Boeing (BA) has temporarily halted deliveries of and cut back on its production plans for its troubled 737 Max. But United Airlines expects to still take delivery of 21 of the planes this year.
After the US market close Tuesday, United parent United Continental (UAL) reported better than expected first quarter earnings, and it reaffirmed earlier profit guidance for the full year. Shares rose nearly 3% immediately after the report.
Executives are set to hold their conference call with analysts and investors on Wednesday morning.
The company said it expects to have a total of 30 Max jets in its fleet by year’s end. It is the first 737 Max customer among US airlines to report first quarter results.
United took delivery of four of those jets earlier this year, in addition to five it already head. Then Boeing grounded the planes on March 13 following the fatal crash of an Ethiopian Airlines 737 Max. It was the second fatal crash of the jet in less than five months, and investigators believe the problem could be an automatic safety feature that forced its nose down. Boeing is seeking a software fix to address the problem.
Health care companies looked anything but healthy Tuesday. The sector was the biggest drag on both the Dow and the S&P 500.
HCA Healthcare (HCA) fared the worst, dropping 10%. Cigna (CI) and Humana (HUM) both dropped more than 7%.
The sector-wide slump came after UnitedHealth CEO David Wichmann said “Medicare for All” policies, as proposed by some politicians and presumed candidates for the 2020 presidential election, would hurt the industry.
“The wholesale disruption of American health care being discussed in some of these proposals would surely jeopardize the relationship people have with their doctors, destabilize the nation’s health system, and limit the ability of clinicians to practice medicine at their best,” Wichmann said on his company’s earnings call.
UnitedHealth’s first quarter earnings beat Wall Street expectations. But those results still couldn’t stave off Tuesday’s losses. Like its peers, UnitedHealth (UNH) also fell — roughly 4%.
Stock markets ended Tuesday slightly higher, helped by a last minute rally from Qualcomm.
The Dow closed 0.3%, or 68 points higher, while the S&P 500 inched up 0.1%. The Nasdaq ended 0.3% higher.
Chip maker Qualcomm (QCOM) was the strongest gainer in the S&P, closing 23% higher after the company reached a settlement and license agreement with Apple (AAPL).
Health care stocks were among the biggest losers of the day. UnitedHealth (UNH), HCA Healthcare (HCA) and Cigna (CI) all finishing the day lower. HCA dropped the most — about 10%. Earlier in the day, UnitedHealth’s CEO told investors on an earnings call that the “Medicare for All” proposals being discussed by Congress could “destabilize the nation’s health system.”
Shares of Qualcomm (QCOM) jumped some 16% to its highest level since October in late Tuesday trading, after the chip maker and Apple (AAPL) said they had agreed to dismiss all litigation between one another.
The two tech giants reached a six-year license agreement, starting April 2019, with a two-year extension option. Apple is also due to pay Qualcomm an undisclosed amount.
Apple shares were up 0.3%
Gold prices dropped, as the resilient US dollar stayed strong.
“The reason we are not seeing any rally in the gold price is mainly due to the strength in the US economic data,” which in turn strengthens the greenback, wrote Naeem Aslam, chief market analyst at ThinkMarkets.
“This has two impacts: firstly, traders are more interested in pouring money in riskier assets. Finally, they do not believe that the Fed is going to maintain the same monetary policy stance which they currently hold.”
Gold futures hit their lowest level since January, settling at $1277 an ounce. Earlier in the trading session, futures dropped to their worst level since December. And that could mean that gold is headed even lower.
Nio (NIO), the troubled car company billed as China’s answer to Tesla, has hit an all-time low, according to our Paul R. La Monica:
Here’s the stock’s decline since it went public in September 2018:
BlackRock (BLK) CEO Larry Fink thinks US stocks, which are notably close to record highs, are more likely to rally further than to turn lower — even though many market watchers are worried about the next bubble.
“Despite where the markets are in equities, we have not seen money being put to work,” Fink said on CNBC this morning, adding he was still seeing outflows in stocks.
Just months ago, investors assumed that the Federal Reserve would raise interest rates further, which would have been great for fixed income securities but not so great for stocks. BlackRock itself recorded a record $32 billion inflow into its bond funds between January and March, according to its first quarter results.
But with the Fed taking its foot off the gas, the reverse should hold true, and stocks should get another boost as allocations catch up, according to Fink’s reasoning.
Stocks held their modest gains halfway through Tuesday’s trading day.
Johnson & Johnson (JNJ), the best performing stock in the Dow today, is up 1.9% after beating expectations for its first quarter results.
The Dow’s biggest loser? Shares of United Health Group (UNH), which also beat estimates and raised its 2019 forecast, are down 3.3%.
Insurance provider Progressive (PGR) led gainers in the S&P, climbing 6.6%, after reporting stronger-than-expected earnings.
The Nasdaq rose above 8,000 points for the first time in six months on Tuesday.
It was led higher by gains in technology and health care stocks.
At its high, the benchmark touched 8,018 points on Tuesday, its best level since October 2018. It hit its all-time intraday high of 8,133 in September.
US stocks kicked off Tuesday’s session off slightly higher as earnings remained in focus.
In notable corporate results of the day, Bank of America (BAC) beat earnings expectations for but reported flat revenues. Its shares were down 2.1%. Asset manager BlackRock (BLK) reported strong results, including an influx of cash into fixed income ETFs. BlackRock stock climbed 1.9%.
Elsewhere, Johnson & Johnson (JNJ) and UnitedHealth (UNH) both beat expectations as well. Their shares were up 2.9% and 0.2%, respectively.
Caesars Entertainment (CZR) has named a new CEO as it grows closer to a potential sale thats billionaire Carl Icahn has been pushing.
The resort company named Anthony Rodio to the top job. He currently holds the same role for Affinity Gaming, which owns several smaller casinos.
Rodio, who will also join Caesars board, replaces Mark Frissora. Rodio and Icahn previously worked together and Icahn has reportedly been looking to replace Frissora.
Icahn holds 18% of Caesars’ shares and has recently remade its board. Shares are down nearly 2% in premarket trading.
Since it last reported earnings in late January, Netflix’s (NFLX) stock had more ups-and-downs than one if its original series.
The stock has only grown 3% in the last three months:
The company has been dealing with increasing competition, including from Disney (DIS) and Apple (AAPL). Uncertainties about its user growth and its mounting debt have concerned investors.
Disney’s highly anticipated announcement that it will soon enter the streaming wars has recently dented Netflix’s stock: Shares are down roughly 5% since last Friday.
But, there’s good news ahead of earnings: Shares are up nearly 2% Tuesday in early trading after a Deutsche Bank analyst said the service is becoming a “cultural necessity.”
The stock is up 32% for the year.
Asian markets rallied over night, boosted by some positive comments from the People’s Bank of China, which said the Chinese economy “has shown healthy development and economic growth is resilient.”
Local stocks took this as a reason to rally. The Shanghai Composite Index jumped 2.4% on Tuesday and closed at its highest level since March last year.
The comments are framing expectations for first-quarter GDP data, due at 10 pm ET, or during the early hours of the Wednesday trading session in Asia. Consensus estimates are for 6.3% growth, down from 6.4% in the fourth quarter.
The health of China’s economy is a bellwether for the broader global economy. And with worries about a slowdown of growth across the board, data from Beijing has been more in focus than ever.
A strong reading of GDP could lead to a risk rally across assets, including US stocks, on Wednesday.
The stock market may have roared back to life in the first quarter. But many investors are still flocking to the perceived safety of bonds.
Investment management giant BlackRock (BLK) reported strong earnings Tuesday morning, led by a surge of cash into fixed income ETFs. BlackRock CEO Larry Fink said in a press release that a record $32 billion flowed into bond funds during the first quarter.
BlackRock, which owns the popular iShares family of ETFs, now has more than $6.5 trillion in assets under management. The company’s AUM figure dipped below $6 trillion during the market panic of the fourth quarter.
Interestingly though, it appears that both average investors and large institutions are still skeptical of the rebound in stocks. While investors plowed cash into bond funds, BlackRock said that its equity funds reported outflows totaling more than $26 billion.
Lyft’s shareholders are probably hoping for a U-turn on their investment. The stock has fallen nearly 30% since it going public just three weeks ago:
The company’s market cap has lost $4.5 billion since it debut on the Nasdaq.
Daniel Ives, an analyst at Wedbush, previously said he expects “continued pressure” on Lyft’s stock as Uber rolls out its filing.
Resilience is still the word in stocks: After one of the best first quarters in years, April brings the major US averages close to record highs.
This year, the Nasdaq is up more than 20%, the S&P 500 up 15% and the Dow up 13%.
So far, the beginning of earnings season hasn’t changed the narrative: Profit growth turned negative in the first quarter but investors largely expect it.
The US economy is growing and the job market is strong. What are potential risks?
President Trump has until May 18 to decide whether to slap tariffs up to 25% on European car imports.
Bank of America’s (BAC) first quarter earnings beat analyst expectations at $0.70 per share, flat from the previous quarter but up year-over-year.
Revenue came in at $23 billion between January and March, flat both on the year and sequentially. It was the bank’s 17th straight quarter of reducing operating leverage thanks to cost cutting.
Global markets was the only business unit logging a loss on both revenues and net income, which fell 13% and 26%, respectively.
BofA is planning to open 350 new financial centers in new and existing markets, said CEO Brian Moynihan in the company’s press release. He also stressed the bank’s commitment to raise its minimum wage to $20 by 2021 and to extend its environmental business initiative to $300 billion over the next 10 years.
BofA stock was down 0.2% in premarket trading.
The reporting bonanza continues with Bank of America (BAC) and BlackRock (BLK) both set to report earnings before the open.
Investors are particularly nervous about bank results because of worries about the health of the global economy and the uncertainty around rising interest rates in the United States.
Goldman Sachs (GS) said Monday that its net income fell 20% during the first quarter compared with a year ago. JPMorgan Chase (JPM) reported solid results on Friday and Citigroup (C) posted profit that beat estimates.
Netflix (NFLX) is set to report earnings after the closing bell. Last quarter, the company announced that it would raise its monthly fees.
Investors will be looking for a response to Disney’s new streaming service, which was announced last week and is set to debut in November. It will cost roughly half as much as a standard Netflix subscription.
Disney (DIS) isn’t the only competition Netflix is facing: Apple (AAPL), Amazon (AMZN) and AT&T’s (T) WarnerMedia are all going big on streaming.
Shares in Netflix have risen 30% so far this year.
