Stocks end lower on hot jobs report
NEW YORK — Stocks on Wall Street gave up early gains and closed lower Nov. 1 after an unexpectedly strong report on the job market raised concerns that the Federal Reserve will need to keep the pressure on inflation with aggressive interest rate increases.
The S&P 500 fell 0.4 percent after having been up as much as 1 percent shortly after trading opened. The Dow Jones Industrial Average fell 0.2 percent, and the Nasdaq composite dropped 0.9 percent.
Big technology stocks were the biggest weights on the market. The companies, with their big valuations, have more heft in pushing the broader market up or down. Also, rising interest rates tend to make the sector look less attractive because of those high valuations.
Communication services stocks, retailers and other companies that rely on consumer spending also helped drag down the overall S&P 500, keeping gains in banks, energy firms and other sectors of the market in check.
The latest jobs data, which comes ahead of a broader employment report on Friday, is disappointing for investors who are looking for signs that inflation is easing and that the Fed might consider tempering its interest rate increases.
“That really fuels the expectation that the Fed has to do more hiking,” said Jason Draho, head of asset allocation for the Americas at UBS Global Wealth Management. “The labor market is still too tight for the Fed.”
Uber bookings strong as riders return
NEW YORK — Uber gave a fourth-quarter forecast on Nov. 1 indicating that consumers are growing increasingly more comfortable using the service now that pandemic fears have mostly eased.
The transportation service announced that it foresees fourth-quarter gross bookings rising 23 percent to 27 percent year over year on a constant-currency basis, totaling $30 billion to $31 billion.
For the third quarter, gross bookings increased 26 percent to $29.1 billion, or 32% on a constant-currency basis. Trips grew 19 percent to about 21 million trips a day, on average.
The bookings are a bright spot for San Francisco-based Uber, as its ride-hailing service struggled during the pandemic amid lockdowns. But with vaccinations and boosters and the easing of lockdown restrictions, many individuals are traveling more and heading back to offices and restaurants.
“Uber is continuing to see healthy growth as the driver shortage is essentially over while the company continues to benefit from travel returning, shifting to the office, and other post-pandemic trends continue to hold globally with Uber poised to benefit into 2023,” Wedbush’s Dan Ives wrote in a client note.
Third-quarter revenue rose to $8.34 billion from $4.85 billion. This beat the expectations of analysts surveyed by Zacks Investment Research, who predicted $8.08 billion in revenue.
Uber lost $1.21 billion, or 61 cents per share, for the three months ended Sept. 30. That compares with a wider loss of $2.42 billion, or $1.28 per share, a year earlier. Wall Street was looking for a loss of 17 cents per share.
J&J to buy cardio device tech maker
NEW YORK — Johnson & Johnson will spend $16.6 billion to buy cardiovascular technology company Abiomed to strengthen its medical device division.
The health care giant said Nov. 1 that it will pay $380 for each Abiomed share and also provide another $35 per share in cash if some commercial and clinical milestones are met.
Abiomed develops technology that treats coronary artery disease and heart failure. That includes Impella heart pumps, which are used for patients with severe coronary artery disease.
J&J says the deal, which is expected to close early next year, will help the company build its medical device segment by entering a high-growth business.
J&J announced nearly a year ago, that it was turning its focus more to medical devices and its largest business, pharmaceuticals, by splitting off its consumer health division that sells Band Aids and beauty products.
Danvers, Mass.-based Abiomed will run as a standalone business within J&J’s medical device segment after the deal is completed.
Toyota’s profit declines amid chip crunch
TOKYO — Toyota Motor Corp. said its profit fell 31 percent in the last quarter as a shortage of computer chips offset foreign exchange gains from a weaker yen.
The quarterly gain through September totaled the U.S. equivalent of $2.9 billion. Sales at Toyota grew 22 percent $63 billion.
The maker of the Camry sedan, Prius hybrid and Lexus luxury models said it faces many challenges, including rising interest rates, soaring materials costs and fluctuating exchange rates. A shortage in semiconductors, coronavirus lockdowns in Shanghai and flooding in South Africa also bit into earnings.
Toyota lowered its vehicle production forecast for the full fiscal year, from an earlier estimate of 9.7 million vehicles to 9.2 million vehicles.
Toyota sold 2.6 million vehicles around the world in July-September, up from 2.5 million vehicles in the same period last year.
It now expects to sell 10.4 million vehicles in this fiscal year, down from an earlier 10.7 million vehicles it had expected to sell globally.
Pfizer vaccine sales help top forecasts
NEW YORK — Pfizer’s COVID-19 treatment helped the pharmaceutical giant balance tumbling international sales for its coronavirus vaccine and top third-quarter expectations.
The pill treatment Paxlovid brought in $7.5 billion in sales in the quarter and has generated more than $17 billion so far this year.
Sales from the vaccine Comirnaty, meanwhile, tumbled 66 percent to $4.4 billion in the quarter, mainly due to changes in a European Commission supply agreement and slow demand from emerging markets. But vaccine sales jumped in the United States after regulators approved a new booster dose and expanded access to children as young as 6 months old.
Overall, Pfizer’s profit jumped 6 pecent to $8.61 billion, easily topping expectations. Sales slid 6 percent to $22.64 billion as the strong dollar dented international sales, falling short of Wall Street projections of $21.07 billion.
Sony ups its forecasts as profits grow
TOKYO — Sony’s quarterly profit through September rose 24 percent to $1.8 billion on healthy demand for its music and movies, prompting the Japanese entertainment and electronics giant to raise its annual sales and profit forecasts.
The company raised its sales forecast for the fiscal year through March 2023 to $79 billion from $78 billion. It also raised its fiscal year profit forecast to $5.7 billion from $5.4 billion.
Entertainment companies have tended to thrive during the pandemic, as people stuck at home turned to games and movies. Sony makes PlayStation video game consoles and also offers online gaming.
Sony shipped 3.3 million PlayStation 5 game consoles during the second quarter of the April-March fiscal year.
In music, top-selling recordings included Beyonce’s “Renaissance” and Harry Styles’ “Harry’s House.” Among its films, “Bullet Train,” starring Brad Pitt, earned $233 million globally.
Sony, which also makes camcorders and headphones, recorded higher quarterly sales and profits for its imaging and sensor operations.
Amazon grows music catalog to 100M songs
LOS ANGELES — Amazon Music is gearing up for a massive content expansion: The streaming giant will offer a full catalog of music with more than 100 million songs.
The streaming service said its members will gain hundreds of millions of songs — up from 2 million — in shuffle mode without any advertisement at no additional costs.
It will also include most top podcasts ad-free including Wondery’s catalog of premium shows including “MrBallen Podcast: Strange, Dark & Mysterious Stories” and Keke Palmer’s new original podcast “Baby, this is Keke Palmer.”
Amazon Music said the decision behind the huge increase came after customers pressed for a full catalog.
Airbnb cautious as it posts $1.2B gain
NEW YORK — Airbnb reported a $1.2 billion profit for the third quarter but gave a cautious outlook for the fourth quarter.
The short-term rental company said Nov. 1 that demand remains strong despite economic uncertainty.
Airbnb shares have been under pressure this year, dropping more than 30 percent since January despite the recovery in travel.
Airbnb’s challenges include consumers cutting back on discretionary spending like travel due to higher prices for food and gas. Its users are also complaining more about Airbnb’s high fees. The CEO says redesigning Airbnb’s pricing structure is a top priority.
Victoria’s Secret to buy online startup
NEW YORK — Victoria’s Secret & Co. said Tuesday it has signed a definitive agreement to acquire Adore Me Inc., a lingerie startup known for its wide array of sizes, for $400 million in cash.
The move comes as Victoria’s Secret aims to become more inclusive and diversify beyond its sexy image of thongs and other come-hither lingerie.
The deal is expect to close by the end of January, subject to customary closing conditions and regulatory clearances. Victoria’s Secret said it plans to finance the transaction at closing with cash on hand.
Adore Me, founded in 2011, serves more than 1.2 million active customers and is powered by a proprietary technology platform that features “Home Try-On” and monthly subscription options. Adore Me has long been a leader in extended sizes.
Victoria’s Secret said in late August that it’s forecasting annual sales for this year to decline in the mid to high single-digit range compared to the year-ago sales of $6.78 billion. In July 2021, L Brands Inc. spun off the Victoria’s Secret business into an independent, publicly traded company.