The major indexes broke below their Jan. 24 lows, definitively ending a short-lived market uptrend, as Russia grew more belligerent with Ukraine. On Thursday, Vladimir Putin launched a full-scale invasion, but the Dow Jones, S&P 500 and especially the Nasdaq — which briefly hit bear market territory — rallied from steep losses as Western sanctions weren't as tough as some feared. Cybersecurity stocks rallied. Crude oil, gold and Treasury yields whipsawed.
Stock Market In Correction
The Dow Jones, S&P 500 and Nasdaq fell through the Jan. 24 lows, pushing the market back into a correction as investors anticipated a Russian invasion of Ukraine. Stocks plunged further Thursday morning on the actual Ukraine invasion, but rebounded as Western sanctions didn't go as far as they could have. U.S. crude oil prices surged to $100 a barrel at one point, but then came back down. Bond yields and gold prices also swung significantly.
Shale Earnings Continue
Matador Resources, Williams Cos., Laredo Petroleum and Diamondback Energy all topped analysts' targets on revenue and earnings APA Corp., the holding company for Apache, missed EPS views but topped on revenue. Matador guided low on Q1 production, but Siebert Williams Shank analysts say that the outlook is "likely conservative." Energy stocks rose and fell with crude oil prices, which surged to multiyear highs on Russia's Ukraine invasion but they pulled back significantly.
LNG Play Soars Despite Big Loss
Cheniere Energy reported a Q4 loss of $5.22 per share on revenue of $6.56 billion. Analysts polled by FactSet expected EPS of $1.65 on revenue of $4.61 billion. The number of Cheniere LNG cargoes rose by 18% to 153 year-over-year. LNG exports have climbed in recent months as Cheniere completed its Sabine Pass expansion amid increased global demand for LNG, especially in Europe. The liquefied natural gas exporter raised its EBITDA guidance to $7 billion to $7.5 billion for 2022. Shares jumped.
Chip Gear Stocks Rise
Several semiconductor equipment makers Nova, Photronics and Ultra Clean Holdings advanced after posting better-than-expected results. While Photronics guided higher for the current quarter, Nova and Ultra Clean each gave a mixed outlook as supply chain issues continue to impact their businesses. Photronics flirted with a buy point out of a consolidation pattern but seesawed during the market turmoil.
Cybersecurity Earnings Top
Palo Alto Networks said annual recurring revenue for next-generation products rose 70% to $1.43 billion vs. estimates of $1.36 billion. Overall Q2 revenue rose 30% to $1.31 billion, billings popped 32% to $1.61 billion and adjusted EPS climbed 12%, all beating. Zscaler reported fiscal Q2 EPS up 30% while revenue rose 63% to $255.6 million, while also guiding up on current-quarter revenue. But billings growth slowed from 71% in Q1 to 59% in Q2. PANW stock soared, as Russia's Ukraine invasion fueled interest in cybersecurity. Zscaler tumbled on results.
Home Depot, Boise Cascade Tumble
Lowe's hiked its outlook for 2022 after Home Depot gave conservative guidance, citing inflation and supply-chain issues. For the fourth quarter, the home improvement giants, as well as lumber suppliers Louisiana-Pacific and Boise Cascade, outpaced earnings views, benefiting in part from strong comparable sales and high lumber pricing Boise Cascade warned on volatile commodity pricing. Home Depot stock and Boise Cascade plunged, undercutting key levels. Lowe's and Louisiana-Pacific also fell on the week.
Department Stores Crush Views
Macy's gave strong guidance after both Macy's and Dillard's crushed earnings views for the holiday quarter despite supply, labor and inflation challenges. Macy's earnings soared 206% on a 28% sales bounce. Both comparable sales and digital sales were higher than pre-pandemic Q4 2019 levels, boosting hopes of a turnaround. In addition, Macy's authorized a new $2 billion share buyback and hiked its dividend. Dillard's delivered a 357% EPS gain on a 33% sales rebound. Macy's and Dillard's staged ugly reversals amid warnings that supply chain costs will hit profit margins but the stocks found support at their 200-day lines.
Etsy Easily Beats, eBay Guidance Disappoints
Etsy rebounded from a 52-week low after reporting fourth-quarter results late that soundly beat estimates, with EPS unexpectedly rising 3%. Active sellers on the arts and crafts website jumped 72% to reach 7.5 million. Active buyers rose 17.6% to 96.3 million. Meanwhile, eBay topped views but guided low on Q1.
Alibaba Revenue Growth Slowing
Alibaba reported a 22% EPS decline for the latest quarter and its slowest revenue growth since becoming a publicly traded company. BABA stock hit a multiyear low. Another China e-commerce company, Vipshop, beat on earnings but missed on revenue. VIPS stock dropped.
News In Brief
Cadence Design Systems jumped after the maker of electronic design software beat Q4 targets for the fourth quarter and guided much higher for the current quarter and year.
Tempur Sealy reported Q4 EPS rose 31% as sales climbed 29%, but both missed views. Sleep Number also fell short, as chip shortages hurt the adjustable mattress maker. Both mattress stocks plunged.
AstraZeneca popped on Tuesday after the its Daiichi Sankyo-partnered breast cancer treatment showed unexpected promise in patients whose cancer isn't tied to a specific protein. The result was previously unheard of in breast cancer treatment.
Planet Fitness met Q4 EPS views as revenue and same-store sales forecasts missed. The gym operator's 2022 outlook was mixed. Shares fell sharply, then regained ground.
Digital World Acquisition Corp., which is merging with former President Donald Trump's media ambitions, rallied after the launch of Trump social media site Truth Social, despite some early glitches.
Square-parent Block reported Q4 EPS fell 15% while net revenue climbed 62% to $4.42 billion, both beating. Cash App user growth slowed less than feared. Shares soared after hitting a 52-week low earlier in the week.
Booking Holdings reported fourth-quarter results that topped estimates on the top and bottom lines but warned of more volatility in the travel market. Shares tumbled.
NetApp reported quarterly results that beat estimates with a 31% EPS gain and 10% revenue rise. But shares fell as the data storage company guided low.
