy, which it blamed on problems with the durability of Pratt & Whitney's GTF engines on its Airbus 320neo jets.

Raytheon Technologies unit Pratt & Whitney did not immediately respond to a request for comment.

The world's largest aerospace contractor told investors last week that time on wing - the period between maintenance visits - had improved but was "not yet at the level we and our customers expect". The company said it was continuing to develop upgrades.

Tesla vehicles are shown at a sales and service center in Vista, California, U.S., June 3, 2022. REUTERS/Mike Blake/File Photo

Tesla Inc has resumed taking orders for its Model 3 long-range vehicle in the United States, the company's website showed late on Tuesday, after a temporary halt last year due to delivery backlogs.

The long-range version of the entry-level Model 3 is priced at $47,240 currently, about 18.5% less than the $57,990 it was priced at last August when Tesla halted taking orders in the United States and Canada.

Model 3 Long Range has a range of “325+” miles per charge, down from 358 miles. It is eligible for a $3,750 government subsidy, compared with a full $7,500 subsidy for a Model 3 Performance version.

Tesla expects to resume delivery of the long-range Model 3 electric sedan in June, according to the website. However, it is still not accepting orders in Canada, the website showed.

Ford Mustang Mach-E is presented at the New York International Auto Show, in Manhattan, New York City, U.S., April 5, 2023. REUTERS/David 'Dee' Delgado/File Photo

Ford CEO Jim Farley said Wednesday price cuts in the electric vehicle market "is a worrying trend" after the U.S. automaker cut prices following a series of reductions by rival Tesla.

Ford on Tuesday announced a price cut of up to 8% of its Mustang Mach-E electric vehicle, the second cut the automaker announced this year.

"You do not want to commoditize the product," Farley said at a Wall Street Journal forum. "The resale value for people who bought at higher prices is awful. They never forget."

Ford will follow Tesla price cuts but Farley said "there’s a limit to how far we’ll go."

A Ruth's Chris Steak House sign is shown in San Francisco, Tuesday, April 21, 2020. Darden Restaurants is buying Ruth’s Hospitality Group Inc., the owner of Ruth’s Chris Steak House, for about $715 million, Wednesday, May 3, 2023. Darden will acquire all outstanding shares of Ruth’s for $21.50 per share. (AP Photo/Jeff Chiu, File)

The Ruth’s Chris Steak House chain is being acquired by Darden Restaurants for about $715 million. The original Chris Steak House was opened on New Orlean’s Broad Street in 1927, and it was acquired by Ruth Fertel in 1965.

The company has 154 locations worldwide, including 80 company-owned or -operated restaurants and 74 franchised restaurants.

The company suffered as most restaurants did during the pandemic, closing 23 restaurants in early 2020, furloughing workers and announcing that executives were taking less pay.

Shares of Ruth’s Hospitality Group Inc., which owns the restaurants, recovered within a year of the outbreak. Shares were halted before the market opened and jumped more than 30% at the bell.

Hindenburg Research, the short investor whose reports on companies have erased a big chunk of their value, criticized Icahn Enterprises LP on Tuesday over the reporting of its finances, leading to a 20% drop in the shares of activist investor Carl Icahn's firm.

The development represents a rare challenge for Icahn who is accustomed, as one of the pioneers of shareholder activism, to dressing down companies over their governance and transparency, but has not had to field such criticism himself.

In a report published on Tuesday, Hindenburg accused IEP of overvaluing its holdings and relying on a "Ponzi-like" structure to pay dividends. The subsequent plunge in IEP shares wiped $2.9 billion off Icahn's net worth, leaving him with an estimated $14.7 billion, according to Forbes.

Icahn said in an IEP statement that Hindenburg's "self-serving" report was aimed at generating profits at the expense of IEP's long-term shareholders.

Ford logo is pictured at the 2019 Frankfurt Motor Show (IAA) in Frankfurt, Germany September 10, 2019. REUTERS/Wolfgang Rattay/File Photo

Ford Motor made $1.76 billion last quarter, swinging into the black from a $3.1 billion net loss from a year ago.

Most of the profit came from Ford Blue, the company's internal-combustion engine vehicle unit, which made $2.62 billion before taxes during the quarter.

However, Model e, which is the automaker's electric vehicle unit lost $722 million before taxes.

Excluding one-time items, Ford made 44 cents per share – beating Wall Street estimates of 42 cents, according to FactSet. Revenue rose 20% to $41.74 billion, soundly beating the $39.25 billion that analysts expected.

MARKETS

Ford's profit rises on truck demand but EV outlook sends shares lower

Ford reported a profit of $1.76 billion last quarter, a rebound from the loss the automaker suffered during the same period in the prior year.

POLITICS

Senate to hold hearing on bank failures this week following First Republic collapse

The Senate Banking Committee announced that it will hold a hearing this week in the wake of the failure of First Republic Bank, which was acquired Monday by JPMorgan Chase.

Regional bank stocks continue to take a beating as investors bet there may be more tumult and in Washington, D.C., lawmakers plan a new grilling for more answers with a hearing set for Thursday.

ECONOMY

Fed likely to hike interest rates again, then signal a pause in its inflation fight

The Federal Reserve is expected to hike interest rates for the 10th time amid signs the economy is slowing and once red-hot inflation is starting to cool.

The Federal Reserve's highly anticipated May meeting is expected to hold clearer clues about whether the tightening cycle is nearing an end.