The Week's Top Stories is a guided tour through the biggest market stories of the week, from winning stocks to brutal dips to the facts and forecasts generating buzz on Wall Street.
Wall Street had a lot to process this week. As expected, the Federal Reserve raised its benchmark interest rate by 25 basis points rather than 50 or 75 points, which markets liked. At the same time, Fed Chair Powell said more rate hikes were coming, which markets didn't like. For a minute there, it looked like the bulls might win the day. Then the latest federal jobs numbers showed the U.S. economy in January adding an extraordinary 517,000 jobs, more than double most estimates. While the report was good news for workers and the economy overall, investors saw it as more evidence that the Fed would in the short-term keep clobbering the economy with rate hikes.
META'S MEGA RALLY
The tech sector likewise had a weird week. Meta's stock was up around 23 percent on Thursday following an earnings report that showed earnings beating expectations. On top of that, a federal judge rejected a request from the Federal Trade Commission to halt its purchase of a virtual reality startup, putting some wind behind Meta's effort's to monetize the metaverse. The move helped spark a rally in tech stocks, which remain in bad shape from a brutal 2022. The bullish sentiment didn't last long, however, as other tech companies were about to report.
TECH STRUGGLES
Those tech companies happened to be some big names themselves. Apple, Amazon, and Google parent Alphabet all reported after the bell on Thursday, and it didn't paint a pretty picture. Shares of Alphabet were down around 3 percent after it reported a sizable drop in net income and plans to slow down hiring. Amazon's stock fell nearly 8 percent after the company reported its first ever unprofitable year since 2014 and its slowest ever quarter of growth. Apple, meanwhile, was actually up slightly on Friday, despite a 5 percent drop in sales from the same period last year.
BUZZFEED SELL-OFF
News that Buzzfeet planned to use AI chatbot ChatGPT for content sent its stock soaring last week, along with news that Meta planned to pay the media company millions to help get more creator content on Facebook and Instagram. This week, shares of Buzzfeed are down around 42 percent. What caused the shift? Well, one of its biggest investors pulled back on its commitment. Comcast disclosed that it sold 5,726,385 shares of Buzzfeed, of which it owned about 20 percent.
COINBASE GETS A BREAK
Shares of Coinbase, one of the last standing crypto exchanges, were up nearly 30 percent this week after a federal judge tossed out a class action lawsuit against its custody practices. The legal reprieve comes as other former rivals Gemini and crypto lender Genesis Trading undergo a crackdown from the Securities and Exchange Commission.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
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