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Stocks opened mixed Thursday but soon turned mixed, as earnings reports and mixed economic news cut into early gains.
The Dow Jones industrial average and S&P 500 were up a fraction while the Nasdaq fell 0.1%.
Earnings reports remain center stage Thursday, but the monthly job cuts report and weekly unemployment data — both positive — preface the Labor Department’s April payrolls report due out Friday. Meanwhile, the U.S. House of Representatives plans another vote on its health care package, which could have some impact on markets.
In Motion: Facebook, Tesla, Tableau, Lumentum
Facebook turned in a 73% earnings gain, a 49% rise in revenue and an 18% increase in daily active users, all above analyst expectations. An unannounced shift to GAAP accounting methods caused some early confusion in investors and analysts interpreting the results.
Tesla reported a wider-than-expected loss, and a stronger-than-forecast 135% gain in revenue. The stock fell below a buy point at 313.83 in a three-weeks tight pattern.
Anheuser Busch InBev (BUD) tapped a 5% gain. The Belgium-based brewing giant missed earnings expectations, but EPS still rose 45% and revenue growth of 38% narrowly topped analyst targets. Shares remain in a correction but climbed above their 200- day moving average.
Tableau Software (DATA) snapped up 11% at the open. First-quarter revenue growth of 16% came in just below estimates, but the big data software developer reported a 3-cent per share profit, vs. expectations for a loss. The stock broke out past the w a 55.46 buy point in a cup-with-handle base.
Dunkin’ Brands Group (DNKN) fell 2.5% at the open, after reporting first-quarter earnings in line with views while revenue and same-store-sales were below expectations. Management cited “increasingly-challenging environment for retail and restaurants.” The stock ended Wednesday 4% below a 58.53 buy point in a flat base.
Biotech Conatus Pharmaceuticals (CNAT) fired off an 8% gain after announcing that Novartis (NVS) had exercised its option to exclusive licensing rights to emricasan, Conatus’ liver disease treatment currently in Phase 2 clinical trials. Novartis shares were effectively flat at the open.
Q1 Productivity Sags, Labor Costs Jump
Oil prices dragged lower, sending West Texas Intermediate down nearly 2% to below $47 a barrel. Gold fell 1.6% to below $1,229 an ounce. The dollar was mixed: down vs. the euro and up sharply against the yen. Bonds eased, lifting the 10-year yield 3 basis points to 2.35%.
Challenger, Gray & Christmas reported that jobs cuts dropped 15%, to just above 36,000 in April vs. March, and down 43% compared to April 2016. Retail sector employers announce 11,669 layoffs, the highest number of job kills across sectors.
U.S. nonfarm businesses were 0.6% less productive in the first quarter, according to preliminary estimates from the Labor Department. That was below economist expectations from a no-change reading. The report also raised its Q4 productivity estimate to a 1.8% gain, vs, its initial 1.3% estimate. Labor costs rose 3% in the quarter, doubling the fourth-quarter’s revised 1.7% rise.
First-time unemployment claims declined 7%, to 238,000, in the week ended April 29. Economists projected a smaller decrease, to 246,000 claims.
The Commerce Department reports March factory orders figures at 10 a.m.
Europe’s markets rallied, fueled by quarterly results and bank stocks reacting to the confident tone set by the U.S. Federal Reserve on Wednesday, and despite the looming presidential election in France on Sunday. The CAC 40 in Paris surged 0.9%, Frankfurt’s DAX traded ahead 0.7% and the FTSE 100 in London was up 0.2% in afternoon action.
India’s Sensex bolted 0.8% higher. Hong Kong’s market reopened after a one-day holiday with the Hang Seng index dipping less than 0.1%. The Tokyo Stock Exchange remains closed on holiday through the end of the week.