World stocks lower as markets digest Fed comments. Most major global stock indices were lower at the time of writing after the Fed left its bond-buying program untouched, as expected, but released a statement that was apparently not quite dovish enough for some. The bank left out a reference to tightening financial conditions, which had been included in the September missive. Some have interpreted that as meaning the Fed hasn't ruled out tapering in December.
Facebook's mobile ads power ahead as earnings top forecasts. Facebook's (NASDAQ:FB) Q3 earnings beat expectations as the social network continued to make progress with mobile ads, whose share of the company's ad revenues rose to 49% from 41% in Q2. Facebook's Q3 adjusted profit doubled on year to $621M, EPS came in at $0.25 and revenue jumped 60% to $2.02B. Management caused a minor panic by saying that Facebook won't keep increasing the number of ads in members' feeds and that teenagers were using the Web site less. Shares gave back massive post-earnings gains to go into the red, but recovered and were +2% at the time of writing.
Sony's FQ2 net loss grows, shares slump. Sony's (NYSE:SNE) FQ2 net loss widened to ¥19.3B ($197M) from ¥15.5B a year earlier even though sales climbed 10.6% to ¥1.78T. The loss was mainly due to a poor performance at Sony's movie business, which is under the spotlight of hedge fund titan Dan Loeb. However, operating losses at Sony's mobile products and communications division narrowed while sales jumped 39%, helped by the weak yen. Sony cut its FY forecast, blaming the electronics and movie operations. Shares were -6.3% premarket.
Top Stock News
Alcatel-Lucent's net losses drop, stock soars. Alcatel-Lucent's (ALU) Q3 earnings beat expectations as net losses narrowed to €200M from €316M a year earlier and revenues rose 1.9% to €3.67B. The telecom-equipment maker also swung to an adjusted operating profit of €116M from a loss of €126M last year. Alcatel-Lucent expects strong seasonal activity to drive its Q4 business, while it projects that fixed-cost savings will hit the top end of its €250-300M target. Shares surged 14.3% premarket.
AMR, US Airways in talks with government over merger. American Airlines (AAMRQ) and US Airways (LCC) are reportedly in discussions with the Justice Department's antitrust division about settling the government's lawsuit that is seeking to prevent the carriers' merger from taking place. The airlines are offering to sell various rights at Washington's Reagan National Airport - where the combined company would dominate - as part of any deal.
Qatar builds up $1B holding in BofA. Qatar's sovereign wealth fund has reportedly accumulated a stake worth $1B in Bank of America (NYSE:BAC), although the fund still holds less than 1% of the firm's stock. Meanwhile, BofA has increased its estimate for the extra amount it might have to spend on legal and regulatory expenses by 82% to $5.1B, as the Justice Department may file another suit tied to mortgage bonds. In better news for BofA, four investors have dropped their objections to an $8.5B deal to settle claims over problematic mortgage debt.
Weak refining margins hit Shell, Total profits. Shell's (RDS.A, RDS.B) Q3 adjusted profit slumped 32% to $4.5B and missed consensus of $5.3B, hurt by low refining margins, increased production and exploration costs, and disruptions in Nigeria because of oil theft and sabotage. Total's (NYSE:TOT) adjusted Q3 net profit skidded 19% to €2.7B ($3.72B) and missed forecasts of €2.78B, with the French company also partly blaming what it called the "endemic problem" of "extremely weak" refining margins. Shell's shares were -4.1% premarket, while Total's were -0.9%.
AstraZeneca's earnings miss forecasts, core op profit sinks 31%. AstraZeneca's (NYSE:AZN) Q3 core operating profit dropped 31% to $2.03B, with the associated EPS falling 28% to $1.21 and missing consensus of $1.27. Revenues slid 6% to $6.25B, undershooting forecasts of $6.38B. AstraZeneca named Marc Dunoyer as CFO to replace Simon Lowth, who's departing for BG Group. Earnings were hurt by generic competition following the loss of patent protection on key drugs such as cholesterol treatment Crestor. Shares dropped 2.2% premarket.
Starbucks shares fall following earnings. Starbucks' (NASDAQ:SBUX) FQ4 net profit rose to $481.1M from $359M as EPS of $0.63 surpassed forecasts, and revenue increased 13% to $3.80B and met expectations. However, shares dropped 2.5% premarket after Starbucks reiterated EPS guidance for FY 2014 that was below analyst estimates, while sales growth slowed in Asia.
AB InBev's core profit grows 10.5%. Anheuser-Busch InBev's (NYSE:BUD) Q3 EBITDA rose 10.5% to $4.66B and exceeded consensus of $4.54B, helped by higher selling prices and cost-cutting. Comparable revenue increased 3% to $11.73B but missed forecasts of $11.86B. AB InBev's volumes in the key market of Brazil dropped 5%, and the brewer indicated that due to high food inflation, FY sales in the country will fall. Shares were +0.8% premarket.
Top Economic & Other News
BOJ maintains policy as is; ups GDP outlook. As expected, the Bank of Japan has maintained its program of expanding the monetary base at an annual rate of ¥60-70T ($611-713B) a year. The BOJ said it is making steady progress in achieving its target of 2% inflation, and reiterated that it expects CPI of 1.3% in 2014-15 and 1.9% a year later. The central bank slightly increased its 2014-15 GDP growth outlook to 1.5% from a prior prediction of 1.3% but maintained its 2015-16 forecast at 1.5%.
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In Asia, Japan -1.2% to 14328. Hong Kong -0.4% to 23206. China -0.8% to 2143. India +0.2% to 21072.
In Europe, at midday, London -0.4%. Paris +0.2%. Frankfurt -0.2%.
Futures at 6:20: Dow -0.2%. S&P -0.1%. Nasdaq -0.45%. Crude flat at $96.81. Gold -1% to $1335.80.
Ten-year Treasury Yield - 3bps to 2.51%.
Today's economic calendar:
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
9:45 Chicago PMI
10:30 EIA Natural Gas Inventory
3:00 PM USDA Ag. Prices
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Notable earnings before today's open: AAP, ABC, ABX, ACOR, ALKS, ALU, ANR, ARRY, AVP, AYR, AZN, BEAM, BGCP, BLC, BUD, BYD, CAH, CI, CLX, COP, COR, COT, CRR, DGI, DISCA,EL, EPD, EPL, FCH, FIG, GBX, GTI, GTLS, HAR, HGG, HSH, IDCC, INCY, IQNT, IRDM, IRM, ITC, ITT, IVZ, KEM, LECO, LIOX, LKQ, MA, MGM,MMP, MOD, MPC, MPLX, MSCI, MYL, NI, NIHD, NILE, NMM, NVO, NYT, O, OCN, OSK, PDCE, PNW, PPL, PRGO, PRLB, PWR, Q, RFP, SCG, SFY,SHOO, SMP, SNAK, SNE, STRA, TDC, TE, TEVA, TWC, VICL, VPHM, VRX, WNR, WWE, XOM
Notable earnings after today's close: ADNC, AHS, AIG, AIV, AMRS, ANH, AVD, BBG, OTCPK:BODY, CALD, CPSI, CPT, DCT, DRC, ELLI, FLR, FRT, FSLR, GDOT, HME, HTCH, KOG, LRE, MDU, MHK,MRC, MTZ, NATI, NEM, NU, OHI, ONNN, PDM, PSA, RSG, RWT, SEM, SPF, SSNC, SWN, TLAB, TRMB, WRI
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