WORLDWIDE: HEADLINES 

 

Qualcomm shares drop as chip supply constraints hold back sales 

Qualcomm Inc shares fell 7.6% in after-hours trading on Wednesday as the company said that semiconductor supply constraints that have roiled the industry were hampering its sales growth.

 

The results come as chip shortages force automakers such as General Motors Co on Wednesday to cut production at multiple plants. While Qualcomm does not make the chips that are holding up automotive plants, the company works with some of the same chip contract manufacturers that are backed up. Qualcomm executives told Reuters that supplies will remain tight through the first half of 2021 without detailing the supply issue.

 

“If we could make more, we could sell it,” Chief Executive Steve Mollenkopf told Reuters in an interview.

 

The share price declines for the San Diego, California-based chip designer came even as it forecast fiscal second-quarter sales and profits above Wall Street expectations, driven by a wave of phone buyers around the world upgrading their devices for 5G network connectivity.

 

Wall Street had expected healthy gains for the company after the U.S. government blacklisted Huawei Technologies Co Ltd, a move that made it difficult for the Chinese brand to build handsets. Analysts had expected much of its market share in the premium smartphone market to flow to Android-based rival makers who use Qualcomm’s chips, but the gains disappointed investors.

 

Full coverage: REUTERS 

 

 

‘Reddit rally’ stocks bounce on day after selloff, then dip after hours 

GameStop and other social media darlings rebounded in calmer trading on Wednesday from their sharp sell-off in the prior session as investors turned their focus to the possibility of tighter U.S. trading regulations.

 

However, the so-called “Reddit rally” cooled again in after hours trade, as GameStop and AMC Entertainment, the main targets hyped on investment forums, fell.

 

Mass buying over the past two weeks by amateur traders following posts on social media fueled a fierce rally in companies that big hedge funds had bet against, including videogame retailer GameStop and cinema operator AMC.

 

GameStop had soared as high as $483 last week, fueled by posts on the Reddit forum WallStreetBets, then dived and on Tuesday fell briefly below $90.

 

On Wednesday GameStop shares closed up 2.68% at around $92.41. They seesawed all day but within a range, while shares of AMC rose 14.71% a day after dropping 41%.

 

After the closing bell, GameStop was off 2.61% while AMC dipped 2.23%.

 

Full coverage: REUTERS 

 

 

S&P 500, Dow end up for 3rd day as Alphabet jumps, volatility eases 

The Dow and S&P 500 rose slightly on Wednesday, registering a third straight session of gains, with Alphabet Inc’s shares hitting a record high following its strong quarterly results.

 

Alphabet shares ended up 7.3% and provided the biggest boost to the S&P 500. The Google parent late Tuesday posted results that topped quarterly sales expectations for its advertising and Cloud businesses, helped in part by the pandemic.

 

With recent stronger-than-expected results from Alphabet and other companies, S&P 500 companies are now on track to post earnings growth for the fourth quarter of 2020 and to defy expectations for another quarterly profit drop due to the pandemic, based on data from Refinitiv Wednesday.

 

The Cboe Volatility index was down, and wild swings in stock prices of GameStop and other social media favorites subsided following a recent trading frenzy. GameStop shares ended the day up just 2.7%.

 

“The broad tape continues to be strong,” said Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.

 

The Dow Jones Industrial Average rose 36.12 points, or 0.12%, to 30,723.6, the S&P 500 gained 3.86 points, or 0.10%, to 3,830.17 and the Nasdaq Composite dropped 2.23 points, or 0.02%, to 13,610.54.

 

Full coverage: REUTERS 

 

 

WORLDWIDE: FINANCE / MARKETS 

 

Oil rises after OPEC+ alliance of major producers maintains oil output cuts 

SINGAPORE- Oil prices edged higher on Thursday after the OPEC+ alliance of major producers stuck to a reduced output policy at a meeting on Wednesday, and as crude stockpiles in the United States fell to their lowest levels since March last year.

 

Brent crude futures gained 4 cents, or 0.1%, to $58.50 a barrel, by 0120 GMT. On Wednesday, Brent prices hit their highest since Feb. 21, 2020.

 

U.S. West Texas Intermediate (WTI) crude futures climbed 13 cents, or 0.2%, to $55.82 a barrel after reaching its highest settlement level in a year on Wednesday.

 

“Crude prices have been rising higher now that OPEC+ has convinced the energy market that they are determined in accelerating market re-balancing without delay,” said Edward Moya, senior market analyst at OANDA.

 

While refinery utilisation rates rose by 0.6 percentage points to 82.3% of capacity, U.S. gasoline stocks rose by 4.5 million barrels, EIA said.

 

Full coverage: REUTERS 

 

 

Dollar holds gains on optimism for economic outlook 

TOKYO – The dollar traded near its strongest in more than two months against the euro and the yen on Thursday as pessimism about the U.S. economic outlook recedes before the release of important data on the jobs market.

 

The British pound held steady against the dollar and traded near an eight-month high versus the euro ahead of a Bank of England policy meeting that will publish findings on the feasibility of negative interest rates.

 

Sentiment for the dollar has improved recently as progress in coronavirus vaccinations, moves by U.S. President Joe Biden to pass more fiscal stimulus, and improving economic data forced some bearish investors to give up their short positions.

 

The dollar faces another test on Friday with the release of non-farm payrolls data, which will help confirm whether the world’s largest economy has been able to shrug off a dip in growth toward the end of last year.

 

“The dollar’s recovery was triggered by a rebound in yields and an increase in inflation expectations,” said Junichi Ishikawa, senior foreign exchange strategist at IG Securities.

 

“This is supporting the dollar, which now has more room to rise against the euro, because the euro zone looks like it is lagging behind U.S. economic growth.”

 

Against the euro, the dollar stood at $1.2040, close to a nine-week high.

 

Full coverage: REUTERS 

 

 

Asian stocks ease as caution persists despite calmer markets 

NEW YORK – Asian stocks came under pressure on Thursday as a mixed Wall Street session gave investors few immediate reasons to increase their risk positions following the recent social media-driven trading chaos.

 

Markets have calmed significantly in the past few days with the Cboe Volatility index down on Wednesday as wild swings in stock prices of GameStop and other social media favorites subsided and the retail trading frenzy faded.

 

However, caution continues to dominate sentiment despite positive corporate earnings and firm signs of economic recovery.

 

The Australian S&P/ASX 200 index lost 0.34% during early trade and Japan’s Nikkei 225 fell 0.35%. The lackluster start to Asian trade followed a mixed Wall Street session with the Dow Jones Industrial Average up 0.12%, the S&P 500 gaining 0.10%, but the Nasdaq Composite losing 0.02%.

 

Supporting U.S. sentiment were strong earnings by technology giants Alphabet Inc and Amazon.com Inc.

 

The Google parent company’s beat sent shares soaring nearly 7% on Tuesday, but some analysts warned the move was too extreme.

 

E-mini futures for the S&P 500 inched 0.26% higher while Hong Kong’s Hang Seng index futures lost 0.16%.

 

MSCI’s gauge of stocks across the globe gained 0.04%.

 

Full coverage: REUTERS