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  • U.S. stocks close sharply higher, with tech shares rallying on hopes for debt-ceiling deal

    U.S. stocks close sharply higher, with tech shares rallying on hopes for debt-ceiling deal

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    U.S. stocks ended sharply higher Friday, with the technology-heavy Nasdaq Composite leading the way up, as hopes rose for a debt-ceiling deal in Congress.

    The Nasdaq and S&P 500 also closed at their highest levels since August 2022.

    How stock indexes traded

    • The Dow Jones Industrial Average
      DJIA,
      +1.00%

      rose 328.69 points, or 1%, to close at 33,093.34, snapping a five-day losing streak.

    • The S&P 500
      SPX,
      +1.30%

      gained 54.17 points, or 1.3%, to finish at 4,205.45.

    • The Nasdaq Composite
      COMP,
      +2.19%

      jumped 277.59 points, or 2.2%, to end at 12,975.69.

    For the week, the Dow fell 1%, while the S&P 500 edged up 0.3% and the Nasdaq advanced 2.5%. The tech-heavy Nasdaq booked a fifth straight week of gains for its longest win streak since the stretch ending in early February, according to Dow Jones Market Data.

    What drove markets

    Stocks rose ahead of Memorial-Day weekend as investors were encouraged by reports suggesting that Congress was close to a deal to raise the U.S. debt ceiling.

    “It’s a little bit of a relief rally on the debt ceiling,” said Ryan Belanger, founder and managing principal at Claro Advisors, in a phone interview Friday.

    While Treasury Secretary Janet Yellen says the U.S. could run out of money as soon as June 1 if the debt ceiling is not raised, other projections estimate the federal government may have until the middle of the month.

    “I think we’ll all be able to exhale by mid-June, although it will likely be an increasingly volatile market environment between now and then,” said Kristina Hooper, chief global market strategist at Invesco. “Once that drama recedes, I think all eyes will be back on central banks.”

    Belanger said that he’s expecting the Federal Reserve may raise its benchmark interest rate by another quarter percentage point in June to battle high inflation.

    The Bureau of Economic Analysis said Friday that the personal-consumption-expenditures-price index showed core inflation, which excludes food and energy, rose 0.4% in April. That’s more than the 0.3% increase that economists had expected, as core inflation rose 4.7% year over year from a rate of 4.6% in March.

    Rubeela Farooqi, chief U.S. economist at High Frequency Economics, said inflation appeared to be moving “in the wrong direction” at the start of the second quarter.

    Fed-funds-futures traders now see a 65.9% chance of the Fed hiking its rate by a quarter percentage point in June, and a 34.1% probability of a pause, according to the CME’s FedWatch Tool, at last check. In the bond market, two-year Treasury yields
    TMUBMUSD02Y,
    4.563%

    rose 7.9 basis points Friday to 4.587%, according to Dow Jones Market Data.

    PCE data also showed consumer spending sprang back to life in April, rising 0.8%, the largest gain in three months to surpass expectations, as Americans bought more cars and spent more on services.

    “The consumer is hanging in there,” said Victoria Fernandez, chief market strategist at Crossmark Global Investments, in a phone interview Friday. “I don’t think we want to underestimate the ability of the consumer to continue spending, even if they’re spending a little bit less.”

    Meanwhile, the U.S. Census Bureau said Friday that orders for manufactured durable goods in the U.S. jumped 1.1% in April. The gain was largely driven by military spending, but business investment rose sharply as well.

    Updated GDP data released earlier this week showed the U.S. economy grew at annual pace of 1.3% during the first quarter, above previous estimates.

    For now, debt-ceiling optimism and enthusiasm surrounding artificial intelligence are outweighing concerns about the potential for another Fed rate hike, according to Fernandez. “I just don’t think there is the demand destruction that the Fed is looking for at this point in time,” she said, as the unemployment rate remains low.

    Fernandez said she anticipates the Fed could pause its interest-rate hikes in June to asses the economy before potentially raising its policy rate again in July.

    Technology stocks have helped propel gains this week in the U.S. equities markets, with Nvidia’s stock
    NVDA,
    +2.54%

    surging Thursday on optimism surrounding its AI-fueled outlook for sales in the second quarter.

    The tech-heavy Nasdaq Composite has soared 24% this year through Friday. “I would be taking profits on the Nasdaq,” said Belanger, suggesting some stocks in the index have become frothy amid the AI buzz.

    Companies in focus

    —Steve Goldstein contributed to this report.

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  • Tesla Stock Rises After Annual Meeting. Here’s Why.

    Tesla Stock Rises After Annual Meeting. Here’s Why.

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  • Ford swings to quarterly profit, guidance kept unchanged; stock slips

    Ford swings to quarterly profit, guidance kept unchanged; stock slips

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    Ford Motor Co. late Tuesday swung to a quarterly profit and reported a 20% rise in sales, but the stock fell 1.4% in the extended session as Wall Street seemed to question Ford’s unchanged guidance.

    Ford F “delivered a solid quarter while making real progress on our Ford+ growth plan,” Chief Executive Jim Farley said in a call with analysts following results.

    “I…

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  • Chegg, Arista, Uber, Pfizer, DuPont, and More Stock Market Movers

    Chegg, Arista, Uber, Pfizer, DuPont, and More Stock Market Movers

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  • Tesla’s Profit Margins Were Just Bad. The Stock Is Diving.

    Tesla’s Profit Margins Were Just Bad. The Stock Is Diving.

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    Price wars have consequences, even for Tesla, the world’s most valuable car company. 

    Tesla‘s (ticker: TSLA) first-quarter earnings, reported Wednesday evening, met expectations, but its first-quarter automotive gross profit margins were bad. No matter how investors slice and dice the numbers, results will leave them with questions about EV demand and Tesla’s pricing strategy.

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  • Tesla’s Price War Could Hit Its Profits

    Tesla’s Price War Could Hit Its Profits

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    Electric vehicle leader


    Tesla


    is expected to report lower earnings on higher sales Wednesday evening after the electric vehicle maker slashed prices to draw in buyers.

    The EV war, with traditional auto makers spending billions to catch


    Tesla


    (ticker: TSLA), has morphed into a price war. The car maker’s quarterly earnings will help investors figure out who is winning.

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  • Tesla Cuts EV Prices Again

    Tesla Cuts EV Prices Again

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    Tesla


    is at it again.

    The electric-vehicle maker lowered prices for its EVs in the U.S. again. This change hints at what might be happening to Tesla (ticker: TSLA) vehicles’ eligibility for purchase tax credits under stricter rules about to be applied by the IRS.

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  • Apple, Amazon, Alphabet, Ford, Nordstrom, and More Stock Market Movers

    Apple, Amazon, Alphabet, Ford, Nordstrom, and More Stock Market Movers

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  • Ford logs $2 billion loss in 2022, says profit was left ‘on the table’

    Ford logs $2 billion loss in 2022, says profit was left ‘on the table’

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    Ford Motor Co. late Thursday reported a $2 billion loss for the year and mixed quarterly results, blaming “deeply entrenched” shortcomings around costs and systems that put the brakes on its hopes to become a more nimble company.

    “I’ll start by addressing the obvious. Our fourth-quarter and full-year financial performance last year fell short of our potential,” Chief Executive Jim Farley said in a post-results conference call. “To say I’m frustrated is an understatement, because the year could have been so much more for us at Ford.”

    Ford
    F,
    +3.84%

    earned $1.3 billion, or 32 cents a share, in the fourth quarter, compared with $12.3 billion, or $3.03 a share, in the year-ago period.

    Adjusted for one-time items, the company earned 51 cents a share. Revenue rose 17% to $44 billion.

    Analysts polled by FactSet expected Ford to report adjusted earnings of 62 cents a share on sales of $41.4 billion.

    Ford stock fell more than 6% in extended trading after the results, holding around those levels as the call continued. It ended the regular trading day up 3.8%.

    “We have deeply entrenched issues in our industrial system that have proven tough to root out,” Farley said.

    Ford announced a reorganization last March, carving out its EV business and setting up business lines for its legacy conventionally powered vehicles and for its vans and other commercial vehicles.

    As with “any transformation of this magnitude,” some parts moved faster than others, even though he remains optimistic about the plan, Farley told investors.

    For 2023, Ford guided for between $9 billion to $11 billion in EBIT, but cautioned that headwinds included a potential “mild” recession in the U.S. and a “moderate” recession in Europe, higher customer incentives for the industry as a whole, and a “continued” strong dollar.

    Catalysts, however, include supply-chain improvements and higher industry volumes as well as lower costs for commodities, logistics and other aspects of the business, it said.

    The auto maker declared a first-quarter regular dividend of 15 cents a share and a supplemental dividend of 65 cents a share, saying that the supplemental dividend reflected the monetization of Ford’s stake in EV startup Rivian Automotive Inc.
    RIVN,
    +5.94%
    .
    That unwinding began in May and “now is nearly complete,” Ford said.

    The company said it will hold an investor event on March 23, which it dubbed a “teach-in” about the new structure.

    Ford said Monday that it was “significantly increasing” production of its Mustang Mach-E electric SUV in 2023 and lowering prices.

    The Mach-E was the No. 3 best-selling EV model in the U.S. in 2022, “and the updated pricing is part of Ford’s plan to keep the SUV competitive in a rapidly changing market,” Ford said at the time.

    Tesla Inc.
    TSLA,
    +3.78%

    earlier this month slashed prices of several of its models, including its cheaper Model Y compact SUV and Model 3 sedan, in the U.S. and in several European countries by between 6% and 20%.

    GM
    GM,
    +5.60%
    ,
    which reported fourth-quarter earnings on Tuesday, and Chief Executive Mary Barra said the auto maker did not plan on lowering its prices, saying GM cars are priced “right where they need to be.”

    See also: Tesla and Ford are cutting auto prices, but GM says it won’t

    Ford shares have lost about 31% in the last 12 months, compared with losses of around 9% for the S&P 500 index
    SPX,
    +1.47%
    .

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  • 7 EVs That Can Cost Less Than the Average New Car

    7 EVs That Can Cost Less Than the Average New Car

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    Electric vehicle buyers in the U.S. can now get a purchase tax credit from the government, and it has pushed the price of several high-volume EVs below the average price paid for a new car in America.

    There are currently seven high-volume EVs that cost less than the average new car, including two


    Tesla


    (ticker: TSLA) models. Buyers should look at those if they are thinking about going electric.

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  • Ford Stock Is on Fire. The Reason Isn’t What You’d Expect.

    Ford Stock Is on Fire. The Reason Isn’t What You’d Expect.

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    The outlook for the car market in 2023 is uncertain, but that isn’t stopping investors from piling into


    Ford Motor


    shares.



    Ford


    (ticker: F) stock is up 23 cents, or 1.9%, at $13.48 in midday trading Thursday. The


    S&P 500


    and


    Dow Jones Industrial Average


    are up about 0.9% and 0.7%, respectively.

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  • Ford Stock Falls. Don’t Let $1.7 Billion Truck Rollover Trial Distract You.

    Ford Stock Falls. Don’t Let $1.7 Billion Truck Rollover Trial Distract You.

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    Ford Motor


    has a legal hearing set to start Monday related to a product liability case that resulted in a $1.7 billion punitive award against the auto maker. Investors seem to be a little nervous about the Georgia case. They probably don’t need to be — yet.

    The award was part of a jury verdict that held, in part, Ford (ticker: F) was responsible for insufficient roof strength of its super-duty trucks. Two people were killed in 2014 after their super-duty truck rolled over. Ford maintains that its design is sound.

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  • Tesla’s Elon Musk Has a Finance Lesson For Investors. They Disagree.

    Tesla’s Elon Musk Has a Finance Lesson For Investors. They Disagree.

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    There is little time off for investors following


    Tesla


    these days. The weekend before Christmas is no exception. In the past couple of days, there have been more tweets about


    Tesla


    ‘s management. Investors have also learned where


    Tesla


    might put its next manufacturing plant. And Elon Musk has a finance lesson for investors.

    “Securities Analysis 101,” tweeted out the Tesla (ticker: TSLA) CEO on Saturday. “As the ‘risk-free’ real rate of return from Treasury Bills approaches the much riskier rate of return from stocks, the value of stocks drop. For example, if T-bills and stocks both had a 10% rate of return, everyone would just buy the former.”

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  • Why 2023 Could Be Tough on Tesla

    Why 2023 Could Be Tough on Tesla

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    Eventually supply and demand realities catch up with everyone—even


    Tesla

    Morgan Stanley analyst Adam Jonas looked into 2023 and sees some concerning signs for electric-vehicle makers.


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  • Does Tesla Have a Demand Issue? This Wall Street Analyst Thinks So.

    Does Tesla Have a Demand Issue? This Wall Street Analyst Thinks So.

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    Headwinds for


    Tesla


    —and its stock—appear to be growing. The latest may be among the biggest concerns of all for the company.

    Bernstein analyst Toni Sacconaghi wrote Tuesday that


    Tesla


    (ticker: TSLA) “increasingly appears to have a demand issue.”

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  • Justices asked to hear dog toy dispute. Will they bite?

    Justices asked to hear dog toy dispute. Will they bite?

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    WASHINGTON — The company that makes Jack Daniel’s is howling mad over a squeaking dog toy that parodies the whiskey’s signature bottle. Now, the liquor company is barking at the door of the Supreme Court.

    Jack Daniel’s has asked the justices to hear its case against the manufacturer of the plastic Bad Spaniels toy. The high court could say as soon as Monday whether the justices will agree. A number of major companies from the makers of Campbell Soup to outdoor brand Patagonia and jeans maker Levi Strauss have urged the justices to take what they say is an important case for trademark law.

    The toy that has Jack Daniel’s so doggone mad mimics the square shape of its whisky bottle as well as its black-and-white label and amber-colored liquor while adding what it calls “poop humor.” While the original bottle has the words “Old No. 7 brand” and “Tennessee Sour Mash Whiskey,” the parody proclaims: “The Old No. 2 on Your Tennessee Carpet.” Instead of the original’s note that it is 40% alcohol by volume, the parody says it’s “43% Poo by Vol.” and “100% Smelly.”

    The back of the toy, which retails for about $13 to $20, says in small font “this product is not affiliated with Jack Daniel Distillery.”

    The toy’s maker says Jack Daniel’s can’t take a joke. “It is ironic that America’s leading distiller of whiskey both lacks a sense of humor and does not recognize when it — and everyone else — has had enough,” lawyers for Arizona-based VIP Products wrote the high court. They told the justices that Jack Daniel’s has “waged war” against the company for “having the temerity to produce a pun-filled parody” of its bottle.

    But Jack Daniel’s lead attorney, Lisa Blatt, made no bones about the company’s position in her filing.

    “To be sure, everyone likes a good joke. But VIP’s profit-motivated ‘joke’ confuses consumers by taking advantage of Jack Daniel’s hard-earned goodwill,” she wrote for the Louisville, Kentucky-based Brown-Forman Corp., Jack Daniel’s parent company.

    Blatt wrote that a lower court decision provides “near-blanket protection” to humorous trademark infringement. And she said it has “broad and dangerous consequences,” pointing to children who were hospitalized after eating marijuana-infused products that mimicked candy packaging.

    If VIP Products is allowed to confuse consumers with dog toys, “other funny infringers can do the same with juice boxes or marijuana-infused candy,” Blatt wrote.

    The toy is part of a line of VIP Products called Silly Squeakers that mimic liquor, beer, wine and soda bottles. They include Mountain Drool, which parodies Mountain Dew, and Heini Sniff’n, which parodies Heineken. A court in 2008 barred the company from selling its Budweiser parody, ButtWiper.

    After the company began selling its Bad Spaniels toy in 2014, Jack Daniel’s told the company to stop, but VIP went to court to be allowed to continue to sell its product. Jack Daniel’s won the first round in court but lost an appeal. The case reached the Supreme Court at an earlier stage, but the justices didn’t bite.

    Bad Spaniels isn’t the only parody puppy toy to draw the ire of the brand it imitated. Luxury bag maker Louis Vuitton sued the makers of Chewy Vuiton over their plush purse dog toys. In 2007 a federal appeals court sided with the chew toy’s manufacturers, Nevada-based Haute Diggity Dog. Louis Vuitton didn’t appeal to the Supreme Court.

    The case is Jack Daniel’s Properties Inc. v. VIP Products LLC, 22-148.

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  • Justices asked to hear dog toy dispute. Will they bite?

    Justices asked to hear dog toy dispute. Will they bite?

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    WASHINGTON — The company that makes Jack Daniel’s is howling mad over a squeaking dog toy that parodies the whiskey’s signature bottle. Now, the liquor company is barking at the door of the Supreme Court.

    Jack Daniel’s has asked the justices to hear its case against the manufacturer of the plastic Bad Spaniels toy. The high court could say as soon as Monday whether the justices will agree. A number of major companies from the makers of Campbell Soup to outdoor brand Patagonia and jeans maker Levi Strauss have urged the justices to take what they say is an important case for trademark law.

    The toy that has Jack Daniel’s so doggone mad mimics the square shape of its whisky bottle as well as its black-and-white label and amber-colored liquor while adding what it calls “poop humor.” While the original bottle has the words “Old No. 7 brand” and “Tennessee Sour Mash Whiskey,” the parody proclaims: “The Old No. 2 on Your Tennessee Carpet.” Instead of the original’s note that it is 40% alcohol by volume, the parody says it’s “43% Poo by Vol.” and “100% Smelly.”

    The back of the toy, which retails for about $13 to $20, says in small font “this product is not affiliated with Jack Daniel Distillery.”

    The toy’s maker says Jack Daniel’s can’t take a joke. “It is ironic that America’s leading distiller of whiskey both lacks a sense of humor and does not recognize when it — and everyone else — has had enough,” lawyers for Arizona-based VIP Products wrote the high court. They told the justices that Jack Daniel’s has “waged war” against the company for “having the temerity to produce a pun-filled parody” of its bottle.

    But Jack Daniel’s lead attorney, Lisa Blatt, made no bones about the company’s position in her filing.

    “To be sure, everyone likes a good joke. But VIP’s profit-motivated ‘joke’ confuses consumers by taking advantage of Jack Daniel’s hard-earned goodwill,” she wrote for the Louisville, Kentucky-based Brown-Forman Corp., Jack Daniel’s parent company.

    Blatt wrote that a lower court decision provides “near-blanket protection” to humorous trademark infringement. And she said it has “broad and dangerous consequences,” pointing to children who were hospitalized after eating marijuana-infused products that mimicked candy packaging.

    If VIP Products is allowed to confuse consumers with dog toys, “other funny infringers can do the same with juice boxes or marijuana-infused candy,” Blatt wrote.

    The toy is part of a line of VIP Products called Silly Squeakers that mimic liquor, beer, wine and soda bottles. They include Mountain Drool, which parodies Mountain Dew, and Heini Sniff’n, which parodies Heineken. A court in 2008 barred the company from selling its Budweiser parody, ButtWiper.

    After the company began selling its Bad Spaniels toy in 2014, Jack Daniel’s told the company to stop, but VIP went to court to be allowed to continue to sell its product. Jack Daniel’s won the first round in court but lost an appeal. The case reached the Supreme Court at an earlier stage, but the justices didn’t bite.

    Bad Spaniels isn’t the only parody puppy toy to draw the ire of the brand it imitated. Luxury bag maker Louis Vuitton sued the makers of Chewy Vuiton over their plush purse dog toys. In 2007 a federal appeals court sided with the chew toy’s manufacturers, Nevada-based Haute Diggity Dog. Louis Vuitton didn’t appeal to the Supreme Court.

    The case is Jack Daniel’s Properties Inc. v. VIP Products LLC, 22-148.

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  • Subtropical Storm Nicole forms, threatens Bahamas, US coast

    Subtropical Storm Nicole forms, threatens Bahamas, US coast

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    MIAMI — Subtropical Storm Nicole has formed in the Atlantic Ocean, bringing threats of a “prolonged period of hazardous weather” to parts of the Bahamas and the southeastern coast of the United States, the National Hurricane Center in Miami said Monday.

    A tropical storm watch is in effect for the northwestern Bahamas, including Andros Island, New Providence, Eleuthera, Abacos Islands, Berry Islands, Grand Bahama Island, and Bimini, forecasters said.

    At 5 a.m. Monday, the “sprawling” storm was located about 555 miles east of the northwestern Bahamas. It was about 555 miles (895 kilometers) east of the northwestern Bahamas, with maximum sustained winds at 45 mph (75 kmh), the hurricane center said in an advisory.

    “It’s not out of the question for Nicole to reach hurricane strength, especially given how warm the waters are in the vicinity of the Bahamas,” the advisory said. “It should be stressed, however, that no matter Nicole’s ultimate intensity, the storm’s large size will likely cause significant wind, storm surge, and rainfall impacts over a large portion of the northwestern Bahamas, Florida, and the southeastern coast of the United States during much of the upcoming week.”

    Forecasters advised those living in the central Bahamas, Florida, and along the southeastern coast of the United States to monitor progress of the storm. Additional watches will likely be required by later Monday, the advisory said.

    The storm was expected to produce heavy rainfall across the northwestern Bahamas Tuesday through Thursday, impacting portions of Florida and other areas of the U.S. coastline mid-to-late week.

    Large parts of Florida are still reeling from destructive Hurricane Ian, which slammed into the southwestern portion of the state in Sept. 28 as a strong Category 4 hurricane and dumped massive amounts of rain, causing flooding across central Florida.

    A subtropical storm is a non-frontal low-pressure system that has characteristics of both tropical and extratropical cyclones. They tend to be large and have a larger wind field, extendung much further from their centers. Forecasters said in the advisory that the storm could possibly transition into a tropical system as it continues to develop.

    The Atlantic hurricane season began on June 1 and ends on Nov. 30.

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  • Ford reins in hopes for self-driving cars as Argo AI shuts down

    Ford reins in hopes for self-driving cars as Argo AI shuts down

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    After betting big on self-driving cars — including $1 billion on soon-to-be shuttered startup Argo AI — Ford Motor Co. is softening its expectations on vehicles that don’t require drivers.

    Ford
    F,
    -0.08%

    executives on Wednesday said they were winding down their investment in Argo, which confirmed an earlier report of its plans to shut down, saying there were too many challenges to running a profitable network of fully self-driving vehicles anytime soon. That resulted in a $2.7 billion impairment on the startup, disclosed when Ford reported third-quarter results earlier in the day.

    “We still believe in Level 4 autonomy, that it will have a big impact on our business of moving people,” Ford CEO Jim Farley said on the company’s earnings call, referring to cars that are autonomous enough not to need handling from a driver. “We’ve learned, though, in our partnership with Argo, and after our own internal investments, that we will have a very long road.”

    “It’s estimated that more than $100 billion has been invested in the promise of Level 4 autonomy,” he continued. “And yet no one has defined a profitable business model at scale.”

    Executives described hurdles with building out technology and auto fleets, as well as the vast infrastructure of non-technological services, to turn a profit on self-driving cars. And they said the talents of the staff they have today would be better spent on less-sophisticated driver-assistance systems.

    Argo AI told MarketWatch that some of its 2,000 employees would be able to continue working on the vehicle technology with Ford and Volkswagen AG. Volkswagen
    VOW,
    +0.41%

    was Argo’s other big backer.

    “In the third quarter, Ford made a strategic decision to shift its capital spending from the L4 advanced driver-assistance systems being developed by Argo AI to internally developed L2+/L3 technology,” executives said in Ford’s earnings release. “Earlier, Argo AI had been unable to attract new investors.”

    The remarks came as the auto industry deals with more immediate concerns about both production and demand, as ongoing supply-chain contortions lead to parts shortages and higher prices. Some signs have emerged that those supply-chain hitches have eased. But higher prices risk spooking potential car buyers.

    During the call on Wednesday, executives said they’d seen a slight downtick in commodity prices. But Farley painted a mixed portrait of pricing and demand trends.

    Demand for commercial vehicles and electric vehicles was “through the roof,” he said. But he noted a “slight uptick” from the prior quarter on 84-month customer financing, as customers stretch out car payments. And he said some of Ford’s rivals had boosted spending on incentives.

    Meanwhile, Ford’s third-quarter results beat analysts’ estimates, though the auto maker forecast full-year adjusted profit at the low end of its expectations.

    Ford reported a net loss of $800 million for the third quarter, or 21 cents a share, contrasting with a $1.8 billion profit, or 45 cents a share, in the prior-year period. The auto maker’s sales were $39.4 billion, compared with $35.7 billion in the quarter last year.

    Adjusted for gains and losses on pensions, investments and costs related to things like staff and dealerships, Ford earned 30 cents a share, compared with 51 cents a year ago.

    Analysts polled by FactSet expected adjusted earnings of 27 cents a share, on sales of $37.46 billion.

    Executives said they expected full-year earnings before interest and taxes to be about $11.5 billion. In September, the company said it expected that figure to land within a range of $11.5 billion to $12.5 billion.

    Ford also raised its full-year outlook for adjusted free-cash flow to $9.5 billion to $10 billion. It ended the third quarter with operating cash flow of $3.8 billion, and adjusted free-cash flow of $3.6 billion.

    Shares fell 1% after hours.

    Ford in September warned that tighter supplies of auto parts would leave it with 40,000 to 45,000 unfinished vehicles sitting in its inventories at the end of the third quarter, with “inflation-related supplier costs” running about $1 billion higher than expected. But the company, at that time, stuck with its full-year adjusted-profit outlook.

    Ford, as with other auto makers, is putting more effort behind developing electric cars and trucks, including an electric version of its popular F-150. But it is laying off thousands as part of a split into two businesses — one devoted to electric vehicles, called Ford Model e, and one devoted internal combustion engines, called Ford Blue.

    A day earlier, rival General Motors Co. noted signs of its supply chains loosening up.

    On Tuesday, executives at General Motors
    GM,
    +2.30%

    noted easing in its supply chain and production improvements despite a difficult economic backdrop. GM stuck with its full-year outlook, cited strong demand, and said the company had landed some supply agreements and was working with chip makers to loosen up the flow of car parts and components.

    Shares of GM fell 0.2% on Wednesday.

    The auto market has been roiled by a semiconductor shortage that gummed up production and drove up the price of new cars, and then used ones, as new vehicles got too expensive for buyers. Used car prices have trended lower since. UBS analysts have said that an auto undersupply could balloon into an oversupply, as higher prices threaten to suppress consumer shopping and raise concerns of a recession.

    Edmunds last month said it expected new-vehicle sales in the U.S. to fall 0.9% in the third quarter when compared with the period in 2021. The auto-data provider said auto inventories have expanded, as chip supply chains open up.

    Ford stock is down 38% so far this year. By comparison, the S&P 500 index
    SPX,
    -0.74%

    is down 20% over that time.

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