U.S. stock index futures mixed on Thursday, after first-quarter earnings from a slew of Wall Street lenders on the last day of a holiday-shortened week, while Twitter shares jumped after Elon Musk's takeover offer.
Market Snapshot
At 8:15 a.m. ET, Dow e-minis were up 52 points, or 0.15%, S&P 500 e-minis were down 3 points, or 0.07%, and Nasdaq 100 e-minis were down 3.75 points, or 0.03%.
Pre-Market Movers
Twitter – Twitter surged 6.5% in premarket trading after Tesla(TSLA) CEO Elon Musk – currently Twitter’s largest shareholder – offered to take the company private for $54.20 per share in cash. The proposed deal would value Twitter at more than $43 billion.
Goldman Sachs – Goldman shares rose 2.2% premarket after the investment bank reported better-than-expected first-quarter profit and revenue. Goldman noted that a “rapidly evolving market environment” had a significant impact on client activity during the quarter.
Morgan Stanley – Morgan Stanley earned $2.02 per share for the first quarter, beating the $1.68 consensus estimate, with revenue coming in above estimates as well. The bank said the upbeat results came despite market volatility and economic uncertainty, and the stock rose 2.3% premarket.
Wells Fargo – Wells Fargo reported adjusted quarterly earnings of 88 cents per share, 8 cents above estimates, but revenue was slightly below analyst projections. The bank said it would be helped by rising interest rates, but that aggressive Fed actions and the Ukraine war add to downside economic growth risks. The stock fell 3.2% premarket.
UnitedHealth Group – The health insurer reported an adjusted quarterly profit of $5.49 per share, 11 cents above estimates, with revenue also topping Wall Street forecasts. Results were helped by growth in the company’s Medicare Advantage business, and it also raised its full-year outlook.
Rite Aid – The drug store operator lost an adjusted $1.63 per share for its latest quarter, larger than the 57 cent loss expected by Wall Street analysts, although revenue exceeded estimates. Rite Aid also projected a fiscal 2023 loss that is smaller than analysts had been anticipating, as well as detailing a cost reduction program. Shares rose as much as 5.5% in premarket trading before retreating.
UPS – UPS rose 1% after Loop Capital upgraded it to “buy” from “hold,” saying the call was largely based on an attractive valuation for the delivery service’s stock.
Western Digital, Seagate Technology – Susquehanna Financial downgraded both hard disk drive makers, moving Western Digital to “neutral” from “positive” and Seagate to “negative” from “neutral,” on expectations of weaker demand in 2023. Western Digital fell 3% in premarket trading while Seagate lost 3.3%.
Rent The Runway – The fashion rental company’s stock was volatile in premarket trading after it reported a smaller-than-expected loss, as well as revenue and profit margins that exceeded Street forecasts. The stock had initially dipped in off-hours trading as investors focused on a lighter-than-expected forecast for the current quarter, then moved higher before losing its gains again.
Market News
Elon Musk Launches $43 Billion Hostile Takeover of Twitter
Elon Musk has made a “best and final” offer to buy Twitter Inc., saying the company has extraordinary potential and he will unlock it.
The world’s richest man will pay $54.20 per share in cash, representing a 54% premium over the Jan 28. closing price and a value of about $43 billion. The social media company’s shares soared 18%.
Musk, 50, announced the offer in a filing with the U.S. Securities and Exchange Commission on Thursday. The billionaire, who also controls Tesla Inc., first disclosed a stake of about 9% on April 4. Tesla shares fell about 1.5% in pre-market trading on the news.
Wells Fargo Quarterly Profit Drops Nearly 21%
Wells Fargo & Co reported a nearly 21% drop in first-quarter profit on Thursday, as rising inflation and interest rates, as well as worries over the economic impact of the Ukraine war dented its core businesses.
A lower-than-anticipated impact from the pandemic has also prompted banks to release reserves set aside to cover losses. Wells Fargo reduced its allowance for credit losses by $1.1 billion in the first quarter.
"Our internal indicators continue to point towards the strength of our customers' financial position, but the Federal Reserve has made it clear that it will take actions necessary to reduce inflation and this will certainly reduce economic growth," Chief Executive Charlie Scharf said.
Goldman Sachs Profit Nearly Halves on Slowdown in Dealmaking
Goldman Sachs Group Inc reported first-quarter profit that nearly halved on Thursday, as capital markets activity normalized from bumper levels a year ago, weighing on the bank's investment banking business.
With the U.S. Federal Reserve beginning to wean the economy off pandemic-era support, dealmaking slowed in the quarter and cast a pall over some of Goldman's most lucrative businesses.
Morgan Stanley profit falls on trading slowdown
Morgan Stanley reported a drop in first-quarter profit on Thursday as trading revenue fell from last year's highs.
The bank's profit fell to $3.54 billion, or $2.02 per share, in the quarter ended March 31, from $3.98 billion, or $2.19 per share, a year earlier.
Analysts on average were expecting the bank to report a profit of $1.68 per share, according to Refinitiv data. It was not immediately clear if the reported numbers were comparable to estimates.
UnitedHealth Quarterly Profit Beats, Raises Full-Year Earnings Outlook
UnitedHealth Group Inc on Thursday reported better-than-expected quarterly earnings, helped by a jump in revenue at its Optum healthcare services unit, prompting the company to raise its profit forecast for the year.
The Optum business, which manages drug benefits and offers healthcare data analytics services, has helped withstand fluctuating medical costs during the pandemic at the company's health insurance business.
Revenue from Optum rose 18.9% to $43.26 billion in the quarter ended March 31, while the health insurance business brought in revenue of $62.6 billion, an increase of 13.6%.
Miner Barrick's First-Quarter Gold Output Down 17%
Miner Barrick Gold , said on Thursday first-quarter production fell 17.7% from the previous three months, hurt by lower output at its Carlin and Cortez mines.
Barrick said gold output was lower because of a mechanical mill failure at its Carlin and Cortez mines and a depletion of stockpiled higher grade underground ore.
The company, which is scheduled to release its first-quarter results on May 4, said the average market price for gold in the quarter was $1,877 per ounce, up from $1,795 per ounce in the prior quarter.