Wall Street eyes records, ASX set to rise; Paramount sweetens Warner Bros offer
Stan Choe
Stocks are flirting with records on Wall Street after mixed earnings reports from major U.S. companies, with Hasbro rising and Coca-Cola falling. Hopes are also rising that the Fed will cut interest rates later this year to stimulate the economy after a discouraging report on the strength of U.S. consumers.
The S&P 500 was up 0.1 percent and at one point in the morning was just above its all-time high from a few weeks ago. The Dow Jones added 243 points, or 0.5 percent, to its record, while the Nasdaq composite was 0.1 percent higher.
The Australian share market is poised to rise, with futures pointing to a gain of 36 points, or 0.4 per cent, at the open at 4.52am AEDT. The ASX fell on Tuesday. The Australian dollar was trading at 70.71¢ at 5.06am AEDT.
The move was stronger in the bond market, where Treasury yields fell after a report showing U.S. retailers were making less money than economists expected at the end of last year. Shoppers spent nearly the same amount in December as in November; This was below the moderate growth economists expected.
This could indicate a loss of momentum in overall spending by U.S. households, the main engine of the economy. This also comes ahead of two reports expected later in the week. On Wednesday, the US government will release the latest monthly update on the unemployment rate, and on Friday it will show how bad inflation is for US consumers.
The data will help the Federal Reserve decide what to do with interest rates. The Fed has suspended interest rate cuts, and runaway inflation could pause interest rates for a long time. However, on the other hand, the weakening of the employment market may push employment cuts to continue more rapidly.
One of the reasons why the US stock market remains close to records is the expectation that the Fed will continue to cut interest rates later this year. Low interest rates can stimulate the economy but also worsen inflation.
After Tuesday’s disappointing report on sales at U.S. retailers, traders increased bets that the Fed could cut rates three or more times this year, according to data from CME Group. Many still see two more cuts as likely.
The yield on the 10-year Treasury note fell to 4.14 percent from 4.22 percent at the end of Monday.
Mixed reactions on Wall Street to the latest earnings reports from major U.S. companies helped keep the market relatively in check.
Coca-Cola fell 2 percent after revenue growth in the latest quarter fell short of analysts’ expectations. It also gave the projected growth range for next year for a key key growth measure, whose midpoint is lower than analysts’ expectations.
S&P Global fell 7.2 percent after forecasting profits for next year that fell short of analysts’ expectations. The company, famous for its stock indices, has recently been grappling with concerns that rivals powered by artificial intelligence technology could steal customers for its data services. The stock has entered the day down 15 percent so far.
But Hasbro rose 7.8 percent in the latest quarter after beating analysts’ profit and revenue expectations. The toymaker was confident in his strength Magic: Meeting has announced a program to send up to US$1 billion ($1.4 billion) in cash to investors, specifically by buying back its gaming and own shares.
DuPont rose 4.2 percent after the chemical giant reported better-than-analysts-expected results in the latest quarter. It also gave its 2026 profit forecast, which beat analysts’ expectations.
Outside of earnings reports, Warner Bros. Discovery rose 2.2 percent after Paramount said it was increasing its offer to buy the entertainment company.
Paramount is increasing its offer of $30 per share by 25 cents per share for each quarter in which its acquisition is not completed by the end of this year. This is to show how confident Paramount is that its deal will get approval from government regulators. Paramount also owns Warner Bros. He also said he would pay US$2.8 billion to help Discovery exit its acquisition deal with Netflix.
Shares of Paramount Skydance rose 1.2 percent, while Netflix rose 1.8 percent.
On stock markets abroad, Japan’s Nikkei 225 index rose for a second day on expectations that the newly elected parliament will help the country’s prime minister implement tax cuts and other moves to stimulate the economy and markets. Nikkei 225 broke a new record with an increase of 2.3 percent.
Gains in other Asian markets were more modest, while indices in Europe were mixed.
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