Stocks rebound after October sell-off
US stocks posted a three-peat.
Equities rose Thursday following two days of gains for the three major indices. The S&P 500 last posted three consecutive days of advances in September.
The S&P 500 (^GSPC) rose 1.05%, or 28.55 points as of market close. The Dow (^DJI) climbed 1.03%, or 258.94 points, while the Nasdaq (^IXIC) advanced 1.75%, or 128.16 points.
Despite the past few up days, markets are still a long way from recovering October’s losses.
“Equities are down so far by -1.7% since the beginning of this earnings season which, if maintained, would only be the third season with negative returns in the last five years, following the Aug 2015 China devaluation panic and the Q1 selloff this year,” Deutsche Bank’s Binky Chadha wrote in a note.
ECONOMY: US weekly jobless claims decline
US jobless claims fell by 2,000 to 214,000 in the last full week of October, according to a report Thursday from the Department of Labor. Consensus estimates were for 212,000 new claims for the week, according to data compiled by Bloomberg. Continuing unemployment claims declined by 7,000 from the previous week to 1.631 million.
Private sector productivity grew at a slower pace in the third quarter of 2018, according to a preliminary reading from the Bureau of Labor StatisticsThursday. The reading of 2.2% in the third quarter outpaced consensus expectations of a 2.1% rate but fell short of the second-quarter upwardly revised rate of 3%.
The reading for the US ISM manufacturing index fell to 57.7 in October from 59.8 in September, according to a release Thursday. Economists polled by Bloomberg expected a reading of 59. Readings above 50 indicate expansion in manufacturing. The employment index came in at 56.8%, a decrease of 2 percentage points from the September reading. ISM’s new orders index dropped to 57.4, falling beneath 60 percent for the first time since April 2017.
STOCKS: DowDuPont, Teva exceed expectations
DowDuPont (DWDP) delivered third-quarter earnings that topped analyst expectations and lifted its cost-savings target following last year’s merger. The company raised its cost synergy target by$300 million to $3.6 billion and increased its expected year-over-year savings to $1.5 billion. Third-quarter earnings rose to 74 cents per share, beating consensus estimates of 71 cents. The company also announced a $3 billion stock buyback program, which it expects to complete by its first spinoff as it splits into three separate firms. Shares of Dow DuPont rose 8.03% to $58.25 each Thursday.
Drug manufacturer Teva (TEVA) delivered third-quarter earnings per share that outpaced Wall Street’s expectations and lifted its forecast for full-year earnings. The company saw third-quarter adjusted EPS of 68 cents, 14 cents better than consensus expectations and raised its full-year guidance range for EPS to between $2.80 to $2.95 per share from $2.55 to $2.80 previously. Revenue from the company’s top-selling multiple sclerosis drug Copaxone declined 43% year-over-year to $463 million, but fell less than analysts had expected as cheaper, similar drugs hit the market. Teva’s stock rose 15.07% to $22.99 per share at market close.
Shares of Spotify (SPOT) fell after the music streamer delivered disappointing guidance. The Stockholm, Sweden-based company said it sees fourth-quarter revenue of between EU1.35 billion and EU1.55 billion ($1.54 billion and $1.76 billion), with the midpoint of the range slightly beneath below consensus estimates. It also foresees full-year monthly active listeners of between 199 million and 206 million, falling short of average analyst expectations of 208 million users by the end of the year. Third-quarter monthly active users came in at 191 million, up 28% from the year-prior period. Total premium subscribers, which deliver the bulk of revenue, were in line with estimate at 87 million for the third quarter. Spotify debuted on the New York Stock Exchange in April. Shares of Spotify slipped 5.67% to $141.20 each at the end of trading.
Fitbit (FIT) extended gains in early trading Thursday after the company reported its first profit in two years and beat expectations on the top and bottom lines. Adjusted earnings came in at 4 cents per share, versus consensus estimates of a loss of a penny per share. Revenue was $394 million for the quarter, beating expectations of $381.2 million. The company also delivered full-year revenue guidance of $1.5 billion, slightly above average analyst expectations of $1.49 billion. Shares of Fitbit rose 25.69% to $5.95 each at the end of trading Thursday.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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