Stocks Fall as Investors Digest Earnings Reports; Tesla and Apple lead Big Tech decline

Southwest stock falls as DOT sues over delayed flights

21 minutes ago

Shares of Southwest Airlines (LUV) fell Thursday after the Department of Transportation sued the airline over two “chronically delayed flights.”

The federal agency said Wednesday evening that Southwest operated two flights – from Chicago to Oakland and from Baltimore to Cleveland – described as “chronically delayed” for five consecutive months in 2022.

A flight is defined as “chronically delayed” when it operates at least 10 times per month and arrives at least 30 minutes late more than half of the time, the agency said in its court filing Wednesday. The DOT plans to take action whenever a chronically delayed flight is scheduled at its normal time for more than four consecutive months, because “unrealistic schedules” can give airlines a competitive advantage.

“Southwest is disappointed that DOT has chosen to pursue legal action regarding two flights that occurred more than two years ago,” a Southwest spokesperson said. Investopedia. “Since the DOT issued its Chronically Delayed Flight (CDF) policy in 2009, Southwest has operated more than 20 million flights without further CDF violations. Any claim that these two flights represent an unrealistic schedule is not the whole story. simply not credible compared to our performance over the last 15 years.

The DOT also fined Frontier Airlines (ULCC) $650,000 on Wednesday for operating “three chronically delayed flights between August 2022 and April 2023,” and JetBlue Airways (JBLU) fined $2 million earlier this month for operating “four flights chronically delayed at least 145 times.” between June 2022 and November 2023.”

Separately, Citi analysts on Wednesday lowered their rating on Southwest shares from “neutral” to “sell” and reduced their price target by $2 to $29.50, citing concerns that Southwest shares are trade at a higher premium than some of its U.S. airline rivals. They said they expected a “correction” in Southwest’s valuation in the coming months.

Shares of Southwest were down 2% at $32.14 in late trading Thursday, after falling to $31.20 this morning. The stock has gained 12% over the past 12 months, lagging the S&P 500’s performance during that period.

–Aaron McDade

Target Raises Fourth Quarter Sales Guidance on Strong Holiday Shopping

1 hour 38 minutes ago

Target (TGT) on Thursday raised its forecast for fourth-quarter same-store sales growth due to a stronger-than-expected holiday shopping season.

The retailer expects its comparable sales to increase 1.5% in the fourth quarter compared to the same period last year, up from the previous projection of flat comparable sales given by Target in its report on third quarter results.

Target saw comparable sales increase 2% in November and December, with a 3% increase in traffic to its stores and website, and record sales figures during Black Friday and Cyber ​​sales events Monday.

Despite the upward revision to sales forecasts, Target kept its previous projected earnings per share (EPS) ranges at the same level. Comparing holiday shopping data to its disappointing third-quarter results, Target said it saw a “significant acceleration” in some discretionary categories like clothing and toys.

Target shares were down 1.5% as of mid-afternoon.

–Aaron McDade

Tesla Stock Price Levels to Watch

2 hours 25 minutes ago

Shares of Tesla (TSLA) lost ground on Thursday after posting the best performance in the S&P 500 yesterday, extending the stock’s volatility.

Tesla shares are 16% below their mid-December peak, but have surged 64% since the November presidential election, partly on expectations that the autonomous robo-taxi maker’s ambitions could be accelerated under the new Trump administration.

Tesla shares have generally been trending higher since breaking out of an ascending triangle in early November. More recently, the stock has been consolidating in a flag pattern, indicating the continuation of the strong uptrend. However, it’s also worth pointing out that trading volumes have generally declined throughout the stock’s post-election rally, suggesting that some larger investors may be staying away.

Bar pattern analysis, which takes the stock’s strong trend from October 2019 to February 2020 and repositions it from November’s ascending triangle breakout, forecasts a long-term bullish price target of about $775.

Investors should watch for key support levels on Tesla’s chart, around $300 and $265.

The stock fell nearly 4% to around $412 in recent trading, giving back much of yesterday’s 8% rise.

Read the full technical analysis article here.

–Timothy Smith

Morgan Stanley Hits Record High as Profits Beat Expectations

3 hours 33 minutes ago

Shares of Morgan Stanley (MS) rose Thursday after the bank reported better-than-expected results, as revenue at its equity trading unit soared and investors poured more money into initial public offerings (IPO).

Morgan Stanley reported fourth-quarter earnings per share (EPS) of $2.22, nearly triple what it was a year ago. Revenue jumped 26% year over year to $16.22 billion. Both easily beat the consensus forecasts of analysts surveyed by Visible Alpha.

Equity net revenue rose 51% to $3.33 billion on gains across all of the company’s businesses and regions, with Morgan Stanley highlighting increased client activity, particularly in its market prime brokerage and in Asia. Equity underwriting revenue doubled to $455 million, which the group said was driven by “a higher number of follow-ons and IPOs as clients raised capital strategically in a more constructive environment. Strong stock market gains pushed asset management and related fees up 11% to $1.56 billion.

CEO Ted Pick called it a “great fourth quarter,” with a 20% return on tangible equity (ROTCE) that “follows three quarters of consistent execution.”

Shares of Morgan Stanley are up nearly 3% in recent trading after hitting an all-time high this morning.

–Bill McColl

Symbotic Stock debuts as part of robotics partnership with Walmart

5 hours 18 minutes ago

Shares of robotics company Symbotic (SYM) jumped about 20% Thursday morning after the company announced an expanded partnership with Walmart (WMT) that includes Symbotic’s purchase of Walmart’s robotics business and the funding from Walmart for the development of new automation programs.

Symbotic is acquiring Walmart’s Advanced Systems and Robotics business for $200 million, plus up to $350 million in potential future payments. Additionally, Walmart will pay Symbotic $520 million during the development of a new robotics platform.

The companies announced Thursday that Symbotic will develop “an advanced solution leveraging Symbotic’s AI-driven robotics platform to provide Walmart customers with greater shopping convenience through expedited pickup and delivery options online in stores.

Assuming the project meets certain “performance criteria,” Walmart will purchase the Symbotic system for 400 “expedited pickup and delivery centers” over the next few years.

“This is a highly strategic transaction for Symbotic as we grow our long-term relationship with Walmart and expand our product offerings beyond the traditional warehouse to e-commerce settings for delivery of the latest kilometer,” said Rick Cohen, CEO of Symbotic.

The companies have worked together to automate parts of Walmart’s robotics projects and supply chain since 2017, and expect Symbotic’s acquisition of Walmart’s robotics business to close in the second quarter of this year.

Even with Thursday morning’s sharp rise, Symbotic shares are down 23% over the past 12 months.

–Aaron McDade

UnitedHealth stock falls after disappointing results

7 hours 10 minutes ago

Shares of UnitedHealth Group (UNH) fell premarket Thursday after the company reported fourth-quarter results that missed analysts’ expectations.

The healthcare giant’s revenue rose 7% year over year to $100.8 billion, below Visible Alpha consensus. Its profit of $5.54 billion, or $5.98 per share, also missed analysts’ estimates. Adjusted earnings per share (EPS) of $6.81 exceeded expectations.

The company confirmed its 2025 outlook of revenue between $450 billion and $455 billion, EPS of $28.15 to $28.65 and adjusted EPS of $29.50 to 30, 00 dollars.

Thursday’s results are the company’s first since the CEO of its UnitedHealthcare unit, Brian Thompson, was fatally shot on Dec. 4.

Shares of UnitedHealth were down 4% in recent premarket trading. Through Wednesday’s close, the stock had gained 5% over the past 12 months, compared with a 25% rise for the S&P 500 over the period.

–Nisha Gopalan

Futures indicate mixed open for major indexes

7 hours 45 minutes ago

Futures contracts tied to the Dow Jones Industrial Average fell 0.3%.

S&P 500 futures were down slightly.

Nasdaq 100 futures were up 0.1%.