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Tag: General Electric Co

  • GE's stock has its best year on record ahead of final breakup

    GE's stock has its best year on record ahead of final breakup

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    General Electric Co. has saved its best year for its last.

    At the beginning of the second quarter, GE’s power and renewable-energy business will be spun off as GE Vernova, while its remaining business will be relaunched as GE Aerospace. That follows the conglomerate’s separation of GE HealthCare Technologies Inc.
    GEHC,
    -0.28%

    in December 2022.

    But rather than mourn the final breakup of the 150-year old company, which was co-founded by Thomas Edison, Wall Street cheered like it never had before.

    GE’s stock
    GE,
    -0.54%

    has rocketed 95.1% in 2023 as of afternoon trading Friday. That would be by far the stock’s best year on record, based on available data going back to 1972, according to Dow Jones Market Data. The next best year was 1982, when it gained 65.4%. In comparison, the S&P 500 index
    SPX
    has rallied 24.2% this year.

    Read: GE stock sees biggest rally in more than 2 years after a big earnings beat, raised outlook.

    As good as the stock’s performance has been leading up to the breakup, most analysts feel like investors still have more to gain. Keep in mind that in many cases, a company’s parts are worth more individually than they are valued as part of a whole.

    Wells Fargo’s Matthew Akers has a pre-breakup target of $144 on GE’s stock, which implies about 13% upside from current levels.

    “GE combines an attractive business with high aftermarket mix, solid management team with a clean balance sheet, L-T margin upside and built-in catalyst with the Vernova spin in early Q2,” Akers wrote.

    J.P. Morgan’s Seth Seifman said he believes the combined equity values of GE Vernova and GE Aerospace, when including the company’s equity stake in GE HealthCare, is about $149 billion. That compares with GE’s current market capitalization of about $139 billion.

    Of the 18 analysts surveyed by FactSet who cover GE, 12 are bullish and six are neutral, while there are no bears. And the average price target is $139.23, or about 9% above current levels.

    GE’s 2023 marks the culmination of a five-year turnaround for the stock engineered by current Chief Executive Larry Culp, who will remain as CEO of GE Aerospace.

    GE’s stock has nearly tripled in the five years that Larry Culp has been CEO, outperforming the S&P 500 by a wide margin.


    General Electric Co.

    The stock had suffered its worst year ever in 2018, plunging 56.6%, just after it had its fourth-worst year in 2017, when it suffered a 44.8% decline.

    Things got so bad for GE that it got booted from the Dow Jones Industrial Average
    DJIA
    in June 2018, ending a record 111-year run in the blue-chip barometer.

    Culp was named CEO in October 2018. During his tenure, GE’s stock has had only two down years. It fell 3.2% in 2020 as the COVID-19 pandemic wreaked havoc on the aerospace business, and slumped 11.3% in 2022 as spiking inflation and interest rates fueled fears that a recession was on the horizon.

    But since the end of 2018, GE’s stock has climbed 181%, while the S&P 500 has rallied 90% and the Dow has gained 61%.

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  • Check out the giant ship critical to building the world’s biggest offshore wind farm

    Check out the giant ship critical to building the world’s biggest offshore wind farm

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    The Jan De Nul Group’s Voltaire in waters off China in Dec. 2022. As wind turbines get bigger, the vessels that install them are having to change, too.

    VCG | Visual China Group | Getty Images

    A project to build a facility described as “the world’s largest offshore wind farm” took a big step forward this month by producing its first power.

    Located in the North Sea, over 130 kilometers off England’s northeast coast, the Dogger Bank Wind Farm still has some way to go before it’s fully operational, but the installation and powering up of its first turbine is a major feat in itself.

    That’s because GE Vernova’s Haliade-X turbines stand 260 meters tall — that’s higher than San Francisco’s Golden Gate Bridge — and have blades measuring 107 meters.

    Turbine installation at Dogger Bank has required a huge amount of planning and preparation, with the Voltaire — a specialist vessel designed and built by the family-owned Jan De Nul Group — playing a key role.

    With a lifting capacity of 3,200 metric tons, the Voltaire — named after the 18th-century French philosopher — will have installed a total of 277 Haliade-X turbines when its work is complete.

    This image, from Dec. 2022, shows Jan De Nul Group’s Voltaire in China. A specialist installation vessel, the Voltaire has a lifting capacity of over 3,000 metric tons.

    VCG | Visual China Group | Getty Images

    Described by Dogger Bank as the “largest offshore jack-up installation vessel ever built,” in many ways, it’s the pinnacle of an extensive supply chain involving numerous businesses and stakeholders.

    The logistics are complex and multi-layered, with water depth a particular issue.

    The sea in the Dogger Bank Offshore Development Zone is up to 63 meters deep, meaning the Voltaire’s ability to work in deeper waters is crucial. 

    This is where its four legs come into play.

    According to Jan De Nul, the legs of the Voltaire — which was built at the COSCO Shipping Shipyard in China — enable it to lift itself above the water’s surface.

    With each leg measuring roughly 130 meters in length, they highlight the scale of equipment required to install huge offshore wind turbines like GE’s Haliade-X.

    In an online Q&A before installations at Dogger Bank began, Jan De Nul’s Rutger Standaert spoke of their importance. “Thanks to those legs, the Voltaire can effectively operate at a water depth of 80 meters,” Standaert, who is manager of vessel construction at the business, said.

    He noted that the Voltaire’s capabilities would enable installations further out to sea, allowing it to play a key role in the emerging floating offshore wind sector.

    “Off the Scottish coast, for example, expensive floating windfarms are often the only way to tap into offshore wind,” he said. “The water is too deep for fixed windfarms, but the Voltaire can offer new opportunities.”

    Thinking big

    Once completed, the Dogger Bank Wind Farm will have a total capacity of 3.6 gigawatts (GW) and be able to power as many as six million homes per year, according to its developers.

    Work on the project is taking place over three phases: Dogger Bank A, B, and C. A fourth phase of the wind farm known as Dogger Bank D has also been proposed, and would increase its capacity even further.

    Read more about electric vehicles, batteries and chips from CNBC Pro

    Søren Lassen is head of offshore wind research at Wood Mackenzie, a research and consultancy group. He described Dogger Bank as “a huge project, especially if you combine the three phases.”

    “It is a project that requires a lot of preparation,” he told CNBC. “There’s the logistics in terms of having the vessels to do the installation … and then of course, you also have the logistics in terms of getting the components to the marshaling port.”

    Both of these aspects were being made “a lot more complicated” by the use of next-generation turbines and a next-generation installation vessel, Lassen said.

    “You have … a lot of innovation that goes into this. And not only do you need a new vessel or new components, you also need new factories to build those components.”

    As such, a slew of upgrades and adjustments were needed to “reverberate throughout the entire value chain” for operations to run smoothly, he added.

    Bigger turbines, bigger challenges?

    This image, from June 2023, shows tower sections of GE’s Haliade-X wind turbine at a site in the U.S.

    David L. Ryan | The Boston Globe | Getty Images

    Thanks to their sheer size, larger turbine designs have created a specific set of needs for the offshore wind sector and sites like the Dogger Bank Wind Farm.

    “From cranes to vessels, we use a number of specially designed pieces of equipment to transport the Haliade-X turbines that will be used in this project,” a spokesperson for GE Offshore Wind said in a statement sent to CNBC.

    Wood Mackenzie’s Lassen stressed the importance of having dedicated transportation vessels, noting that the towers of turbines need to be broken into three or four sections in order to fit on board.  

    Massive blades represent the biggest challenge, he said, as they have to be laid flat. “And that just means that you need a very, very long transportation vessel, [and] that you need to stack them up accordingly.”

    Blades of the Haliade-X turbine stacked on top of each other at a site in the U.S. The past few years have seen companies develop increasingly large wind turbines.

    David L. Ryan | The Boston Globe | Getty Images

    Meanwhile, delays or bottlenecks can have far-reaching — and expensive — consequences.

    Lassen cited the example of blades not being delivered on time, which leads to vessels having to “go away and then come back half a year later to do the installation. This is very costly, of course.”

    And delays also lead to lost revenue.

    “These projects are going out [and] generating a lot of power from the day that they’re being installed, pretty much,” Lassen added.

    “So any delays [and] you’re also losing a lot of revenue, especially right now when the power prices are really, really high.”

    The bigger picture

    Offshore wind farms are set to play a significant role in reducing emissions and hitting net zero goals in the years ahead — but a supply chain that’s well-run and reliable will be key to the industry’s success.

    This is set to cost serious money. According to Wood Mackenzie, a base case of 30 GW of installations per year by 2030 — excluding China — will require investment of around $27 billion by 2026 to build out supply chains.

    “The supply chain needs to invest,” Lassen said, adding that it also needed capital, certainty and concrete, firm orders. However, cost pressures mean there is currently uncertainty over projects planned for 2025, 2026 and 2027.

    “Any delays to these projects takes away volume from the supply chain, and the supply chain needs that volume to convert it into revenue to build new factories,” Lassen explained.

    It is crucial that projects planned for the next few years go ahead, he added. “That helps the underlying supply chain ramp up so they can build the capacity [for] ’27, ’28, ’29 and well into the 2030s as well.”

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  • J&J’s Kenvue Deal Could Be Too Popular. What Happens if It Is.

    J&J’s Kenvue Deal Could Be Too Popular. What Happens if It Is.

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    Johnson and Johnson


    $40 billion exchange offer for shares in


    Kenvue


    is likely to generate strong interest from the healthcare company’s shareholders, resulting in participants being able to swap only a portion of their J&J stock. 

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  • Stocks making the biggest moves before the bell: General Motors, 3M, Spotify, Verizon and more

    Stocks making the biggest moves before the bell: General Motors, 3M, Spotify, Verizon and more

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    Maplewood, Minnesota, 3M company global headquarters. 

    Michael Siluk | Universal Images Group | Getty Images

    Check out the companies making headlines in premarket trading.

    General Motors — Shares of General Motors rose more than 1% after the automaker raised its full-year guidance and reported second-quarter results that rose on a year-over-year basis.

    related investing news

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    3M – Shares of the chemical manufacturer rose about 2% in premarket trading following the company’s latest earnings report. 3M posted $7.99 billion in revenue, beating analysts’ estimates of $7.87 billion, according to Refinitiv. The company also raised its full-year earnings guidance and reaffirmed its revenue guidance.

    Xerox — The workplace technology provider advanced 3.6% after beating earnings expectations for the second quarter, posting 44 cents per share excluding items against a 32-cent forecast from analysts polled by FactSet. Quarterly revenue came in line with expectations at $1.75 billion. Xerox also said to expect free cash flow and the adjusted operating margin to be better than previously anticipated for the full year.

    General Electric — Shares of the industrial giant jumped more than 4% in premarket trading after the company posted stronger-than-expected earnings for the second quarter. GE also boosted its full-year profit guidance on the back of strong demand from aerospace and record orders in its renewable energy business.

    Danaher — Shares of the conglomerate slid 4.6%. Danaher said non-GAAP core revenue in the base business will be down in the current quarter compared with the same quarter a year ago and would be up less than previously expected for the full year. However, the company gave a strong quarterly report, posting second quarter earnings per share excluding items at $2.05 and revenue at $7.16 billion, while analysts polled by FactSet anticipated $2.01 per share on $7.12 billion in revenue.

    Spotify — The music streaming platform dropped 6.1% after presenting a weak quarterly report and guidance. Spotify reported revenue of €3.18 billion, below a Refinitiv forecast of €3.21 billion. Full-year revenue guidance was also worse than analysts expected. The report follows Spotify’s announcement that it will raise prices for premium subscription plans.

    Lilium — The electric helicopter stock added 5.6% after management released a letter to shareholders. In the letter, management said adjusted cash spend for the first half of 2023 was within budget and the company was successful in an audit from the European Union Aviation Safety Agency.

    Alaska Air — Shares of the airline fell more than 4% even after Alaska beat estimates on the top and bottom lines for the second quarter. Alaska reported $3 in adjusted earnings per share on $2.84 billion in revenue. Analysts surveyed by Refinitiv were expecting $2.70 in earnings per share on $2.77 billion in revenue. The airline’s full-year earnings guidance of $5.50 to $7.50 per share was roughly in-line with the average analyst estimates of $6.65, according to FactSet.

    RTX — Shares of the company formerly known as Raytheon slipped 3% despite a strong quarterly report. RTX ported $1.29 in earnings per share, excluding items, on $18.32 billion in revenue. Analysts polled by Refinitiv forecasted $1.18 per share and $17.68 billion. The company also raised its full-year expectations for both lines.

    Verizon — The telecommunications giant traded 2.6% higher after reaffirming its full-year guidance. That came despite a mixed second quarter, with Verizon posting $1.21 in earnings per share, excluding items, on $32.6 billion in revenue. Analysts polled by Refinitiv estimated $1.17 earnings per share and revenue of $33.24 billion.

    Walmart — Walmart rose more than 1% after Piper Sandler upgraded the big-box retailer Monday to overweight from neutral, and hiked its price target. Analyst Edward Yruma said Walmart could take greater market share in the grocery business as inflation eases.

    — CNBC’s Samantha Subin, Yun Li, Jesse Pound, Sarah Min and Tanaya Macheel contributed reporting

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  • Want a climate-friendly flight? It’s going to take a while and cost you more

    Want a climate-friendly flight? It’s going to take a while and cost you more

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    When it comes to flying, going green may cost you more. And it’s going to take a while for the strategy to take off.

    Sustainability was a hot topic this week at the Paris Air Show, the world’s largest event for the aviation industry, which faces increasing pressure to reduce the climate-changing greenhouse gases that aircraft spew.

    Even the massive orders at the show got a emissions-reduction spin: Airlines and manufacturers said the new planes will be more fuel-efficient than the ones they replace.

    Inflation is pushing in different directions in Europe, rising in Germany and falling again in Spain.

    Halfway into 2023, and so little on Wall Street has gone according to plan. The S&P 500 has climbed roughly 14% as one of the most-predicted and longest awaited recessions in history has yet to appear.

    Royal accounts show that a change in monarchs, double-digit inflation and ongoing costs of renovating Buckingham Palace contributed to a 5% increase in publicly-funded spending by Britain’s royals.

    Applications for unemployment benefits fell significantly last week after it appeared claims had reached a modestly elevated level in recent weeks.

    But most of those planes will burn conventional, kerosene-based jet fuel. Startups are working feverishly on electric-powered aircraft, but they won’t catch on as quickly as electric vehicles.

    “It’s a lot easier to pack a heavy battery into a vehicle if you don’t have to lift it off the ground,” said Gernot Wagner, a climate economist at Columbia University.

    That means sustainable aviation fuel has become the industry’s best hope to achieve its promise of net zero emissions by 2050. Aviation produces 2% to 3% of worldwide carbon emissions, but its share is expected to grow as travel increases and other industries become greener.

    Sustainable fuel, however, accounts for just 0.1% of all jet fuel. Made from sources like used cooking oil and plant waste, SAF can be blended with conventional jet fuel but costs much more.

    Suppliers are “going to be able to kind of set the price,” Molly Wilkinson, an American Airlines vice president, said at the air show. “And we fear that at that point, that price eventually is going to trickle down to the passenger in some form of a ticket price.”

    With such a limited supply, critics say airlines are making overly ambitious promises and exaggerating how quickly they can ramp up the use of SAF. The industry even has skeptics: Nearly one-third of aviation sustainability officers in a GE Aerospace survey doubt the industry will hit its net zero goal by 2050.

    Delta Air Lines is being sued in U.S. federal court by critics who say the carrier falsely bills itself as the world’s first carbon-neutral airline, and that Delta’s claim rests on carbon offsets that are largely bogus. The Atlanta-based airline says the charges are “without legal merit.”

    Across the Atlantic, a consumer group known by its French acronym, BEUC, filed a complaint this week with the European Union’s executive arm, accusing 17 airlines of greenwashing.

    The group says airlines are misleading consumers and violating rules on unfair commercial practices by encouraging customers to pay extra to help finance development of SAF and offset future carbon emissions created by flying.

    In one case, the group’s researchers found Air France charging up to 138 euros ($150) for the green option.

    “Sustainable aviation fuels, they are indeed the biggest technological potential to decarbonize the aviation sector, but the main problem … is that they are not available,” said Dimitri Vergne, a senior policy officer at BEUC.

    “We know that before the end of the next decade — at least — they won’t be available in massive quantities” and won’t be the main source of fuel for planes, Vergne added.

    Producers say SAF reduces greenhouse gas emissions by up to 80%, compared with regular jet fuel, over its life cycle.

    Airlines have been talking about becoming greener for years. They were rattled by the rise of “flight shaming,” a movement that encourages people to find less-polluting forms of transportation — or reduce travel altogether.

    The issue gained urgency this year when European Union negotiators agreed on new rules requiring airlines to use more sustainable fuel starting in 2025 and rising sharply in later years.

    The United States is pushing incentives instead of mandates.

    A law signed last year by President Joe Biden will provide tax breaks for developing cleaner jet fuel, but one of the credits will expire in just two years. Wilkinson, the American Airlines executive, said that was too short to entice sustainable fuel producers and that the credit should be extended by 10 years or longer.

    The International Air Transport Association, an airline trade group, estimates that SAF could contribute 65% of the emissions reductions needed for the industry to hit its 2050 net-zero goal.

    But very few flights are powered by SAF because of the limited supply and infrastructure.

    Just before the Paris Air Show opened, President Emmanuel Macron announced that France would contribute 200 million euros ($218 million) toward a 1 billion euro ($1.1 billion) plant to make SAF.

    Many airlines have touted investments in SAF producers such as World Energy, which has a plant in Paramount, California, and Finland’s Neste.

    United Airlines plans to triple its use of SAF this year, to 10 million gallons — but it burned 3.6 billion gallons of fuel last year.

    Some see sustainable fuel as a bridge to cleaner technologies, including larger electric planes or aircraft powered by hydrogen. But packing enough power to run a large electric plane would require a fantastic leap in battery technology.

    Hydrogen must be chilled and stored somewhere — it couldn’t be carried in the wings of today’s planes, as jet fuel is.

    “Hydrogen sounds like a good idea. The problem is the more you look into the details, the more you realize it’s an engineering challenge but also an economics challenge,” Richard Aboulafia of AeroDynamic Advisory, an aerospace consultancy, said at the Paris Air Show. “It’s within the realm of possibility, (but) not for the next few decades.”

    ___

    This story has been corrected to note that Wagner is at Columbia University, not New York University.

    Koenig reported from Dallas. AP journalists Jade Le Deley and Tristan Werkmeister in Le Bourget, France, and Kelvin Chan in Toronto contributed.

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  • A U.S. tech downturn offers India ‘a bigger opportunity,’ says Infosys founder

    A U.S. tech downturn offers India ‘a bigger opportunity,’ says Infosys founder

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    Infosys founder Narayana Murthy sees tech layoffs in the U.S. as an opportunity for India.

    “I look at these things [such as tech layoffs] as part of a business cycle. The curve goes up and down, up and down. So I would not be that much worried,” Murthy told The CNBC Conversation.

    While India’s domestic IT companies worry that a slowdown in the U.S. economy could lead to American firm cutting back on tech spending and projects in India, Murthy said Indian IT firms stand to gain instead.

    “Whenever there is a downturn in the U.S. or in the developed world, there is a bigger opportunity for countries like India, particularly in my sector, which provide better value for money,” Murthy told CNBC’s Tanvir Gill.

    “In a downturn, the market shrinks a little bit and our charter is very clear. We work even harder and then we take a slightly larger market share and you will not have any issue of job losses,” said Murthy.

    Read more about tech and crypto from CNBC Pro

    Sometimes described as the father of India’s IT sector, Murthy — with his six friends — founded Infosys in 1981. He served as CEO from 1981 to 2002.

    Funded with an initial investment of $250 from Murthy’s wife, Infosys has grown into a multibillion dollar company valued at over $60 billion.

    India’s second-largest IT company hires more than 346,000 workers across the world from Asia-Pacific to North America to Europe and the Middle East.

    Many companies opt to outsource software development to India for quality at lower costs, said Krina Mehta, co-founder of U.S.-based offshore software development company Fortune Infosys, in a LinkedIn post.

    “By working with [Indian developers], you will have the access to high-quality IT professionals for quite reasonable cost compared to the prices you will have to pay in the West,” said Mehta.

    There are other American and European companies coming. So I suppose our opportunity will come in the coming years.

    Narayana Murthy

    Founder, Infosys

    Mehta said India has a talent pool filled with skilled software developers who developed a wide range of tech specializations from relevant and core technologies like Python programing to newer enterprise technologies like .NET Core.

    According to custom software development company Peerbits, companies can save 20% to 30% in tech spending by offshoring their custom software development needs to India.

    “The lesson for the U.S. corporations is to ensure that they improve their productivity, reduce their cost automatically even without depending on countries like India, China, etc. I think that is the way to move forward,” said Murthy.

    Opportunities ahead

    How N.R. Narayana Murthy founded Infosys

    Murthy said many American companies like General Electric and Microsoft have set up research and development centers in India.

    “There are other American and European companies coming. So I suppose our opportunity will come in the coming years,” said Murthy.

    “The Indian leadership under the prime minister Shri Narendra Modi has put in a lot of initiatives like ‘Startup India’ to make sure that the country becomes a source of innovation,” said Murthy.

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  • First Republic’s ‘miserable moment’ is different from the 2008 contagion, Jim Cramer says

    First Republic’s ‘miserable moment’ is different from the 2008 contagion, Jim Cramer says

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    First Republic Bank‘s shaky deposit footing and dismal earnings report won’t trigger the chain reaction that investors fear, Jim Cramer said on Tuesday, but could still drag on the market. 

    Unlike other bank failures, including Silicon Valley Bank’s recent collapse, First Republic’s troubles have largely stemmed from its inability to save itself, even with a multi-billion dollar lifeline from other major banks, he explained. 

    “There’s one big difference between now and 2008: This time there is no systemic contagion,” Cramer said. “It’s a miserable moment for First Republic — once a bank beloved by the rich and famous — but it’s an all-clear event for everyone else.” 

    Outside of First Republic, which saw its stock tumble over 49% on Tuesday, there were some other big losers on the day. UPS dropped nearly 10% on a disappointing earnings report, while life science and medical diagnostics company Danaher fell 8% and hit a 52-week low.

    But there were plenty of winners Tuesday. PepsiCo boosted its outlook for the year and hit a new 52-week high. General Electric also beat on the top and bottom lines, while McDonald’s hit a new 52-week high

    After the close, Chipotle beat estimates while tech giants Microsoft and Alphabet also exceeded analysts’ expectations

    “While all three stocks jumped in after-hours trading, it might not matter, though, to tomorrow’s action, given the obsessive focus on this broken, darn bank,” Cramer said.

    In response, a First Republic spokesperson told CNBC: “We remain fully committed to serving our communities, and we are grateful for the ongoing support of our clients and colleagues. Despite the uncertainty of the past two months, and while average account sizes have decreased, we have retained over 97% of client relationships that banked with us at the start of the first quarter.”

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    Cramer: There's nothing like a banking crisis to bring this market to its knees

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  • What to watch for in the markets in the week ahead: Monster tech earnings, then sell in May?

    What to watch for in the markets in the week ahead: Monster tech earnings, then sell in May?

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  • U.S. stocks close lower Friday, but Dow books longest weekly win streak since October after bank earnings, retail sales and Fed comments

    U.S. stocks close lower Friday, but Dow books longest weekly win streak since October after bank earnings, retail sales and Fed comments

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    U.S. stocks closed lower Friday as investors digested strong big bank earnings, weak retail sales, and hawkish comments from a Federal Reserve official, but all three major benchmarks booked weekly gains.

    How did stocks trade?
    • The Dow Jones Industrial Average
      DJIA,
      -0.42%

      shed 143.22 points, or 0.4%, to close at 33,886.47.

    • The S&P 500
      SPX,
      -0.21%

      fell 8.58 points, or 0.2%, to finish at 4,137.64.

    • Nasdaq Composite
      COMP,
      -0.35%

      declined 42.81 points, or 0.4%, to end at 12,123.47.

    For the week, Dow rose 1.2%, the S&P 500 gained 0.8% and the technology-heavy Nasdaq Composite edged up 0.3%. The Dow booked a fourth straight week of gains in its longest win streak since October, according to Dow Jones Market Data.

    What drove the market?

    U.S. stocks ended modestly lower Friday, as investors digested retail sales data showing spending deteriorated again last month as well as Federal Reserve Governor Christopher Waller’s remarks that the Fed needs to keep hiking interest rates because inflation is still much too high.

    “Because financial conditions have not significantly tightened, the labor market continues to be strong and quite tight, and inflation is far above target, so monetary policy needs to be tightened further,” Waller said Friday during a speech in San Antonio, Texas.

    Waller’s comments were “pretty hawkish,” said Jackie Rogowicz, an investment analyst at Penn Mutual Asset Management, in a phone interview. She said she’s expecting the Fed to raise its benchmark interest rate by a quarter percentage point in May, and at least at this stage, sees some potential for another rate hike in June.

    Inflation data released earlier in the week showed a larger-than-expected slowdown in wholesale prices, while so-called core consumer-price inflation remained stubbornly high as it ticked higher to a rate of 5.6% year-over-year.

    Read: This ETF designed to protect against inflation is attracting inflows as price pressures persist

    Marvin Loh, senior global strategist at State Street, said Waller’s comments were a departure from the more dovish tone evinced by other senior Fed officials since the Fed’s March policy meeting.

    “This is one of the more hawkish comments over the past week. A lot of the Fed speak has leaned toward ‘one and done’ in terms of rate hikes,” Loh said during a phone call with MarketWatch.

    Investors also digested commentary Friday from Chicago Fed President Austan Goolsbee, who said the U.S. economy could slip into recession. His remarks echoed Fed staff concerns expressed in the central bank’s March meeting minutes released on Wednesday.

    Meanwhile, fresh economic data on Friday showed sales at retailers, a critical component of consumer spending, dropped 1% in March, declining for the fourth time in the past five months. The decline was sharper than the contraction that economists polled by the Wall Street Journal had anticipated.

    A popular consumer-sentiment survey released Friday showed respondents’ outlook has risen slightly to 63.5 in April, rebounding from a four-month low, but also reflected slightly higher anxiety about inflation.

    While consumer spending hasn’t fallen off a cliff, it has continued to weaken from the elevated levels seen in the aftermath of the COVID-19 pandemic, economists said.

    “The cumulative effect of historically high inflation, rising interest rates, and reduced access to credit is already taking a toll on consumers’ ability and willingness to spend,” said Lydia Boussour, senior economist at EY Parthenon, in emailed commentary. “And the full effect of recent banking-sector turmoil and the associated tightening in credit conditions has yet to be felt.”

    The first bank earnings reports since regional banks including Silicon Valley Bank failed last month offered some optimism though. Shares of JPMorgan Chase & Co.
    JPM,
    +7.55%
    ,
    the U.S.’s biggest bank, jumped after it reported earnings and revenue well above forecasts.

    JPMorgan CEO Jamie Dimon said the U.S. economy looked “generally healthy,” but warned the coast was not completely clear. “The storm clouds that we have been monitoring for the past year remain on the horizon, and the banking industry turmoil adds to these risks,” he said.

    Need to Know: Bank earnings season is here. This popular value fund just bought Kroger and a regional lender.

    Wells Fargo & Co.
    WFC,
    -0.05%

    and Citigroup Inc.
    C,
    +4.78%

    also beat forecasts for profits and revenue, while Pittsburgh lender PNC Financial Services Group Inc.
    PNC,
    +0.36%

    reported higher earnings and deposits. BlackRock Inc.
    BLK,
    +3.07%
    ,
    meanwhile, reported a decline in profit as assets under management fell 5%, although its shares ended higher.

    The “big banks are well-capitalized,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial in a phone interview. “They benefited from some deposit inflows in March.”

    Investors have been anxious to see how the banks would perform as analysts have been cutting earnings estimates for both large and regional banks in the wake of the crisis.

    “So far it seems the numbers are coming in pretty good,” said State Street’s Loh. However, “we have to wait for more smaller lenders to start reporting” to get a better picture of how banks are doing in the wake of last month’s turmoil.

    Companies in focus

    —Barbara Kollmeyer contributed to this report.

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  • U.S. stocks close sharply higher in year-end rally after jobless claims data deemed ‘welcome news for the Fed’

    U.S. stocks close sharply higher in year-end rally after jobless claims data deemed ‘welcome news for the Fed’

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    U.S. stock indexes finished sharply higher on Thursday, the second-to-last trading session of the year, with the Nasdaq Composite jumping 2.6%, erasing losses from earlier in the week.

    The three main indexes built on premarket gains after U.S. weekly jobless claims data showed the number of workers receiving benefits has climbed to the highest level since February, a tentative sign that the Federal Reserve’s interest-rate hikes might be slowing economic growth and inflation.

    How stocks traded
    • The S&P 500
      SPX,
      +1.75%

      rose 66.06 points, or 1.8%, to end at 3,849.28.

    • Dow Jones Industrial Average
      DJIA,
      +1.05%

      added 345.09 points, or 1.1%, finishing at 33,220.80.

    • Nasdaq Composite
      COMP,
      +2.59%

      climbed 264.80 points, or 2.6%, to finish at 10,478.09.

    On Wednesday, the Nasdaq Composite dropped 1.4% to 10,213, its lowest closing level of the year. The S&P 500 is up more than 6% from its 2022 low from mid-October, but the large-cap index remains down 19.2% year-to-date, FactSet data show.

    What drove markets

    The penultimate session of 2022 showed tentative signs of delivering some much needed festive cheer for the stock market as a hope for “Santa Claus rally” had earlier failed to materialize.

    MarketWatch Live: Is that you, Santa Claus?

    Stocks advanced on Thursday as data showed the number of Americans receiving more than a single week of unemployment benefits had climbed by 41,000 last week to 1.71 million, the highest level in 10 months.

    The jobless-claims data “points to a loosening in the labor market, which is welcome news for the Fed,” said Larry Adam, chief investment officer at Raymond James, in a tweet.

    However, analysts at Citi still think the claims data indicates a still-very-tight labor markets compared to historical levels.

    “While both initial and continuing claims increased this week, they remain within the levels of late 2019,” wrote Gisela Hoxha, U.S. economics research analyst at Citi. “Anecdotes of company layoffs have increased in recent months, particularly in the tech sector. While it could be hard to disentangle the seasonal effects from the announced layoffs, in our view there is no significant evidence of them showing up in the claims data yet.”

    Some of those layoffs could be taking effect a couple months later as employees might be kept on payroll for some time after the announcement, which will become significant signs of weakness in the labor market in 2023, Hoxha added.

    See: Did 2022 break Wall Street’s ‘fear gauge’? Why the VIX no longer reflects the sorry state of the stock market

    Stocks were on track to finish what’s set to be the worst year since 2008 not far from 2022 lows. The S&P 500’s 52-week closing low at 3,577.03 was hit on Oct. 12.

    Still, the three indexes managed to erase losses from earlier in the week on Thursday. Nasdaq Composite was down 0.2% this week, while the S&P 500 gained 0.1% and the Dow was nearly flat as of Thursday’s close. If the S&P 500 can hold on to weekly gains through Friday, it would mark the end of a three-week losing streak that has been the index’s longest since September, FactSet data show.

    Companies in focus
    • Tesla Inc.
      TSLA,
      +8.08%

      shares finished 8.1% higher on Thursday after posting its first rise in eight sessions Wednesday. The electric-vehicle maker’s shares had declined in seven consecutive sessions, their worst losing streak since a seven-session run that ended on Sept. 15, 2018.

    • Southwest Airlines 
      LUV,
      +3.70%

      remains in focus as the airline tries to recover from logistical issues that caused thousands of flight cancellations over the past week. The stock fell 11% over the past two days, but rose 3.7% in Thursday session.

    • General Electric’s 
      GE,
      +2.17%

      spinoff of GE HealthCare Technologies will join the S&P 500 index when it begins trading as a separate public company on Jan. 4. GE HealthCare will replace Vornado Realty Trust 
      VNO,
      +1.63%
      ,
      which will move to the S&P MidCap 400. Vornado will replace logistics company RXO
      RXO,
      +8.39%
      ,
      which will move to the S&P SmallCap 600. GE HealthCare — trading on a when-issued basis — rose 0.9%, while Vornado gained 1.6% and RXO jumped 8.4%.

    • Cal-Maine 
      CALM,
      -14.50%

      shares ended 14.5% lower after its quarterly earnings came in below Wall Street forecasts. Cal-Maine reported record sales for the quarter as an avian flu outbreak continued to limit the supply of eggs, driving prices sharply higher. The company also said there were no positive tests for avian flu at any of its production facilities, as of Wednesday.

    — Jamie Chisholm contributed to this article

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  • Stocks making the biggest moves midday: Netflix, Cal-Maine Foods, Southwest and more

    Stocks making the biggest moves midday: Netflix, Cal-Maine Foods, Southwest and more

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    In this photo illustration the Netflix logo seen displayed on a smartphone screen, with graphic representation of the stock market in the background.

    Sopa Images | Lightrocket | Getty Images

    Check out the companies making headlines in midday trading.

    Netflix — The streaming giant gained 6.3% following a double upgrade to buy from sell by CFRA. The firm said it would be difficult for competitors to catch up with the company.

    Cal-Maine Foods — Cal-Maine shares shed 15% after reporting earnings that fell short of Wall Street’s expectations even as the egg producer reported record sales. The company said the avian flu outbreak limited supply and pushed prices up.

    Southwest Airlines —  The airline stock rose more than 3%, paring back losses from the previous session when it dropped more than 5%. Severe disruptions at Southwest Airlines have drawn outsized criticism from frustrated travelers, who have dealt with thousands of canceled flights from airlines this week because of winter weather. Southwest Airlines canceled another 60% of its flights on Wednesday. According to The Dallas Morning News, it’s expected to restore its full schedule on Friday.

    Lockheed Martin — The defense contractor’s stock rose nearly 1% following news that its Sikorsky unit is contesting a U.S. Army helicopter contract awarded to Textron. It said proposals for the $1.3 billion contract were not evaluated fairly. Textron shares were last up 1.9%.

    Tesla — Tesla shares gained more than 7% after selling off during the previous sessions and 37% this month. The stock’s headed for one of its worst months, quarters and years ever.

    Apple — The iPhone maker’s stock rose more than 3% after hitting its lowest level since June 2021 earlier in the week.

    General Electric — Shares rose 1.7% amid news that General Electric’s health-care spinoff will join the S&P 500 when it starts trading separately on Jan. 4. GE Healthcare will replace Vornado Realty Trust, set to join the S&P MidCap 400.

    ImmunoGen — Shares added 6.2% after the biotechnology company announced CFO Susan Altschuller would not return from her time off. Renee Lentini, the vice president and chief accounting officer, was named interim CFO. The stock initially dropped in premarket trading.

    TG Therapeutics — The biopharmaceutical stock soared more than 29% on news that the U.S. Food and Drug Administration approved its drug to treat relapsing forms of multiple sclerosis. The drug, known as Briumvi, is expected to roll out during the first quarter of 2023.

    — CNBC’s Alex Harring and Sarah Min contributed reporting

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  • U.S. stocks close sharply higher in year-end rally after jobless claims data deemed ‘welcome news for the Fed’

    U.S. stocks close sharply higher in year-end rally after jobless claims data deemed ‘welcome news for the Fed’

    [ad_1]

    U.S. stock indexes finished sharply higher on Thursday, the second-to-last trading session of the year, with the Nasdaq Composite jumping 2.6%, erasing losses from earlier in the week.

    The three main indexes built on premarket gains after U.S. weekly jobless claims data showed the number of workers receiving benefits has climbed to the highest level since February, a tentative sign that the Federal Reserve’s interest-rate hikes might be slowing economic growth and inflation.

    How stocks traded
    • The S&P 500
      SPX,
      +1.75%

      rose 66.06 points, or 1.8%, to end at 3,849.28.

    • Dow Jones Industrial Average
      DJIA,
      +1.05%

      added 345.09 points, or 1.1%, finishing at 33,220.80.

    • Nasdaq Composite
      COMP,
      +2.59%

      climbed 264.80 points, or 2.6%, to finish at 10,478.09.

    On Wednesday, the Nasdaq Composite dropped 1.4% to 10,213, its lowest closing level of the year. The S&P 500 is up more than 6% from its 2022 low from mid-October, but the large-cap index remains down 19.2% year-to-date, FactSet data show.

    What drove markets

    The penultimate session of 2022 showed tentative signs of delivering some much needed festive cheer for the stock market as a hope for “Santa Claus rally” had earlier failed to materialize.

    MarketWatch Live: Is that you, Santa Claus?

    Stocks advanced on Thursday as data showed the number of Americans receiving more than a single week of unemployment benefits had climbed by 41,000 last week to 1.71 million, the highest level in 10 months.

    The jobless-claims data “points to a loosening in the labor market, which is welcome news for the Fed,” said Larry Adam, chief investment officer at Raymond James, in a tweet.

    However, analysts at Citi still think the claims data indicates a still-very-tight labor markets compared to historical levels.

    “While both initial and continuing claims increased this week, they remain within the levels of late 2019,” wrote Gisela Hoxha, U.S. economics research analyst at Citi. “Anecdotes of company layoffs have increased in recent months, particularly in the tech sector. While it could be hard to disentangle the seasonal effects from the announced layoffs, in our view there is no significant evidence of them showing up in the claims data yet.”

    Some of those layoffs could be taking effect a couple months later as employees might be kept on payroll for some time after the announcement, which will become significant signs of weakness in the labor market in 2023, Hoxha added.

    See: Did 2022 break Wall Street’s ‘fear gauge’? Why the VIX no longer reflects the sorry state of the stock market

    Stocks were on track to finish what’s set to be the worst year since 2008 not far from 2022 lows. The S&P 500’s 52-week closing low at 3,577.03 was hit on Oct. 12.

    Still, the three indexes managed to erase losses from earlier in the week on Thursday. Nasdaq Composite was down 0.2% this week, while the S&P 500 gained 0.1% and the Dow was nearly flat as of Thursday’s close. If the S&P 500 can hold on to weekly gains through Friday, it would mark the end of a three-week losing streak that has been the index’s longest since September, FactSet data show.

    Companies in focus
    • Tesla Inc.
      TSLA,
      +8.08%

      shares finished 8.1% higher on Thursday after posting its first rise in eight sessions Wednesday. The electric-vehicle maker’s shares had declined in seven consecutive sessions, their worst losing streak since a seven-session run that ended on Sept. 15, 2018.

    • Southwest Airlines 
      LUV,
      +3.70%

      remains in focus as the airline tries to recover from logistical issues that caused thousands of flight cancellations over the past week. The stock fell 11% over the past two days, but rose 3.7% in Thursday session.

    • General Electric’s 
      GE,
      +2.17%

      spinoff of GE HealthCare Technologies will join the S&P 500 index when it begins trading as a separate public company on Jan. 4. GE HealthCare will replace Vornado Realty Trust 
      VNO,
      +1.63%
      ,
      which will move to the S&P MidCap 400. Vornado will replace logistics company RXO
      RXO,
      +8.39%
      ,
      which will move to the S&P SmallCap 600. GE HealthCare — trading on a when-issued basis — rose 0.9%, while Vornado gained 1.6% and RXO jumped 8.4%.

    • Cal-Maine 
      CALM,
      -14.50%

      shares ended 14.5% lower after its quarterly earnings came in below Wall Street forecasts. Cal-Maine reported record sales for the quarter as an avian flu outbreak continued to limit the supply of eggs, driving prices sharply higher. The company also said there were no positive tests for avian flu at any of its production facilities, as of Wednesday.

    — Jamie Chisholm contributed to this article

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  • This week’s best-performing stocks include a popular sports apparel name and a drug maker

    This week’s best-performing stocks include a popular sports apparel name and a drug maker

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