US stocks head higher on promising treatment results: April 29, 2020

By CNN Business

Updated 6:44 a.m. ET, April 30, 2020
10 Posts
Sort byDropdown arrow
8:46 a.m. ET, April 29, 2020

Hasbro pulls holiday outlook due to coronavirus

From CNN Business' Paul R. La Monica

Toymaker Hasbro is warning that it has no idea how many gifts Santa is going to deliver good girls and boys this Christmas. The company pulled its 2020 outlook on Wednesday morning.

The announcement was part of Hasbro's (HAS) first-quarter earnings report, which revealed that sales missed forecasts. The stock fell about 3% in premarket trading. And CFO Deborah Thomas warned things will get worse.

Toward the end of the quarter, physical store closures and country-wide restrictions became more prevalent and entertainment productions shut down. As a result of Covid-19, we expect the second quarter to be more challenging than the first quarter," she said.

Hasbro relies heavily on TV shows and movies, with a license to sell Disney (DIS) toys including Frozen dolls, Marvel superheroes and Star Wars figures like Baby Yoda. And Hasbro recently bought eOne, the studio that makes the popular Peppa Pig and PJ Masks cartoons.

There was some good news: Hasbro's factories in China, which account for 55% of production, are now running at normal capacity after previous coronavirus shutdowns.

And sales of board games, notably Monopoly and Magic: The Gathering, soared 40% as more people are stuck at home.

8:02 a.m. ET, April 29, 2020

Boeing will cut 16,000 jobs after posting a massive loss

From CNN Business' Chris Isidore

Boeing (BA) said it will slash staff and production after posting a massive first-quarter loss. Demand for air travel has evaporated during the coronavirus outbreak, and the aerospace company continues to reel from the 737 Max grounding.

The company announced it would cut 10% of its jobs, about 16,000 positions, through a combination of buyouts, natural attrition and involuntary layoffs. The cuts will be deepest in Boeing's commercial airplane unit -- about 15% of jobs.

Boeing shares moved 3.5% higher on the news.

Read more here.

7:55 a.m. ET, April 29, 2020

The Fed slashed rates to zero and lent billions of dollars. Its next step is complicated

From CNN Business' Anneken Tappe

The Federal Reserve slashed interest rates to zero and committed to a large-scale asset buying programs to help the economy through the coronavirus shock. Now the attention turns to the future, as economists and investors await word on where the Fed expects the economy is headed.

When it slashed interest rates so zero in March, the Fed didn't provide much of a road map beyond acknowledging an expected severe economic disruption. Since then, 26.5 million people filed for initial unemployment benefits, consumer confidence fell to a six-year low and retail sales dropped to the lowest level on record.

The advance reading of first-quarter US GDP growth will be released Wednesday morning ahead of the Fed's update. Economists predict the economy contracted at a 4% annualized rate -- its worst performance in eleven years.

Since the Fed last took action, enough economic data has been released to illustrate just how bad the coronavirus shock is for the US economy. But it fares through the summer and what the recovery looks like remain big question marks.

That's why economists and market participants parse every word in Fed Chairman Jerome Powell's Wednesday's statement.

Read more about today's Fed meeting here.

10:48 a.m. ET, April 29, 2020

Blue Apron plunges despite hopes for strong Q2

From CNN Business' Paul R. La Monica

People may be stuck at home and making more of their own dinners as a result. But that's not helping meal kit company Blue Apron. Shares of Blue Apron (APRN) plunged nearly 20% in early trading Wednesday after the company reported a wider-than-expected loss for the first quarter and a sales decrease of 28% from the same period a year ago.

But Blue Apron's stock is still up 45% in 2020. So this could be a classic case of investors selling the news. Traders have bet that Blue Apron would benefit from the Covid-19 outbreak, which has shuttered many restaurants. To that end, the company is still optimistic about the rest of 2020.

Since late March, we have seen increased demand from existing, returning and new customers in response to the COVID-19 pandemic, and we are proud of our team’s quick actions taken across the business to address this increased demand," said Blue Apron CEO Linda Findley Kozlowski in a press release.

The company added that it's adding workers at fulfillment centers to meet the expected uptick in sales. But Blue Apron also noted that "the duration and extent of this demand increase is unknown."

The meal kit industry is highly competitive. Blue Apron has to contend with HelloFresh and Sun Basket as well as two companies backed my grocery giants -- Albertsons-owned Plated and Kroger's (KR) Home Chef.

And in perhaps another worrisome sign, Blue Apron disclosed in a separate press release Wednesday that it was filing to raise $75 million from the sale of stock or bonds -- a move that could dilute the value of existing shareholders.

11:13 a.m. ET, April 29, 2020

Nearly $1 billion of GE earnings was wiped out by coronavirus

From CNN Business' Matt Egan

General Electric's turnaround has been disrupted by the coronavirus pandemic.

The conglomerate said Wednesday it burned through $2.2 billion of cash during the first quarter as its jet engine business got slammed by a "rapid decline" in global commercial aviation demand in March.

GE (GE) estimated the health crisis wiped out about $900 million of its earnings and hurt free cash flow by around $1 billion.

The impact from COVID-19 materially challenged our first-quarter results, especially in Aviation, where we saw a dramatic decline in commercial aerospace as the virus spread globally in March," CEO Larry Culp said in a statement.

Read more here.

7:03 a.m. ET, April 29, 2020

The world may never recover its thirst for oil

Analysis from CNN Business' Julia Horowitz

The world is learning to live with less oil. It may never look back.

The coronavirus pandemic has destroyed demand for gasoline and jet fuel as billions of people stay home, and there's no guarantee it will ever fully recover despite rock-bottom prices.

The oil industry is bracing for the effects of the crisis to linger. Employees keep working from home. International travel stays scarce. And citizens in once polluted cities, having become accustomed to blue skies, demand tougher emissions controls, encouraging governments to redouble efforts to tackle the climate crisis.

Such changes would come on top of a push for investors to dump oil assets that had been gaining momentum before the recent price crash. Sustainable energy investments, by comparison, appear to have held up relatively well despite stock market volatility.

All this could mean that global demand never returns to its 2019 record high, a scary prospect for oil companies and their employees from Texas to Western Europe, and countries such as Russia, Nigeria or Iraq that depend heavily on selling crude.

Read more here.

11:23 a.m. ET, April 29, 2020

Airbus reports $522 million loss in first quarter

From CNN Business' Jordan Valinsky and Chris Liakos

Europe’s biggest plane maker, Airbus (EADSY), reported a huge loss as the novel coronavirus hits its business.

The firm reported a net loss of €481 million ($522 million) for the first three months of the year compared to a profit of €40 million ($43 million) for the same period last year, the company said in its results Wednesday.

Adjusted earnings before interest and taxes fell 49% and revenues declined 15% year on year. The French company delivered 40 fewer aircraft than a year earlier.

"We are now in the midst of the gravest crisis the aerospace industry has ever known,” said Airbus CEO Guillaume Faury.

On Monday, Airbus placed more than 6,000 workers in the United Kingdom and France on government-funded furlough programs just days after reportedly warning employees that it was burning cash at a rate that could threaten the company's survival.

Rival Boeing (BA) reports earnings later today.

11:14 a.m. ET, April 29, 2020

US stock futures point to a higher opening

From CNN Business' Jordan Valinsky

US stock futures are rising ahead of the Federal Reserve meeting at 2 pm ET.

Here's where futures stand at 6:10 am ET:

Stocks finished Tuesday in the red.

6:07 a.m. ET, April 29, 2020

Samsung warns Covid-19 will hurt smartphone sales and the rollout of 5G

From CNN Busuiness' Sherisse Pham

Samsung is warning that the months ahead will be painful as the coronavirus pandemic disrupts global supply chains, hurts smartphone demand and complicates the adoption of 5G technology.

But the South Korean conglomerate also says the crisis has sparked a fundamental change in how people live — and predicted that the world's reliance on digital services is here to stay as millions of people hunker down at home.

The company on Wednesday reported operating profit of 6.45 trillion won ($5.3 billion) for the three-month period ending in March, up 3.5% compared to the same period a year earlier and in line with analysts' expectations. Revenue rose 5.6% to 55.3 trillion won ($45.4 billion). Net profit slid 3.2% to 4.88 trillion won ($4 billion).

Read more here.