Stocks reverse gains, Intel weighs on chip stocks
4Q GDP surged 6.9%
U.S. stocks pared gains Thursday midday on weakness in technology names.
The Nasdaq Composite fell about 0.4% in part due to weakness in semiconductor names including Intel after sales grew just 3% in the last quarter and profits slipped over 21%. The supply chain crunch continues to create headwinds for the industry.
|I:COMP||NASDAQ COMPOSITE INDEX||13225.759838||+124.78||+0.95%|
|AMD||ADVANCED MICRO DEVICES INC.||119.98||+0.51||+0.43%|
The S&P 500 also slipped, while the Dow Jones Industrial Average was little changed, giving up a 400+ point gain from earlier.
|I:DJI||DOW JONES AVERAGES||33572.14||+510.57||+1.54%|
Investors also continue to assess what may be as many as four rate hikes this year, starting in March. The Federal Reserve said monthly bond purchases that push down long-term rates by injecting money into the financial system would be phased out in March. The yield on the 10-year Treasury hovered near 1.84%.
Oil pared after hitting the $88 per barrel level.
|USO||UNITED STATES OIL FUND L.P.||62.55||+1.92||+3.17%|
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In earnings, McDoanld's shares traded down after revenue rose 13% to $6.01 billion, which was just shy of Wall Street expectations, according to a survey of industry analysts by FactSet, with sales crimped by coronavirus restrictions in Australia and China.
Global same-store sales __ or sales at restaurants open at least a year __ rose 12.3% in the quarter better than the 10.5% increase that Wall Street was expecting. In the U.S., same-store sales rose 7.5% as limited-time products like the McRib drew customers despite higher menu prices. McDonald's said in the fall that U.S. prices would be 6% higher in 2021 than the prior year.
|F||FORD MOTOR CO.||12.11||+0.11||+0.92%|
|GM||GENERAL MOTORS CO.||33.02||+0.70||+2.17%|
|TM||TOYOTA MOTOR CORP.||146.12||+5.45||+3.87%|
Separately, Fed Chair Powell confirmed the semiconductor shortage will likely persist into next year sharing a similar view as Ford CEO Jim Farley. Other automakers including GM and Toyota are also dealing with production issues tied to the shortage.
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As is Tesla, which posted a record annual profit of $5.5 billion, up from the previous record of $3.47 billion in 2020, which was its first profitable year. It also had a record fourth-quarter profit of $2.32 billion in 2021 according to its earnings report.
Netflix announced it will be rising prices to $9.99 on February 27, 2022 with some customers receiving the update via email. Separately, activist investor Bill Ackman took a 3.1 million stake in the streaming giant. The stock, last week, had its worst one-day percentage drop since 2012.
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The U.S. economy grew 6.9% in the fourth quarter.
On the jobs front, the Labor Department's tally of new claims for unemployment benefits for last week were in-line with expectations at 260,000, after surging unexpectedly to a 3-month high of 286,000 the prior week. Continuing claims, which track the total number of unemployed workers collecting benefits, rose to 1.675 million, still below pre-pandemic levels.
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And new orders for manufactured big-ticket items fell a seasonally adjusted 0.9% month-over-month in December, following a larger-than-expected increase of 2.6% the prior month. If you factor out the transportation component, orders are rose 0.4% after a 0.9% pop in November. Orders for core capital goods, a closely watched proxy for business spending, were flat.
Finally, the National Association of Realtors reported sales in December fell 3.8% more than the expected 0.2%. This follows a surprise drop of 2.2% in November on low inventory.
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In the afternoon it’s all about Apple. The iPhone maker is expected to say fiscal 1Q earnings-per-share jumped 12% to $1.89 on a 6.5% rise in revenue to $118.66 billion, as it contends with supply chain issues and the impact of retail store closings from Omicron.
Bitcoin and other cryptocurrencies traded lower as well in response to the Fed. Bitcoin traded below $37,000
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The Associated Press contributed to this report.