Thursday’s Market Snapshot: Here’s What You Need To Know Right Now

Wall Street’s main stock indexes climbed following a batch of mixed corporate earnings and as US labor market figures appeared to show first signs of improvement.

According to US Labor Department data, the number of new applications for state unemployment benefits fell to 779,000 Americans in the week ended Jan. 30. It marked the third straight weekly drop. Economists polled by Reuters had expected 830,000 applications.

The tech-heavy Nasdaq Composite Index and the Dow Jones Industrial Average both gained 0.8% The S&P 500 Index rose 0.7%.

In earnings news, shares of Nokia plunged almost 7% as the Finnish telecom network company said it expects this year to be challenging due to revenue headwinds in the US. In 2021, Nokia sees sales declining to between €20.6 billion-€21.8 billion from €21.9 billion in 2020. “We expect 2021 to be challenging, a year of transition, with meaningful headwinds due to  market share loss and price erosion in North America. Additionally, delivering on our new operating model for a strong and sustainable long-term business requires us to make further 5G R&D investments in 2021, meaning we will sacrifice some short-term margin to ensure leadership in 5G,” Nokia CEO Pekka Lundmark said.

Qualcomm slumped almost 9% after the chipmaker said on its 1Q FY21 earnings call that financial performance could have been stronger if it had not been “supply constrained.” Furthermore, Qualcomm executives told Reuters that chip supply constraints will remain tight through the first half of 2021 without detailing the supply issue. “If we could make more, we could sell it,” Qualcomm CEO Steve Mollenkopf told Reuters in an interview. Meanwhile, the chipmaker reported fiscal 1Q diluted earnings per share of $2.17 that came in ahead of analysts’ estimates of $2.10. Revenues came in at $8.24 billion, up by 62% year-on-year and below consensus estimates of $8.27 billion.

Meanwhile, eBay surged 5% as the e-commerce platform’s 4Q results outperformed forecasts, fueled by online shopping demand during the holiday season. In 4Q, sales jumped 28% to $2.87 billion year-on-year, exceeding analysts’ expectations of $2.70 billion, as refurbished gifts emerged as a top trend for its holiday shoppers. The auction platform earned an adjusted $0.86 per share in 4Q, beating the Street consensus of $0.83 cents per share. The number of annual active buyers grew by 7% to a total of 185 million global active buyers.

PayPal reported better-than-expected Q4 results sending its shares up 5%. Sales rose 23% year-on-year to $6.12 billion, beating the consensus estimates of $6.09 billion. Earnings of $1.08 per share also came in higher than the $1 forecasts and rose 29% from a year earlier. 2021 forecasts look positive, with full year revenues expected to grow 19% to $25.5 billion. The company also guided for first quarter year-on year earnings growth of 50%.

Royal Dutch Shell declined almost 2% as 2020 profit cratered 71% to $4.8 billion, while Q4 adjusted earnings tanked 87% year-on year to $393 million compared to analysts’ estimates of $597 million. Fourth quarter cash flow from operations fell 39% year-on-year to $6.2 billion and 19% for the year to $34.1 billion. “We are coming out of 2020 with a stronger balance sheet. We expect to grow our US dollar dividend per share by around 4% as of the first quarter 2021,” commented Royal Dutch Shell CEO Ben van Beurden. 

In automotive news, Ford added about 2% as its January retail sales showed that it has beaten the overall industry by 4%. Special Utility Vehicles (SUVs) were the best performers as sales of Ford SUVs grew 8.7% compared to Jan. 2020, giving them their best-ever January start. Andrew Frick, vice president of Ford Sales in US and Canada, said, “January embodies the continued momentum we see for 2021, thanks to a new lineup of must-have products, including F-150, Bronco Sport, Mustang Mach-E and later this year – Bronco.”