Wall Street's three major indexes edged up slightly on Friday as investors digested recent gains while remarks from Federal Reserve officials clouded the outlook about when the U.S. central bank might start cutting interest rates.
Vice Chair for Supervision Michael Barr said he believes the Fed is at or near the peak of interest rate hikes, but San Francisco Fed chief Mary Daly and Boston Fed President Susan Collins highlighted the need for more evidence of cooling inflation.
Market Snapshot
The Dow Jones Industrial Average rose 1.81 points, or 0.01%, to 34,947.28, the S&P 500 gained 5.78 points, or 0.13%, to 4,514.02 and the Nasdaq Composite added 11.81 points, or 0.08%, to 14,125.48.
Market Movers
Alibaba (BABA) - U.S.-listed shares of Alibaba fell 1.9%, extending sharp losses from Thursday after the Chinese tech company said it wouldn’t proceed with spinning off its cloud computing arm, citing risks to the business from recently expanded U.S. export controls on advanced computer chips.
Applied Materials (AMAT) - Applied Materials reported fiscal fourth-quarter earnings and revenue that topped analysts’ estimates, but the stock fell after a report detailed a U.S. Justice Department probe into the semiconductor maker. Reuters reported that Applied Materials was under criminal investigation by the Justice Department for sending its equipment to a Chinese company without the required licenses. The company said it was “cooperating with the government and remains committed to compliance and global laws, including export controls and trade regulations.” The stock fell 4% and was the leading decliner in the S&P 500.
Gap (GPS) - Gap‘s third-quarter adjusted earnings beat analysts’ estimates and same-store sales in the period fell less than expected. The retailer confirmed its full-year revenue outlook, which Chief Financial Officer Katrina O’Connell said “balances the progress we are seeing with a prudent view of the economic and consumer environment in which we are operating.” Gap shares jumped 30.6%.
ChargePoint Holdings (CHPT) - ChargePoint fell 35.5% after the electric-vehicle charging company said it expected third-quarter revenue of between $108 million and $113 million, well below previous expectations of between $150 million and $165 million, and replaced its chief executive and chief financial officer.
Ross Stores (ROST) - Third-quarter earnings at Ross Stores were better than expected and the discount retailer forecast fiscal-year profit of between $5.30 and $5.36 a share, compared with a previous guidance of between $5.15 and $5.26. The stock rose 7.2%.
Expedia (EXPE) - Expedia rose 5.1% to $136.38 after shares of the online travel agency were upgraded to Outperform from In Line at Evercore ISI and the price target was raised to $200 from $135. Airbnb (ABNB) was downgraded to In Line from Outperform at Evercore. The stock rose 0.7%.
Manchester United (MANU) - Manchester United's American owners, the Glazer family, are set to finalise a $33 per share deal with Jim Ratcliffe that will see the British billionaire acquire a 25% stake in the English soccer club, Sky News reported on Friday. The shares rose 7.9%.
BJ’s Wholesale Club (BJ) - BJ’s Wholesale Club closed down 4.9% after the warehouse retailer missed third-quarter same-store sales estimates and reduced same-store sales growth guidance for the fiscal year.
Pacific Biosciences of California (PACB) - Pacific Biosciences of California rose 10.7% after receiving an upgraded to Buy from Neutral at UBS.
Copart (CPRT) - The world’s largest auctioneer of salvaged vehicles, posted first-quarter earnings and sales that beat estimates. The stock climbed 1.9% higher.
Hubbell (HUBB) - Hubbell was upgraded to Overweight from Neutral at J.P. Morgan and the price target was raised to $335 from $333. Shares of the the maker of electrical and utility products rose 3.9% to $300.86.
Market News
ChatGPT Maker OpenAI Ousts CEO Sam Altman
ChatGPT maker OpenAI's CEO Sam Altman has been ousted after the board lost confidence in his ability to lead, the company said on Friday, sending shock waves across the tech industry.
OpenAI's Chief Technology Officer Mira Murati will serve as interim CEO, the company said, adding that it will conduct a formal search for a permanent CEO.
The announcement blindsided many employees who discovered the abrupt management shuffle from an internal announcement and the company's public facing blog.
Backlash Spreads Over Musk’s Endorsement of Antisemitic Post
Outcry over unchecked antisemitic content and commentary on social media site X, some of it endorsed by the platform’s owner Elon Musk, reached a tipping point on Friday, with large advertisers such as Apple Inc. pulling ads and the White House chastising the billionaire.
Musk, who regularly engages with antisemitic users on X, agreed with a post that said Jewish people hold a “dialectical hatred” of white people. “You have said the actual truth,” Musk responded.
Citigroup’s Wave of Job Cuts Set to Start as Soon as Monday
Citigroup Inc. will start a round of job cuts as soon as Monday as part of its sweeping reorganization, according to a person briefed on the matter.
The cuts will mark the first major wave in Chief Executive Officer Jane Fraser’s overhaul aimed at simplifying the sprawling lender and getting rid of five layers of management. The company has said that cuts would begin by the end of this month and continue through the end of the first quarter.
The bank hasn’t put a number on the overall layoffs from a revamp that will refocus the firm on five key businesses. Even before the restructuring plan began, Citigroup had racked up about $650 million in severance charges as part of cutting 7,000 positions in the first nine months of this year.