Wall Street's major indexes closed higher on Wednesday with the Nasdaq's 1.6% advance leading gains, after the U.S. Federal Reserve kept interest rates unchanged and comments from its top official fueled investor optimism rate hikes were done even though the central bank left the door open for more.
Market Snapshot
The Dow Jones Industrial Average (.DJI) rose 221.71 points, or 0.67%, to 33,274.58, the S&P 500 (.SPX) gained 44.06 points, or 1.05%, to 4,237.86 and the Nasdaq Composite (.IXIC) added 210.23 points, or 1.64%, to 13,061.47.
Market Movers
Advanced Micro Devices (AMD) reported third-quarter adjusted earnings of 70 cents a share, beating analysts’ estimates by 2 cents, but the chip maker’s revenue forecast for the fourth quarter was shy of expectations. AMD said it expects revenue in the period of “approximately $6.1 billion, plus or minus $300 million,” while Wall Street was estimating revenue of $6.4 billion. CEO Lisa Su said AMD expects data-center GPU products to generate about $400 million of revenue in the fourth quarter and surpass $2 billion in 2024. AMD shares rose 9.7%.
Shares of Paycom Software (PAYC) plunged 38% after the provider of cloud-based human capital management software said it expects fourth-quarter revenue of $420 million to $425 million, below analysts’ estimates of $452 million. Paycom also forecast adjusted earnings before interest, taxes, depreciation and amortization of $169 million to $174 million versus expectations of $189 million.
CVS Health (CVS) reported third-quarter earnings and revenue that topped analysts’ estimates but the healthcare company reduced its full-year guidance for the third consecutive quarter. The stock declined 0.4%.
Estee Lauder (EL) fell 19% after the beauty products company issued a fiscal second-quarter outlook that was well off Wall Street expectations. The company said it expects adjusted earnings in the period of 48 cents to 58 cents a share, below expectations of $1.21.
Generac (GNRC) rose 14% after third-quarter earnings and revenue at the generator maker beat analysts’ estimates.
Wayfair (W) closed up 4.2% after declining earlier in the session. The online furniture retailer reported third-quarter sales that missed expectations and a decline in customers.
SunPower (SPWR) sank 5.6% after the solar power company cut its 2023 outlook on weakening demand.
DuPont (DD) fell 8.1% after third-quarter sales missed analysts’ estimates and the chemicals company issued full-year guidance below consensus forecasts.
Match Group (MTCH), the parent company of online dating platforms Tinder, Hinge, and OkCupid, fell 15% after saying it anticipates fourth-quarter revenue of $855 million to $865 million, below analysts’ estimates of $894.2 million. Match also said it expected revenue growth for the full year at the low end of its guidance range.
WeWork (WE) dropped 47% after The Wall Street Journal reported that the flexible-office-space provider was planning to file for bankruptcy as early as next week. The Journal cited people familiar with the matter.
Yum China (YUMC) tumbled 15% after the owner of Pizza Hut, KFC, and other fast-food brands in China reported third-quarter earnings that came up short of estimates and said it had “observed softening consumer demand.”
Humana (HUM) fell 6.6% after the health insurance company said it was revising its GAAP earnings guidance for the fiscal year ending in December to “at least $26.31″ from “at least $26.91,” and affirmed its adjusted earnings guidance of at least $28.25 a share.
Market News
Qualcomm Beats Estimates on China Strength, Shares Rise
Chip designer Qualcomm forecast first-quarter sales and profits above Wall Street targets on Wednesday as a smartphone sales slump finally starts to ease, especially in China, and a renewed contract with Apple helps boost its outlook.
The San Diego, California-based company forecast current-quarter revenue of $9.1 billion to $9.9 billion, with a midpoint above analysts' expectations of $9.2 billion according to LSEG data. Qualcomm predicted current-quarter adjusted profits of $2.25 to $2.45 per share, beating expectations of $2.23 according to LSEG. Qualcomm shares rose 3.6% after the results were released.
Paypal Allays Growth Fears After Raising Annual Profit Forecast
PayPal Holdings raised its forecast for full-year adjusted profit above Wall Street estimates on Wednesday, as the payments giant banks on resilient consumer spending trends during the key holiday shopping season.
Shares of the company rose 3.9% in extended trading after the results. It also named Jamie Miller as its new chief financial officer.
Roku Revenue Up 20% as Streaming Hours Surpass 100 Billion; Shares Surged 17.6%
Roku saw its revenue climb as account adds accelerated and streaming hours surpassed 100 billion for the first time. Roku shares surged 17.6% after posting financial results.
The streaming-service provider posted a loss of $330.07 million, or a loss of $2.33 a share a share, for the quarter ended Sept. 30, compared with a loss of $122.18 million, or 88 cents a share, a year earlier. Analysts polled by FactSet expected a loss of $2.04 a share.
Net sales rose to $912.02 million from $761.37 million. Analysts polled by FactSet had expected $857 million. The company said active accounts totaled 75.8 million, up 16% year over year. Average revenue per user, a key metric, was down 7% year over year to $41.03.
Disney to buy remaining 33% stake in Hulu from Comcast for at least $8.6 bln
Walt Disney (DIS.N) on Wednesday formally began the process of buying Comcast's (CMCSA.O) one-third stake in Hulu, a deal that will give Disney full ownership of the streaming service and freedom to incorporate it into the Disney+ streaming service.
Disney said it expected to pay NBCUniversal (NBCU) parent Comcast about $8.61 billion by Dec. 1. This represents NBCU's percentage of the $27.5 billion guaranteed floor value for Hulu when it agreed to sell its stake to Disney in 2019, minus the anticipated outstanding capital call contributions payable by NBCU to Disney.