The wild week in stocks shows no sign of slowing this afternoon. All three major indexes are now rising, bouncing off of their morning lows as Apple Inc. (AAPL) pulled tech stocks higher. Despite today's recovery, the Dow and S&P 500 are still on track to post their fourth straight week of declines.
- Stocks reverse earlier declines and are trading higher; the Dow and S&P 500 are still on track to close lower in what will be a fourth-straight week of declines.
- Apple's surge continues after reporting record revenues, up nearly 6%.
- Despite today's gain, the Nasdaq is headed for its fifth-straight weekly decline.
- Dow components Chevron and Caterpillar are falling.
Apple (AAPL) is helping to lift tech stocks after the iPhone maker reported record-setting sales and profits. Shares of all the other FAAMG companies are rising. Salesforce (CRM) shares are up 3%. Visa (V) shares are jumping on the credit card company’s better-than-expected earnings report. Shares of rival MasterCard (MA), which also reported strong earnings this week, are advancing as well.
The Nasdaq is now 1.7% higher after tumbling in the morning. The tech-heavy index is still on track to finish lower for the week, which would be five in a row. The Dow Jones is gaining less than 0.1%, weighed down by Chevron Corp. (CVX) and Caterpillar Inc's. (CAT) meager earnings. The S&P 500 is gaining. Both are on track for a fourth-straight weekly decline.
Oil futures are hovering around $88 a barrel. The yield on the 10-year Treasury note has narrowed to 1.78%. The euro is stronger vs. the dollar. Bitcoin is trading higher, while most other major cryptocurrencies are flat.
Inflation Hits Caterpillar
Caterpillar (CAT) dropped as the big equipment maker said it's facing higher costs and big backlogs. Chevron (CVX) missed fourth quarter profit forecasts. Shares of cruise lines and airlines are tumbling for a second day on concerns the recovery in travel from the COVID-19 pandemic may be delayed.
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Fed Figure Focus: Chart of the Day
A key gauge used by the Fed to measure inflation, the Commerce Department’s Personal Consumption and Expenditures (PCE) Price Index, increased 5.8% from the year before, up from a gain of 5.7% in November. The jump was the highest since 1982. The core index, which leaves out volatile food and energy prices, advanced 4.9%, the largest rise since 1983. This comes two weeks after the Consumer Price Index (CPI) indicated retail inflation last month rose 7% on an annual basis.
The Commerce Department also reported Personal Consumption Expenditures fell 0.6% from 2020, the first monthly decline since February. Higher prices and consumers doing their holiday shopping early over concerns supply-chain disruptions would limit product availability cut into December sales.
Compensation Cost Rise
In a separate report, the Labor Department said compensation costs for civilian workers gained 4% in 2021, with wages and salaries moving up 4.5%. Both increases were the highest since officials began keeping the data two decades ago.
Robinhood Markets: Stock of the Day
Robinhood predicted first quarter sales of less than $340 million, down 35% from a year ago and more than $100 million less than analysts’ estimates. The company blamed the difference on the “outsized revenue performance” it had in early 2021 because of booming activity fueled by the meme stock craze.
In the fourth quarter, monthly active users (MAU) fell 8% from the previous quarter to 17.3 million, although they were up 48% from 2020. Robinhood’s loss was $0.49 per share, more than forecasts. Sales were 14% higher to $363 million, beating expectations.
CEO and Co-Founder Vlad Tenev remained optimistic, pointing out Robinhood nearly doubled the number of customers on its platform in 2021, and plans to expand its product offerings this year.
Shares Down Since IPO
Robinhood shares have bounced back from their previous lows, but the company has lost about two-thirds of its value since the company went public last July. The company's value shot up to $60 billion during its August highs, it now stands below $10 billion.