Nasdaq futures eked out gains on Thursday as electric automaker Tesla topped Wall Street's profit target, while futures tracking the S&P 500 and the Dow struggled for direction ahead of more earnings reports.
The number of Americans filing new claims for unemployment benefits rose for a third straight week last week to the highest in eight months, suggesting some cooling in the labor market amid tighter monetary policy and financial conditions.
Initial claims for state unemployment benefits rose 7,000 to a seasonally adjusted 251,000 for the week ended July 16 from a unrevised 244,000 a week earlier, the Labor Department said on Thursday. Economists polled by Reuters had forecast 240,000 applications for the latest week.
Market Snapshot
At 7:55 a.m. ET, Dow e-minis were down 110 points, or 0.35%, S&P 500 e-minis were down 7.50 points, or 0.19%, and Nasdaq 100 e-minis were up 7.00 points, or 0.06%.
Pre-Market Movers
Tesla (TSLA) – Tesla gained 2.8% in premarket trading after reporting better-than-expected earnings for the second quarter. Tesla’s revenue came in below forecasts and it saw shrinking profit margins as it dealt with higher costs and supply chain disruptions.
Carnival (CCL) - Carnival took a 11.7% hit in the premarket after announcing a $1 billion common stock offering. The cruise line operator plans to use the proceeds for general corporate purposes.
United Airlines (UAL) – United Airlines missed top and bottom line estimates for the second quarter and the carrier warned of the impact of higher jet fuel prices and a possible economic slowdown. United slid 7.4% in premarket action.
Alcoa (AA) – Alcoa rallied 4% in premarket trading after posting a better-than-expected second-quarter profit as sales rose faster than costs. Alcoa also announced a $500 million share repurchase program.
AT&T (T) – AT&T fell 2.3% in the premarket, despite beating estimates on both the top and bottom lines for the second quarter, as it lowered its full-year free cash flow guidance. AT&T also reported a jump in quarterly wireless subscriber additions and raised its full-year forecast for wireless revenue growth.
American Airlines (AAL) – American fell 3% in the premarket after quarterly earnings matched estimates and revenue was essentially in line with forecasts. The profit was the airline's first since the start of the pandemic and the carrier expects the current quarter to be profitable as well.
DR Horton (DHI) – The home builder reported better-than-expected earnings for its latest quarter, but revenue fell short of analyst forecasts. The company cut its full-year sales guidance on moderating demand. Shares fell 1.4% in premarket trading.
Travelers(TRV) – Travelers rallied 4.3% in premarket action after reporting better-than-expected profit and revenue for the second quarter. The upbeat performance came despite higher catastrophe losses and a drop in investment income.
Danaher (DHR) – The medical and industrial products and services company’s second-quarter profit and revenue were better than expected, with higher sales helping offset an increase in expenses. Danaher jumped 3.5% in premarket trading.
CSX (CSX) – CSX rose 3% in premarket trading after beating top and bottom line estimates for the second quarter. The rail operator is seeing skyrocketing demand but it is having difficulties hiring because of a tight labor market.
Market News
Russia Resumes Nord Stream Natural-Gas Supply to Europe
Russian natural gas began flowing again at a reduced volume through a critical pipeline into Europe on Thursday, according to the operator of the pipeline, buying time for governments to decouple from the Kremlin’s exports amid what they expect will be an increasingly unreliable supply of energy from Moscow heading into the winter.
The Nord Stream pipeline connecting Russia with Germany under the Baltic Sea resumed operation after its annual maintenance, ending 10 days of tense speculation about whether Vladimir Putin’s regime would cut off the gas flow to Europe in retaliation for Western sanctions after Ukraine war.
Tesla Profit Tops Target; Musk Says High Prices Could Hurt Demand
Tesla on Wednesday reported a smaller-than-expected drop in quarterly profit, helped by a string of price increases for its cars, which Elon Musk later said were "embarrassingly high" and could hurt demand.
Tesla also sold a majority of its bitcoin holdings, which led to smaller-than-expected impairment charges caused by a decline in the value of the cryptocurrency, analysts said.
Apple Can Hit $3 Trillion on Services Shift, Morgan Stanley Says
Apple Inc.’s pivot to a subscription-like model creates a clear path to a market capitalization of more than $3 trillion, according to Morgan Stanley.
While the market still tends to value the iPhone maker as a hardware company, shifting to a “lifetime value” based approach -- which takes into account recurring revenues from services -- suggests long-term upside to over $200 per share, or more than $3 trillion in market value, Morgan Stanley analysts wrote in a note. Apple shares closed at $153 on Wednesday.
China Fines Didi Global $1.2 Billion for Violating Data Security Laws
China's cybersecurity regulator said on Thursday it has fined Didi Global Inc 8.026 billion yuan ($1.19 billion), concluding a probe that forced the ride-hailing giant to delist from New York within a year and cast a gloom over the Chinese tech sector.
The Cyberspace Administration of China (CAC) said its investigation found Didi had illegally collected millions of pieces of user information over a seven-year period starting June 2015, and carried out data processing activities that seriously affected national security.
In an unusual move, the CAC said it had also fined the company's founder and Chief Executive Cheng Wei and President Jean Liu 1 million yuan each.