Day: May 3, 2023

(C) Reuters.

Investing.com — Stocks in focus in premarket trade on Wednesday, May 3rd. Please refresh for updates.

Starbucks (NASDAQ:SBUX) stock fell 4.4% after the coffee chain decided against lifting its 2023 guidance even after beating quarterly profits, powered by a sharp recovery in business in China.

Advanced Micro Devices (NASDAQ:AMD) stock fell 7.6% after the chipmaker forecast quarterly sales below estimates due to a weak PC market.

Ford (NYSE:F) stock fell 1.2% after the auto giant announced it expects to take up restructuring charges between $1.5 billion and $2 billion in 2023, while reporting continued losses in its electric-vehicle unit, even after posting robust first-quarter revenue and profit.

Eli Lilly (NYSE:LLY) stock rose 5.7% after the drugmaker announced positive results of the Phase 3 study of its Alzheimer’s drug.

CVS Health (NYSE:CVS) stock fell 2.4% after the pharmacy chain lowered its financial guidance for 2023, citing costs linked to two recent acquisitions that were part of its effort to expand its offerings.

Amcor (NYSE:AMCR) stock fell 6.4% after the packaging company cut its full-year earnings forecast, flagging weakness in volumes.

Kraft Heinz (NASDAQ:KHC) stock rose 3.2% after the packaged food company raised its full-year profit forecast, as price hikes and resilient demand cushioned the blow from higher commodity costs.

Yum! Brands (NYSE:YUM) stock fell 3.5% after the company beat expectations for first-quarter comparable sales as more consumers opted for Taco Bell and KFC’s cheaper menu items.

Est?e Lauder (NYSE:EL) stock fell over 13.7% after the cosmetics giant forecast a bigger drop in full-year sales and profit on Wednesday on a slower-than-expected recovery in its major market China.

(C) Reuters. Fast-attack crafts from Iran’s Islamic Revolutionary Guard Corps Navy swarming Panama-flagged oil tanker Niovi as it transits the Strait of Hormuz from Dubai to port of Fujairah in the United Arab Emirates, Arabian Gulf early hours of May 3, 2023, are see

DUBAI (Reuters) -Iran has seized a second oil tanker in a week on Wednesday in Gulf waters, the U.S. Navy said, the latest escalation in a series of seizures or attacks on commercial vessels in Gulf waters since 2019.

The Bahrain-based Fifth Fleet of the U.S. Navy said the Panama-flagged oil tanker Niovi was seized by Iran’s Islamic Revolutionary Guard Corps Navy (IRGCN) at 6:20 a.m. (0220 GMT) while passing through the narrow Strait of Hormuz.

In Iran’s first response, Tehran’s prosecutor announced the oil tanker was seized on a judicial order following a complaint by a plaintiff, the judiciary’s Mizan news agency said. No further details were provided.

The incident comes after Iran on Thursday seized a Marshall Islands-flagged oil tanker in the Gulf of Oman called the Advantage Sweet. That tanker is being held by Iranian authorities in Bandar Abbas, the Marshall Islands flag registry said on Tuesday.

Maritime security firm Ambrey has said it believed the Advantage Sweet’s seizure by Iran was in response to a recent seizure via a court order by the United States of an oil cargo aboard the Marshall Islands tanker Suez Rajan.

The Niovi oil tanker seized on Wednesday had been travelling from Dubai toward the UAE’s Fujairah port when it was forced by IRGCN boats to change course towards Iranian territorial waters, the Navy said.

The Niovi last reported its position at 0231 GMT on Wednesday off the coast of Oman in the Strait of Hormuz with Fujairah as its destination, Refinitiv ship tracking data showed.

According to the International Maritime Organization shipping database,, the Niovi’s owner is Grand Financing Co, and the ship is managed by Greece-based Smart Tankers, which did not immediately respond to a Reuters request for comment.

About a fifth of the world’s crude oil and oil products passes through the Strait of Hormuz, a narrow choke point between Iran and Oman, according to data from analytics firm Vortexa.

“Heightened military activity and geopolitical tensions in these regions continue to pose serious threats to commercial vessels,” the Marshall Islands flag registry said in an advisory on Tuesday.

“Associated with these threats is the potential for miscalculation or misidentification, which could lead to aggressive actions.”

Since 2019, there have been a series of attacks on shipping in the strategic Gulf waters at times of tension between the United States and Iran.

Indirect talks between Tehran and Washington to revive Iran’s 2015 nuclear pact with world powers have stalled since September over a range of issues, including the Islamic Republic’s violent crackdown on popular protests, Tehran’s sale of drones to Russia and acceleration of its nuclear program.

(C) Reuters

By Davit Kirakosyan

Investing.com — Here is your Pro Recap of the biggest analyst cuts you may have missed on InvestingPro since yesterday: downgrades at AMD, Comerica, Quest Diagnostics, Corox, and E2open.

AMD cut to Hold from Buy at BofA

Advanced Micro Devices (NASDAQ:AMD) was skidding lower in the premarket Wednesday after sluggish Q2 guidance, which prompted Bank of America to downgrade it to Hold from Buy and to trim its price target to $95 from the prior $98.

BofA sees a “range of headwinds” for the company, including “aggressive pricing/promotion pressure from main rival Pro Recap

(C) Reuters. FILE PHOTO: People line up outside a newly reopened career center for in-person appointments in Louisville, U.S., April 15, 2021. REUTERS/Amira Karaoud

By Lucia Mutikani

WASHINGTON (Reuters) – The U.S. services sector maintained a steady pace of growth in April as new orders increased amid a surge in exports, but businesses continued to face higher prices for inputs, indicating that inflation could remain elevated.

Despite darkening clouds gathering over the economy as the lagged effects of higher interest rates start to have an impact, services businesses in the Institute for Supply Management (ISM) survey on Wednesday were fairly upbeat. That bolsters economists’ expectations that any recession this year will likely be mild and short.

“The majority of respondents are mostly positive about business conditions,” said Anthony Nieves, Chair of the ISM Services Business Survey Committee. “However, some respondents are wary of potential headwinds associated with inflation and an economic slowdown.”

The ISM’s non-manufacturing PMI edged up to a reading of 51.9 last month from 51.2 in March. A reading above 50 indicates growth in the services industry, which accounts for more than two-thirds of the economy. Economists polled by Reuters had forecast the non-manufacturing PMI ticking up to 51.8.

The PMI remains above the 49.9 level, which the ISM says over time indicates growth in the overall economy.

Fourteen services industries reported growth, including accommodation and food services, utilities, public administration as well as transportation and warehousing. The three industries reporting a contraction were mining, agriculture, forestry, fishing and hunting, and wholesale trade.

Finance and insurance companies described business conditions as “steady,” adding they were “preparing for planned expansion in the third quarter.”

Businesses in the professional, scientific and technical services industry reported that they were “well on track to still see significant growth in production through calendar year 2023, as well as 2024 and 2025.” Retailers reported trends as “stable year to date,” noting that “inventory levels are coming more in line to match the new lower demand trends.”

Businesses running down inventories contributed to curbing economic growth to a 1.1% annualized rate in the first quarter. Economists believe that businesses entering a recession with lean stocks put them in a better position to rebuild inventories should the need arise.

The Federal Reserve is expected to raise its benchmark overnight interest rate by another 25 basis points to the 5.00%-5.25% range at the end of a two-day policy meeting on Wednesday before potentially pausing the U.S. central bank’s fastest monetary policy tightening campaign since the 1980s.

U.S. stocks were trading higher. The dollar fell against a basket of currencies. U.S. Treasury prices rose.

TIGHTER CREDIT CONDITIONS

In addition to higher borrowing costs, banks have tightened lending, which could make credit inaccessible to households and small businesses. A standoff to raise the federal government’s $31.4 trillion borrowing cap also poses a grave risk to the economy. Treasury Secretary Janet Yellen warned on Monday that the government could run out of money within a month.

The services sector is being supported by consumers shifting spending from goods, which are typically bought on credit. The ISM reported on Monday that its measure of national manufacturing contracted for a sixth straight month in April, though at a slower pace.

A gauge of new orders received by services businesses increased to 56.1 from 52.2 in March. Comments from companies included “demand outpacing forecasts” to “new requests for services from customers.” A measure of export orders jumped to 60.9 from 43.7 in March.

With demand solid, services inflation persisted. A measure of prices paid by services businesses for inputs nudged up to 59.6 from 59.5 in March. Services prices tend to be stickier and less responsive to interest rate increases.

Some economists view the ISM services prices paid gauge as a good predictor of personal consumption expenditures (PCE) inflation. The Fed, which has a 2% inflation target, tracks the PCE price indexes for monetary policy.

“The upcoming summer months will likely renew upward price pressure on services through stronger demand, keeping the Fed’s goal of ‘demand destruction’ unmet and, therefore, monetary policy outcomes not quite settled,” said Kurt Rankin, a senior economist at PNC Financial (NYSE:PNC) in Pittsburgh, Pennsylvania.

But services sector employment growth slowed further, more evidence that the labor market was softening. The government reported on Tuesday that there were 9.6 million job openings at the end of March, the lowest level since May 2021.

The labor market is, however, not slowing fast enough to tame inflation. The ADP National Employment Report showed on Wednesday that private payrolls increased by 296,000 jobs in April after rising 142,000 in March. The surge was driven by a 154,000 increase in leisure and hospitality employment.

The government’s closely watched employment report on Friday is likely to show nonfarm payrolls increased by 180,000 jobs in April after rising 236,000 in March, according to a Reuters survey of economists. The unemployment rate is seen climbing to 3.6% from 3.5% in March.