Can the Dow Jones Industrial Average come back from yesterday's drop? In today's Morning Movers...
•...we explain why benign inflation matters more than
•...we highlight big moves in Delta Air Lines (DAL), United Continental (UAL), and U.S. Steel (X);
•...and we consider the regulatory future for Facebook (FB), Twitter (TWTR) and Alphabet (GOOGL) in the View From Silicon Valley.
Stocks look set for a higher open this morning as an in-line inflation reading trumps the departure of Rex Tillerson as secretary of state.
Illustration: Getty Images
S&P 500 futures have gained 0.4%, while Dow Jones Industrial Average futures have advanced 76 points, or 0.3%. Nasdaq Composite futures have risen 0.4%.
We've gone on record saying that politics is mostly noise when it comes to the financial markets (though not always--see yesterday's thoughts on the mid-term elections), so we're not surprised that the market is putting the benign inflation reading above Tillerson's departure. The consumer price index rose 0.2% in February from January, meeting expectations. The reading helps allay concerns of an overheating economy, worries that were among the reasons for last month's market correction.
"Modest inflation is what we anticipated, and modest inflation is what we got," writes Mike Loewengart, vice president of investment strategy at E*TRADE. "This will likely go down as a sleeper."
And these days, that's just what the market wants. —Ben LevisohnMorning Movers
It seems like only yesterday that we were writing about Broadcom (AVGO) shares rising on news that Intel (INTC) hoped to buy the firm if its hostile bid for Qualcomm (QCOM) fell through. That's because it was yesterday. Today, Intel might get its chance, as the Broadcom-Qualcomm deal has been quashed by a presidential order. Broadcom is up 1.2% to $266, while Qualcomm is down 4.5% to $59.97.
Delta Air Lines (DAL) is down 1.8% to $55.15 after narrowing its first-quarter guidance to 65 cents to 75 cents a share, compared to the 77 cent per-share consensus. For the full year, it reaffirmed guidance of $6.35 to $6.70 a share, compared to the $6.32 consensus. United Continental (UAL), however, has gained 1.9% to $73.40 after reaffirming its guidance in a slide presentation from the JPMorgan Aviation, transportation and Indus trials Conference.
Illustration: Bloomberg News
Dick's Sporting Goods (DKS) is down 4.8% to $31, after its fourth-quarter earnings. The athletics retailer said it earned $1.22 a share, on revenue of $2.66 billion. Analysts were looking for earnings of $1.20 a share on revenue of $2.73 billion. For the full year, it sees earnings per share of $2.80 to $3, compared to the $2.90 consensus estimate.
DSW (DSW) is up 4.3% to $20.45 after its fourth-quarter earnings. The shoe seller said it earned 38 cents a share on revenue of $720 million. Analysts were looking for earnings of 27 cents a share on revenue of $728.46 million. Comparable sales rose 1.3% in the quarter. For the full year, it expects to earn between $1.52 and $1.67 a share, compared to the $1.64 consensus estimate.
Micron (MU) is flying again. It's up 3.6% to $61.65 after Mizuho raised its price target to $66, the third firm to raise its target this week.
Stitchfix (SFIX) is after reporting second-quarter earnings. The apparel service firm said it earned 7 cents a share on revenue of $296 million, while analysts were expecting earnings of 6 cents a share on revenue of $291 million. For the full year, the company expects revenue of $1.19 billion to $1.22 billion, compared to the $1.2 billion consensus.
Total (TOT) is up 1.8% to $58.48 after Barclays upgraded it to Outperform.
U.S. Steel (X) is down 1.9% to $42.71 after issuing 2018 guidance for EBITDA of $1.7 billion, and reaffirms first-quarter EBITDA guidance of $250 million. Vertical Research Group cut the stock to Sell from Hold, arguing that the tariff bump is now priced into the stock. —Teresa RivasThe View From Silicon Valley
Sen. Mark Warner, D-Va., who has been tough on Facebook (FB), Twitter (TWTR) and other social media platforms for their roles in the 2016 presidential election, isn’t discriminate in his criticism of tech: He has harsh words for the entire industry, which could mean wrenching fundamental and financial changes.
Illustration: Getty Images
Speaking at the SXSW Interactive conference, Warner, the ranking Democrat on the Senate Select Intelligence Committee, decried the U.S.’s inability to combat cyberattacks and disinformation campaigns.
“As far back as 2011, I think Russia realized they weren’t going to out-purchase the U.S. in terms of tanks and airplanes, so they had to figure out a way to wage asymmetrical conflict,” said Warner, who proposed a “cyberdoctrine” for the federal government to address cybersecurity threats.
The doctrine calls for leveraging the government’s purchasing power to force tech companies to adopt security standards – which could mean increased operational costs for them – as well as having the United States reallocate some defense resources into the cyber domain – which could benefit those same companies.
The regulatory implications for companies like Facebook, Twitter and Alphabet’s (GOOGL) Google would be significant, altering their business models.
Facebook already has vowed to plow money into hiring more people and resources to cut down on fake news and misinformation, even if it means cutting into profits. The company also said it will verify ad buyers' identities with postcards.
It’s part of a self-regulator effort by Facebook and Twitter to become more transparent in their efforts to fight abuse and inform users if they viewed Russian propaganda.
Warner, and the general public, aren’t convinced it’s enough and remain skeptical. —Jon Swartz