Stock Market

Dow futures drop nearly 300 points, Microsoft falls after earnings

Boeing, News Corp, AT&T among stocks making biggest moves premarket

These are some of the companies making headlines before the bell:

Boeing – Boeing’s stock dropped about 1.7% premarket after the aircraft maker posted earnings and revenue that missed expectations, despite a demand recovery. The company cited labor and supply shortages for the disappointing numbers.

News Corporation, Fox News — Shares of News Corp and Fox News were up 4.9% and 1.8%, respectively, after Rupert Murdoch ditched plans to merge the two companies, a proposition that met pushback from shareholders.

​​AT&T — Shares were up 1.8% after the telecommunications giant’s fourth-quarter report came out Wednesday, showing an increase in subscribers but forecasting an annual profit below expectations.

Microsoft — Microsoft shares declined by nearly 3% after the software giant shared a dismal revenue forecast for the current quarter. The tech bellwether topped earnings expectations but said new business growth slowed in December, including within its Azure segment.

Click here to read more of today’s early market movers.

— Pia Singh

Amazon shares decline as Bernstein trims price target

Shares of Amazon declined nearly 3% premarket amid a price target cut from analysts at Bernstein.

The firm trimmed its price target by $5 to $120 a share, representing about 25% upside from Tuesday’s close price.

“We remain comfortably above the street on EBIT for 2023 as we see operating leverage as a when, not an if, but are keeping an eye on the outlook for AWS as MSFT … performed well this quarter but the guide was weak,” said analyst Nikhil Devnani in a Wednesday note to clients.

Bank of America analyst Justin Post, meanwhile, shared worries about the company’s Amazon Web Services division heading into earnings. He cited Microsoft’s recent Azure guidance as an indicator of decelerating cloud spend.

“We think it will take a few more quarters to digest elevated Pandemic era Cloud spend, but with a large total addressable market and healthy innovation, industry growth can accelerate in 2024,” he said in a Tuesday note

— Samantha Subin

AT&T rises on earnings beat

Shares of AT&T rose more than 2% before the bell despite posting mixed quarterly results.

The telecom giant beat earnings estimates by 4 cents a share, although revenue came in slightly below the $31.39 billion as expected by analysts.

— Samantha Subin

Boeing declines on earnings miss

Boeing shares declined as much as 4% before the bell after fourth-quarter earnings fell short of estimates on both the top and bottom lines amid labor and supply shortages.

The aircraft maker posted an unexpected loss of $1.75 a share on $19.98 billion in revenue. Analysts had anticipated earnings of 26 cents per share on revenues of $20.38 billion.

Despite the top-and-bottom line miss, Boeing generated free cash flow last year for the first time since 2018.

Boeing falls on earnings miss

— Leslie Josephs, Samantha Subin

Mortgage interest rates fall for third consecutive week

Demand for weekly mortgage rose last week as rates declined for the third consecutive period.

Total application volume rose 7% last week over the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

At the same time, rates dropped to the lowest level since September, with the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances declining to 6.2% from 6.23%

— Diana Olick, Samantha Subin

Intuitive Surgical drops after earnings miss

Shares of Intuitive Surgical fell nearly 9% in the premarket after the company reported weaker-than-expected quarterly results.

Intuitive Surgical earned $1.23 per share on revenue of $1.66 billion. Analysts polled by Refinitiv expected a profit of $1.25 per share on revenue of $1.67 billion. The company cited a resurgence in Covid cases in China, which hurt procedure volumes in the region.

ISRG falls after earnings

Microsoft shares shed after-hours gains, turn negative

Microsoft shares slid about 1% in after-hours trading, reversing earlier gains.

Shares were initially higher after the company posted quarterly earnings per share that beat the Street’s expectations. However, investors’ sentiment soured after Microsoft issued disappointing guidance for revenue in the current quarter on its earnings conference call.

The company forecasted $50.5 billion to $51.5 billion in fiscal third quarter revenue, while analysts surveyed by Refinitiv anticipated $52.43 billion.

Read more about Microsoft’s results here.

Darla Mercado, Jordan Novet

Morgan Stanley’s Mike Wilson expects earnings will start to roll over on weaker consumer

Morgan Stanley’s Mike Wilson said investors should brace for tougher times ahead.

“The numbers are actually going to finally come down in a way that we didn’t think would happen in Q4, which it didn’t, but now, we think that’s happening,” Wilson said Tuesday on CNBC’s “Closing Bell: Overtime.”

The investment strategist said he expects earnings will start to roll over as companies deal with a weakening consumer.

Still, he’s open to changing his outlook if he does not see a “more meaningful” drawdown in the next three or four months, or by April.

“We will probably back off our call, … because we’re still in a world of somewhat of financial repression, and bonds are not a great alternative necessarily longer term, and stocks are kind of the only game in town in a higher inflationary environment,” he said. “We’re not willing to make that call today because we think the risk reward is out of whack.”

— Sarah Min

Microsoft shares rise after earnings results show resilience in cloud

Shares of Microsoft led the gains in after-hours trading, up more than 4% after its quarterly results came in above estimates on top and bottom lines. The stronger-than-expected report was driven by the strong growth in its cloud unit.

Revenue in Microsoft’s Intelligent Cloud segment amounted to $21.51 billion, up 18%. Meanwhile, sales from Azure and other cloud services, which Microsoft does not report in dollars, grew by 31%.

— Yun Li

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