STOCK MARKET NEWS: Queen Elizabeth praised by business leaders, markets see-saw after Powell remarks

Shares of Smith & Wesson slumped about 5% in extended trade on Thursday after the gunmaker posted quarterly results that underscored a drop in consumer demand following a surge two years ago.

The Springfield, Massachusetts, company said its profit tumbled from a year earlier in what it described as a "challenging" July fiscal quarter.

Gun sales to U.S. consumers surged in 2020 and 2021 amid the coronavirus pandemic and worries about civil unrest related to the presidential election and police killings of unarmed Black people.

"As expected, our first quarter results reflected a return to a normal demand pattern at the retail counter for firearms combined with temporary headwinds from inventory corrections within the channel," Smith & Wesson Chief Executive Mark Smith said in a press release.

Smith & Wesson's report echoed quarterly results from rival Sturm, Ruger & Company on Aug. 3. Sturm, Ruger's stock has fallen about 20% since its report.

For its July fiscal quarter, Smith & Wesson reported GAAP net income of $3.3 million, dropping from $76.9 million in the year-ago period. Net sales slumped 69% to $84.4 million.

DocuSign Inc. on Thursday reported a loss of $45.1 million in its fiscal second quarter.

The San Francisco-based company said it had a loss of 22 cents per share. Earnings, adjusted for one-time gains and costs, came to 44 cents per share.

The results topped Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of 42 cents per share.

The provider of electronic signature technology posted revenue of $622.2 million in the period, also beating Street forecasts. Five analysts surveyed by Zacks expected $602.1 million.

For the current quarter ending in October, DocuSign said it expects revenue in the range of $624 million to $628 million.

The company expects full-year revenue in the range of $2.47 billion to $2.48 billion.

Shoppers outside Macy's in the Manhattan, New York City, New York, Mar. 30, 2021. (REUTERS/Caitlin Ochs)

Macy's Inc expects another early start to holiday season shopping this year, a contrast to a prediction from Best Buy Co Inc that highlights the uncertainty among U.S. retailers in forecasting inflation-driven shopping behavior.

Pandemic-induced disruptions to supply chains prompted consumers to start their holiday shopping as early as October in the last two years on fears that in-demand products would disappear from shelves by the traditional period around Thanksgiving in late November.

Even with supply-chain problems showing signs of easing and shelves at stores adequately stocked, Macy's does not expect the trend to change this year.

"We believe that holiday again this year will start early," Macy's Chief Financial Officer Adrian Mitchell said at the Goldman Sachs Global Retailing Conference on Thursday.

The department store chain is also discounting heavily to spur demand for discretionary products such as casual apparel, which has fallen out of fashion due to soaring inflation.

Best Buy Chief Executive Corie Barry said in August she expected shoppers to return to the usual late pre-pandemic holiday shopping pattern this year as they wait for the best deals on products at its stores.

Exterior of the Citibank corporate headquarters in New York, New York, May 20, 2015. (REUTERS/Mike Segar//File Photo)

Citigroup Inc is entitled to recoup about $500 million of its own money that it accidentally wired Revlon Inc lenders three years early, a U.S. appeals court said on Thursday.

Reversing a lower court ruling, the 2nd U.S. Circuit Court of Appeals in Manhattan said it was improper to give the lenders a "huge windfall" by letting them keep Citigroup's money, and that they had been on notice the wiring was a mistake.

Citigroup, acting as Revlon's loan agent, had in August 2020 intended to make a $7.8 million interest payment on a loan for billionaire Ronald Perelman's now-bankrupt cosmetics company, but instead paid off the $894 million loan though it was not due until 2023.

Some creditors returned what they received, but 10 asset managers including Brigade Capital Management, HPS Investment Partners and Symphony Asset Management, whose clients included the Revlon lenders, did not.

They said Citigroup paid exactly what was owed, and they had no reason to believe a sophisticated bank would err so badly. They also noted that Perelman had bailed out Revlon before.

Industry groups warned a ruling against Citigroup could subject banks to excessive liability risks and destabilize the approximately $1.2 trillion U.S. syndicated loan market.

Revlon filed for Chapter 11 protection from creditors on June 15, and Thursday's decision could result in the asset managers being involved in restructuring talks.

The New York-based company's shares fell about 10% within minutes of the decision, but recouped those losses.

MARKETS

Fed's Powell will hike rates 'until the job is done'

Federal Reserve Chair Jerome Powell is flexing his muscle again, saying policymakers won't botch the fight to tame inflation that is still running near a 40-year high.

Fed Chair Jerome Powell made it crystal clear again that policymakers won't take their foot off the peddle, right now anyways, with future rate hikes.

MasterCraft Boat Holdings fell more than 15% Thursday. The maker of MasterCraft, Crest and Aviara powerboats expects fiscal 2023 revenue and profit to be lower than fiscal 2022.

Fiscal 2023 net sales are expected to be between $580 million and $615 million. Fiscal 2022 net sales were $707.9 million. Adjusted earnings per share is seen between $3.89 and $4.31. Fiscal 2022 diluted adjusted net income per share was $4.54.

“Looking forward, the potential for a weakening economy has caused us to approach our wholesale production plan for fiscal 2023 with a prudent level of conservatism,” said Chair and CEO Fred Brightbill.

The company sold its NauticStar business to Iconic Marine Group. The transaction closed on September 2. Terms were not disclosed.

Fiscal fourth quarter revenue and profit that topped Wall Street estimates.

Net sales increased 39.9% to $217.7 million from the prior-year period. The estimate was $195.26 million.

Net income for the three months ended June 30 was $11.5 million, compared to $16.5 million in the prior-year period.

Diluted adjusted net Income per share was $1.77, better than the estimate of $1.50.

Coinbase logo in this illustration taken, March 4, 2022. (REUTERS/Dado Ruvic/Illustration)

Crypto exchange Coinbase on Thursday said it was funding a lawsuit against the U.S. Treasury Department to block sanctions barring Americans from Tornado Cash, a virtual currency mixer accused of helping hackers launder proceeds for cybercrimes.

The Treasury Department imposed sanctions on Tornado Cash last month over allegations they had laundered more than $7 billion worth of virtual currency. Some of those proceeds went to North Korean government-backed hackers, the department says.

Tornado Cash did not comment on the sanctions when they were imposed on Aug. 8 and representatives for the platform were not immediately reachable. Coinbase CEO Brian Armstrong said the Treasury Department had gone too far "by sanctioning an entire technology instead of specific individuals."

Armstrong added: "[There] are legitimate applications for this type of technology and as a result of these sanctions, many innocent users now have their funds trapped and have lost access to a critical privacy tool."

Armstrong said Coinbase was funding the lawsuit, which he said was brought by six people. The New York Times reported that the lawsuit was filed on Thursday in federal court in the Western District of Texas.

The Treasury Department did not immediately respond to a request for comment.

Mercedes-Benz Vans and Rivian have signed a memorandum of understanding for a joint venture to produce electric vans in a factory in central or eastern Europe within the next few years, Mercedes-Benz Vans said on Thursday.

The companies are planning ways to produce both of their models on a joint production line, Mercedes-Benz said, adding it was also developing a new all-electric van architecture of its own called VAN.EA.

The two companies will make two large vans — one based on Mercedes-Benz's VAN.EA platform and the other based on the Rivian Light Van electric platform — at the plant, the statement said, without disclosing the precise location.

The collaboration with Mercedes comes at a crucial time for Rivian. The electric van and adventure vehicle company has struggled to ramp up production at its Illinois factory as supply chain disruptions and rising materials prices forced it to cut staff and delay product programs.

Rivian shares are down nearly 68% for the year to date.

Sharing the costs of a European assembly plant with Mercedes should help the startup, which burned through $1.2 billion in the second quarter, conserve cash and save for its second U.S. assembly plant planned for 2025.

Job fair sign on 5th Avenue, Manhattan, New York City, September 3, 2021. (REUTERS/Andrew Kelly)

The number of Americans filing new claims for unemployment benefits fell last week to a three-month low, underscoring the robustness of the labor market even as the Federal Reserve raises interest rates.

Initial claims for state unemployment benefits declined 6,000 to a seasonally adjusted 222,000 for the week ended Sept. 3, the Labor Department said on Thursday.

Data for the previous week was revised to show 4,000 fewer applications filed than previously reported. Economists polled by Reuters had forecast 240,000 applications for the latest week.

Claims remained well below the 270,000-300,000 range that economists say would signal a material slowdown in the labor market. However, the number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 36,000 to a nearly five-month high of 1.473 million in the week ending Aug. 27.

Meme stock GameStop saw gains on Thursday after the video game retailer narrowed quarterly losses to $107 million or $0.35 vs. an expected loss of $0.42. Sales came in slightly below expectations at $1.14 billion. Additionally, it announced a partnership with the cryptocurrency exchange FTX.

MARKETS

Ryan Cohen missing from GameStop earnings call; no Bed Bath & Beyond mention

Ryan Cohen did not speak on GameStop's earnings call Wednesday as the video game retailer announced its financial results for the second quarter of 2022.

NYSE Traders (AP)

U.S. equity futures were searching for direction on Thursday following a rally.

Oil prices rebounded Thursday morning after dropping below key technical support levels in the previous session.

U.S. crude futures were trading around $82.00 per barrel.

Brent crude futures trading around $88.00 per barrel after closing at their lowest since early February in the previous session.

Traders will be listening to Fed Chairman Jerome Powell when he appears at the Cato Institute's annual monetary conference. The event will highlight a conversation with Powell on monetary policy.

On the economic docket will be the latest jobless claims figures.

In Asia, Japan's benchmark Nikkei 225 surged 2.3%, Hong Kong's Hang Seng slipped 1.0% and China's Shanghai Composite fell 0.3%.

Investors are also watching for what may happen on interest rates at the European Central Bank's meeting.

On Wall Street, the S&P 500 rose 1.8%, its biggest single-day gain in four weeks, with roughly 95% of the stocks in the benchmark index closing higher. The Dow Jones Industrial Average rose 1.4% and the tech-heavy Nasdaq climbed 2.1%. 

The yield on the 10-year Treasury, which influences interest rates on mortgages and other loans, was at 3.26% Thursday morning.

Goldman Sachs sign at NYSE (AP)

Goldman Sachs sees the Federal Reserve raising interest rates by another 75 basis points this month, the investment bank's analysts said in a note.

They had previously forecast a 50 bps hike in September.

Goldman analysts see a road of steeper hikes. The analysts also raised their November forecast from 25 bps to 50 bps and see the Fed Funds rate window at 3.75-4% by year's end.

"Fed officials have sounded hawkish recently and have seemed to imply that progress toward taming inflation has not been as uniform or as rapid as they would like," said the analysts, led by economist Jan Hatzius, in the note published late on Wednesday.

"How the drag from tighter financial conditions will net out with other key growth impulses in 2023 is more uncertain, and we could imagine the hiking cycle extending beyond this year."

Fed funds futures imply about a 77% chance of a 75 bps hike at the September policy meeting and a peak in the benchmark rate of around 4% in early 2023.

Reuters contributed to this post.

European Central Bank logo (Reuters)

The European Central Bank's meeting Thursday is not about whether to raise rates, but by how much. 

Analysts say it will be between a half-point and three-quarters of a point. 

The ECB is playing catchup as inflation hits a record 9.1%. It could go higher as prices for natural gas go through the roof because Russia has been cutting back supplies. 

Mother's Hair Beauty Supply (Getty)

EXCLUSIVE: The latest Verizon Business survey found a growing number of small business owners are worried about their financial security with inflation cited as their biggest headache.

And a majority say business is not better than it was a year ago.

The annual State of Small Business poll conducted by Morning Consult and released Thursday shows rising prices remain decision-makers' prime concern, with more than 82% of respondents expressing worries over inflation.

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Gas prices (AAA)

The average price of a gallon of gasoline slipped on Wednesday to $3.751, according to AAA. Wednesday's price was $3.764. Gas has been on the decline since hitting a high of $5.016 on June 14.

Analysts and traders say wholesale gasoline prices are expected to keep falling in coming months as U.S. refiners overproduce fuel to try to rebuild low stocks of diesel and heating oil.

Diesel's price slipped to $5.040 per gallon.

Oil drilling Reuters)

Oil prices rebounded Thursday morning after dropping below key technical support levels in the previous session.

U.S. crude futures were trading around $82.00 per barrel.

Brent crude futures trading around $88.00 per barrel after closing at their lowest since early February in the previous session.

The energy standoff between Europe and Russia focused investor minds on how tight fuel supply may become. Prices drew support from Russian President Vladimir Putin's threat to halt the country's oil and gas exports if price caps are imposed by European buyers.

The European Central Bank is expected to raise interest rates sharply when it meets later on Thursday. A U.S. Federal Reserve meeting follows on Sept. 21.

Bitcoin was trading around $19,000, after snapping a two-day losing streak.

For the week, Bitcoin was trading more than 3% lower. For the month, the cryptocurrency was off more than 4%. Bitcoin is down more than 58% year-to-date.

Ethereum was trading around $1,600.For the week, Ethereum was trading higher by more than 5%.

Dogecoin was at 5 cents and was up less than 1% in the past week.