Wall Street Today | US Second-Quarter Growth Rate Cut to 2.1% on Business Spending
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US Second-Quarter Growth Rate Cut to 2.1% on Business Spending
The government's main measure of US economic activity in the second quarter was revised lower, as more moderate business investment than initially reported outweighed stronger consumer spending.
Gross domestic product rose at a revised 2.1% annualized pace in the second quarter, below the government's previous estimate. The downward revision to GDP reflected less inventory and nonresidential fixed investment. Household spending, the engine of the US economy was revised higher, to a 1.7% pace.
Fed Ramps Up Demands for Corrective Actions by Regional Banks
US regulators are quietly demanding that regional lenders shore up their liquidity planning, part of a ramp-up in efforts to tighten supervision in the wake of three bank failures earlier this year.
The Federal Reserve has issued a slew of private warnings to lenders with assets of $100 billion to $250 billion, including $Citizens Financial (CFG.US)$, $Fifth Third Bancorp (FITB.US)$ and $M&T Bank (MTB.US)$, according to people with knowledge of the matter. The wide-ranging notices have touched on everything from lenders' capital and liquidity to their technology and compliance, the people said, asking not to be identified discussing confidential supervisory information.
US Companies Add 177,000 Jobs, Smallest Gain in Five Months
US companies in August added the fewest jobs in five months, a private report showed, adding to signs of moderating labor demand.
Private payrolls rose by 177,000 in August following an upwardly revised 371,000 increase in the prior month, according to figures published Wednesday by the ADP Research Institute in collaboration with Stanford Digital Economy Lab. The median estimate in a Bloomberg survey of economists called for a 195,000 advance.
SECTORS
Oil Edges Up as Traders Take US Crude Stockpile Drop in Stride
Oil edged up in a thinly traded summer session, settling above $81 a barrel, as the market took a substantial drop in US crude stockpiles in stride.
US inventories fell 10.6 million barrels last week to the lowest since December, according to an Energy Information Administration report. Yet crude's reaction to the report was muted, and prices even temporarily dipped lower as the drawdown was in line with several industry reports.
COMPANY
Salesforce Shares Pop on Earnings Beat and Optimistic Forecast
Salesforce shares jumped 6% in extended trading on Wednesday after the cloud software company announced quarterly results and guidance that surpassed Wall Street's expectations.
Salesforce's revenue in the fiscal second quarter increased 11% from a year earlier, according to a statement. Net income rose to $1.27 billion, or $1.28 per share, from $68 million, or 7 cents per share, in the year-ago quarter.
Chewy 2Q Net Income Declines, Sales Rise
Chewy posted a decline in net income even as sales rose, while active customers declined from a year earlier. The online pet retailer posted net income of $18.9 million, declining from $22.3 million a year earlier. Analysts polled by FactSet expected a loss of $22.5 million.
The company logged sales of $2.78 billion compared to $2.43 billion in the year-ago period. Analysts polled by FactSet expected $2.76 billion.
Google Doubles Down on AI at Cloud Next. Wall Street Is Upbeat
$Alphabet-C (GOOG.US)$ is making a set of its mightiest artificial-intelligence tools for business more accessible and powerful, reinforcing its place as one of the frontrunners in a new industry.
J.P. Morgan's Doug Anmuth on Wednesday wrote that he was encouraged to see a quick rollout of Duet AI. He said that "overall, the event reinforces Google's strong AI positioning within Cloud," and that Google Cloud remains an important source of growth for Alphabet, Google's parent company.
What's Ahead for Berkshire Hathaway as Warren Buffett Turns 93
There aren't many people who turn 93 and have people wondering what's next for them. But Warren Buffett, whose birthday is today, isn't normal people.
Dubbed the "Oracle of Omaha" for his nearly six decades of money-gaining insights during his time as CEO of conglomerate $Berkshire Hathaway-A (BRK.A.US)$, Buffett's investment moves are still watched closely by Wall Street.
Tesla Gets a Sell Rating and an Autopilot Safety Letter
$Tesla (TSLA.US)$ investors always have a lot to digest. The latest issues are about driver-assistance features, stock ratings, and movies. Some sound serious, but none of these factors were really moving the stock in early trading Wednesday.
The most serious issue in focus is the disclosure of a letter the National Highway Traffic Safety Administration, or NHTSA, sent to Tesla in late July. The agency asked the electric-vehicle maker for details about adjustments to its driver-assistance features that would allow a driver to keep their hands off the wheel for an extended period.
Source: Bloomberg, Dow Jones, CNBC
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