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The Dow has its biggest loss since October
By CNN Business
Facebook profit jumps 53% amid growing scrutiny
From CNN Business' Kaya Yurieff
Facebook's business continues to fire on all cylinders, even as the company faces growing scrutiny from regulators over its acquisitions and from critics for the role its platform may have played in spreading lies about the US presidential election.
The company said Wednesday that it posted a profit of $11.2 billion in the final three months of last year, an increase of more than 50% from the year prior. Facebook's revenue rose 33% to roughly $28 billion during the quarter, showing the durability of its core advertising business despite the pandemic.
When combining Facebook's various apps, including Instagram, Messenger and WhatsApp, the company reported 3.3 billion monthly active users, an increase of 14% year-over-year.
Facebook CEO Mark Zuckerberg said in a statement:
We had a strong end to the year as people and businesses continued to use our services during these challenging times."
While Facebook ended the year on a strong note, it once again warned of challenges for the year ahead, including "the "evolving regulatory landscape" as well as looming iPhone software changes that it expects will hurt its advertising business.
Tesla disappoints Wall Street despite strong profits
From CNN Business' Chris Isidore
Tesla capped its breakout year with a record profit that still fell short of analysts forecasts, sending its shares 6% lower in after-hours trading.
The electric car maker reported fourth quarter adjusted income of $903 million, excluding special items, more than double its earnings a year ago but still short of the $1.1 billion forecast by analysts. Net income was $270 million, well short of the $780 million estimated by Wall Street.
Still, the results capped a year of strong growth for the company despite the problems associated with Covid-19 pandemic:
- Revenue was up 31% for the year.
- Adjusted income was up more than 6,700% from the modest profit Tesla posted in 2019, the automaker's first profitable year.
- Net income for 2020 was $721 million, compared with a loss of $862 million a year earlier.
Apple just had a blowout quarter
From CNN Business' Clare Duffy
Analysts have talked for at least a year about the potential for Apple's first 5G iPhone to drive a "supercycle" of device sales. On Wednesday, Apple's earnings report for the three months ended December 26 — the first since the iPhone 12 went on sale — offered an initial look at how actual sales are stacking up against that projection.
Strong iPhone sales pushed the company's total quarterly revenue to a record $111.4 billion — well above the $103.3 billion Wall Street analysts had predicted. Apple (AAPL) posted earnings of $16.8 per diluted share, up 35% from the same period in the prior year.
iPhone sales were also even better than expected: Growing more than 17% year-over-year to nearly $65.6 billion, compared with the $59.8 billion analysts had expected. Apple executives last quarter had said they expected single-digit percentage growth in iPhone sales during the December quarter.
Morgan Stanley analysts wrote in a note to investors ahead of the report:
In our view, the iPhone 12 has been Apple's most successful product launch in the last five years."
Wells Fargo bans advisers from telling clients to buy or sell GameStop and AMC
From CNN Business' Matt Egan
At least one big bank is instructing its financial advisers to steer clear of making recommendations on GameStop and AMC amid the insane swings in those stocks, CNN Business has learned.
Wells Fargo banned its advisers from contacting clients to tell them to buy or sell GameStop (GME) and AMC (AMC).
"As of today, Wells Fargo Advisors is not allowing solicitation of those two securities," a spokesperson said in a statement.
The decision was driven by the extreme volatility in GameStop and AMC, whose shares have skyrocketed after getting heavily promoted by Reddit's Wall Street Bets community.
Wells Fargo's clients can still call their advisers to initiate trades in those stocks, though. The decision only means that Wells Fargo's 13,000 advisers cannot make recommendations about those two stocks.
It's not clear how many other big banks are taking similar steps.
Representatives for Bank of America, Citigroup, JPMorgan and UBS did not immediately respond to requests for comment.
Stocks plummet after Fed talks about how the economy has 'moderated'
From CNN Business' Paul R. La Monica
US stocks fell sharply after the Federal Reserve said the economic recovery and job market have “moderated” due to the pandemic.
The Dow suffered its biggest loss since October, dragged down by weak results from Boeing (BA). Both the Dow and S&P 500 are now down year-to-date.
But GameStop (GME) and AMC (AMC), two stocks currently hot with the Reddit/Robinhood crowd, continued to surge as bulls are squeezing short sellers.
- The Dow plunged 2.1%, or 633 points – its biggest drop since October.
- The S&P 500 plummeted 2.6%.
- The Nasdaq Composite also fell 2.6%.
As stocks settle after the trading day, levels might still change slightly.
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