Yahoo FinanceStock market today: Stocks open higher, Disney sinks after earnings
US stocks rose slightly to open Tuesday trading following a string of gains, as investors soured on Disney's (DIS) earnings and hoped that interest-rate cuts are in the cards as soon as later this summer.
The Dow Jones Industrial Average (^DJI) stepped up roughly 0.2%, while the S&P 500 (^GSPC) gained about 0.3% after the benchmark scored its best three-day run in a standout 2024. The tech-heavy Nasdaq Composite (^IXIC) ticked up 0.2%.
Stocks have surged as confidence grows that the "Goldilocks" jobs report will give the Federal Reserve reason to ease up on historically high rates — a belief bolstered by comments from policymakers on Monday. A week light on fresh economic data promises to leave those hopes intact.
Results from Disney took center stage as the media giant delivered its first quarterly earnings since winning its proxy fight with activist Nelson Peltz last month. The company's earnings beat Wall Street estimates as a key part of its direct-to-consumer streaming business — which includes Hulu and Disney+ — turned its first profit. But shares tumbled after the company said it expects weaker results in that segment for the current quarter.
Rivian (RIVN) is another highlight on Tuesday's docket as the pace of quarterly reports winds down. Over 80% of S&P 500 have posted results in the best season for earnings in almost two years, which has seen companies prosper despite "sticky" inflation and higher-for-longer interest rates.
Those topics are in focus as Fed officials step up to speak on the heels of their May policy meeting. Minneapolis Fed president Neel Kashkari is set to speak on Tuesday.
Live4 updatesTue, May 7, 2024 at 6:35 AM PDTHamza ShabanStocks open slightly higher as Disney faultersUS stocks ticked up to start the trading session on Tuesday, as investors recoiled at Disney's (DIS) darkened outlook for its streaming business,The Dow Jones Industrial Average (^DJI) stepped up roughly 0.2%, while the S&P 500 (^GSPC) gained about 0.3% after the benchmark scored its best three-day run in a standout 2024. The tech-heavy Nasdaq Composite (^IXIC) ticked up 0.2%.Tue, May 7, 2024 at 4:53 AM PDTBrian SozziDisney CFO post-earnings takeawaysJust taped with Disney (DIS) CFO Hugh Johnston (interview coming up live in the 9 a.m. ET hour) right after earnings.Some top takeaways:On the potential for more Disney+ price hikes:"I think you're going to see prices steadily go up over time in the streaming service mostly because the content we have is worth paying for."On more cost cuts for lagging TV network business:"Any time a business is losing revenue, you have to look at it for cost cuts. And I think the team is doing a terrific job trying to come up with creative ways to produce television programs more cheaply, share resources where it makes sense, take a hard look at every dollar that's being spent and say, 'Okay, is this one that necessary?'"On an economic slowdown impacting Disney US:"We haven't seen any of that at this point, so we certainly feel good about that. Now as I understand it, the lower-income consumers are the ones that are feeling the pinch a little bit more. But even for those consumers, the family vacation is one that's kind of a priority for people."Full coverage of Disney's earnings from Yahoo Finance's Alexandra Canal here.Tue, May 7, 2024 at 4:02 AM PDTAlexandra CanalDisney lessens streaming losses, boosts profit outlookDisney (DIS) said Tuesday that an important part of its streaming business turned a profit for the first time as the media giant reported fiscal second quarter earnings per share that beat analyst estimates.The company's direct-to-consumer (DTC) portion of its entertainment segment, which includes Disney+ and Hulu, posted operating income of $47 million, compared to a loss of $587 million in the prior year period.That doesn't mean all of Disney's streaming services were profitable. Including ESPN+, total direct-to-consumer losses amounted to $18 million versus the $659 million loss reported in the year-earlier period. Disney expects full streaming profitability by the fourth quarter of this year.Shares moved lower in pre-market trading as investors digested the release.Over the past year, Disney has been grappling with challenges that include a declining linear TV business, slower growth in its parks business, and profitability hurdles in streaming. But a recent turnaround plan from CEO Bob Iger has investors more bullish in recent months. The company is fresh off a win in a high-profile proxy fight against activist investor Nelson Peltz.The company reported Q2 adjusted earnings of $1.21 a share — a beat compared with the $1.10 analysts polled by Bloomberg had expected and higher than the $0.93 Disney reported in Q2 2023.It also raised its guidance for full-year adjusted earnings growth to 25%, up from the prior 20%. However, Disney did take a hit after merging its Star India business with Reliance Industries, reporting an impairment charge of more than $2 billion.Revenue came in at $22.1 billion, meeting consensus expectations and ahead of the $21.82 billion the company reported in the year-ago period.The company did warn DTC results in the entertainment segment will be "softer" in the third quarter, driven by losses from its Indian brand Disney+ Hotstar.Read more details about the results here. Tue, May 7, 2024 at 3:37 AM PDTBrian SozziMilken sights and sounds!Greetings from the Beverly Hills Hilton, home of the Milken conference.It's 3:24 a.m. PT here and the hotel is empty, a different scene from Monday's packed house at noon. You are probably wondering why I am here at this time? Well, we are taping an interview with Disney's (DIS) Hugh Johnston soon right after earnings hit. I have known Hugh for a decade, going back to his long time serving as PepsiCo's (PEP) CFO.So considering that and my natural inclination to be awake, why not get things popping early! (Our live coverage on day two of Milken kicks off at 9 a.m. ET on our network, a more normal time)A couple random thoughts that crept into my head during the inflationary Uber ride to the hotel:1. Chatted up a source of mine I have known for years who has knowledge of the Bill Gates and Steve Ballmer relationship. Or should I say no relationship — the two apparently haven't talked in years because Steve is a "family man" and doesn't agree with some of Gates's life choices in recent years.2. If Kevin Hassett has been chosen to be the next Fed chief in Trump presidency round two, as the WSJ recently speculated, he didn't show it in an interview with Akiko Fujita and yours truly yesterday afternoon. He actually downplayed it happening further, off camera. Then again, who in Trump's inner circle wants to speak out against him in any way — don't bite the hand that feeds you, I suppose.3. Good thoughts below by Apollo Global Management (APO) CEO Marc Rowan on the college campus protests below. Rowan has been very vocal on the issue.Note: Apollo is the parent company of Yahoo Finance.4. Yahoo Finance senior reporter Yasmin Khorram was in the room for a much anticipated main stage interview at Milken with Tesla (TSLA) CEO Elon Musk last night. People were leaving early during the meandering conversation, Khorram reports.
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