Here Are 3 Hot Things to Know About Stocks Right Now
- The Dow Jones Industrial Average rose Friday barely logging its fifth straight week of gains.
- Intel Corp. (INTC - Get Report) slumped about 5.5% after the chipmaker's fourth-quarter revenue outlook for the first quarter came in below forecasts.
- Starbucks Corp. (SBUX - Get Report) rose 3.6% after the coffee chain posted first-quarter adjusted earnings and revenue that beat Wall Street's expectations, and it raised its full-year forecast.
Wall Street Overview
Stocks closed higher on Friday, Jan. 25, getting a boost from a number of strong corporate earnings reports even as investors continued to worry about a lack of progress in U.S.-China trade talks and digested further evidence of weakening economic growth.
European Central Bank President Mario Draghi added to the chorus of growth concerns Thursday when he said that the region's economic prospects "have moved to the downside," citing a "persistence of uncertainties" linked to trade and geo-politics.
Draghi's remarks were matched by skepticism from U.S. Commerce Secretary Wilbur Ross Thursday, who told CNBC that Washington and Beijing were "miles and miles" apart on key issues in trade negotiations but still felt a deal between the world's two biggest economies was possible. Trade talks resume next week in Washington.
The Dow Jones Industrial Average rose 184 points, or 0.75%, to 24,737, the S&P 500 was up 0.85%, and the Nasdaq gained 1.29%. For the week, the Dow gained. 0.1%, the S&P 500 lost 0.2% and the Nasdaq gained 0.1%.
The economic calendar in the U.S. Friday was supposed to include Durable Goods Orders for December and New Home Sales for December but the data won't be released because of the partial shutdown of the U.S. government, which has entered its 35th day.
President Trump agreed to re-open the government temporarily, through Feb. 15, allowing some 800,000 federal workers to get paid. The temporary agreement with congressional leaders doesn't include funding for Trump's border wall.
Intel Corp. (INTC - Get Report) closed down about 5.5% Friday after the chipmaker's fourth-quarter earnings beat estimates but revenue for the period and its outlook for the first quarter came in below forecasts.
Adjusted earnings in the quarter were $1.28 a share on revenue of $18.66 billion. Analysts expected earnings of $1.22 a share on revenue of $19.02 billion.
Intel said it expects first-quarter adjusted earnings of 87 cents a share on revenue of about $16 billion, below forecasts that called for profit of $1 a share on revenue of $17.29 billion.
Interim CEO Bob Swan linked the fourth-quarter revenue decline to "digestion" of chips sold in advance of the U.S.-China trade dispute by big data-center customers in China, thus slowing sales over the final three months of the year.
"Trade and macro concerns, especially in China have intensified. Cloud service providers shifted from building capacity to absorbing capacity and the demand pricing environment has further deteriorated," Swan told investors on a conference call late Thursday. "Those incremental headwinds are impacting our revenue expectations and slightly reducing our operating margin percentage forecast."
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Starbucks Corp. (SBUX - Get Report) closed up 3.6% after the coffee chain posted first-quarter adjusted earnings and revenue that beat Wall Street's expectations, and it raised its full-year forecast.
Adjusted profit was 75 cents a share, 10 cents above estimates, while revenue of $6.6 billion came in higher than forecasts of $6.5 billion. Same-store sales in the quarter rose 4%, Starbucks said. China sales grew 1% to $651 million.
The company guided for revenue growth of between 5% and 7% in fiscal 2019 and global comparable-store sales growth of between 3% and 4%. Earnings for the fiscal year were expected to be between $2.63 and $2.73 a share on an adjusted basis. Analysts, on average, call for adjusted earnings of $2.65 a share.
Starbucks was upbeat about its prospects in China, the world's biggest coffee market, where it has planned an aggressive expansion plan to double its store footprint to 6,000 over the next four years.
Western Digital said adjusted earnings for the three months ended in December were $1.45 a share, 6 cents shy of analysts' forecasts. Revenue fell 21% to $4.23 billion, essentially in-line with Wall Street forecasts, and the company said third-quarter earnings and sales also would miss estimates.
However, suggestions from the company that overall memory chip demand may rebound in the second half of the year, a view that echoes the sentiments of key sector peers, pushed Western Digital shares up 7.5% on Friday.
The homebuilder earned 76 cents a share in the quarter, 2 cents shy of analysts' forecasts. Revenue rose 5.6% to $3.52 billion as prices increased and completions rose 7% to 11,500 units.
Colgate-Palmolive Co. (CL - Get Report) posted weaker-than-expected fourth-quarter earnings and said it expects a low single-digit decline in 2019 profit thanks to rising input costs and a stronger U.S. dollar. The stock closed down about 0.6%.
This story has been updated after Friday's close.