Facebook owner Meta Platforms Inc. (FB) provided disappointing earnings and guidance that raised concerns about its own growth and that of the broader economy. The Nasdaq is nearly 400 points lower, slumping 2.7%, while the Dow and S&P 500 are solidly down.
- Facebook shares dropped 27%, wiping out more than a quarter of it value, after warning of slowing revenue growth. Snap, Twitter and other social media stocks fell as well.
- The Dow Jones and S&P 500 also fell.
- Crude oil jumped, and the yield on the 10 year bond widened.
- The Bank of England announced it would be hiking rates for the second time in less than three months; the last time this occurred was 2004.
Shares of Amazon.com Inc. (AMZN) are down 6%. Shares of Salesforce.com Inc. (CRM) are 5% lower. Spotify Technology (SPOT) shares are sinking on concerns about the company’s user base. Honeywell International Inc. (HON) shares are dragging the Dow lower on its earnings news (more below).
Bond Yields Gain
Oil futures are moving higher, near $89 a barrel. The price of natural gas is down 11% after its 14% gain yesterday. Bitcoin and most other major cryptocurrencies are falling. Wormhole, a popular platform used to bridge Ethereum and Solana, announced $320 million worth of cryptocurrency was stolen via hackers.
Editor’s Picks: Quick Hits
Claims Change: Chart of the Day
Initial jobless claims in the U.S. fell more than economists had estimated last week, but they remained near levels not seen since mid-November as the spread of the omicron variant of COVID-19 continued to impact employment.
The Labor Department reported first-time filings for unemployment benefits were 238,000 for the week ending January 29, a drop of 23,000 from the upwardly-revised 261,000 the week before. The four week moving average was up by 7,750 to 255,000.
Continuing claims for the week ending Jan. 22 dropped by 44,000 to 1.63 million, and the four week moving average of 1.62 million was the lowest since August 1973.
Increase in Just One State
Only one state, Alabama, recorded a rise in jobless claims for the week ending Jan. 22, of 628 claims. Eighteen states had a decline of 1,000 or more, led by California (-8,078), Pennsylvania (-7,967), and New York (-5,722).
Tomorrow, the Labor Department will release the January nonfarm payroll report, which is expected to show a gain of 150,000 with the unemployment rate holding steady at 3.9%.
Honeywell International (HON): Stock of the Day
Honeywell is the worst-performing stock in the Dow after the industrial conglomerate missed quarterly revenue forecasts because of supply-chain disruptions and falling demand for face masks. In addition, the company’s full year guidance for sales and profit came in below analysts’ forecasts.
Honeywell reported organic sales in the aerospace division declined 3% because U.S. defense volumes were hurt by supply constraints and reduced demand. The safety and productivity solutions unit had a 6% drop in organic sales as purchases of protective masks slid from 2020 when the COVID-19 pandemic boosted orders.
Full Year Guidance Miss
The company expects 2022 EPS to be $8.40 to $8.70, with revenue of $35.4 billion to $36.4 billion. Analysts had been looking for EPS of $8.93 and sales of $36.7 billion.
Honeywell International shares are down 5% today, and they’re at their lowest level in more than a year.