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The major indexes opened lower, with the Dow losing 100 points early Wednesday, but rebounded to close little changed. Apple shares fell by as much as 3% after its earnings report on Tuesday showed that shipments of all major products fell in the third quarter.
First, the scoreboard:
- Dow: 18,199.61, +30.13, (0.17%)
- S&P 500: 2,139.44, -3.72, (-0.17%)
- Nasdaq: 5,250.27, -33.13, (-0.63%)
1. Chipotle shares fell 10% after the company’s earnings release on Tuesday. Same-store sales fell 21.9% in the third quarter — more than expected — while net income was $7.8 million, a decrease from $144.9 million for the period last year. It has been almost a year since the E. coli outbreak affected restaurants in 14 states one year ago. Chipotle has lost nearly half of its market cap this year.
2. Southwest Airlines missed on revenue and gave a bleak outlook for key industry metric. The revenue generated from each seat flown a mile — Revenue per Available Seat Mile (RASM) — will fall by between 4% and 5% in the fourth quarter, the company said. Third-quarter revenue and profit fell, as airlines drop ticket prices to better compete. Southwest shares fell 8%.
3. New home sales rose more than expected in September, by 3.1% at a seasonally adjusted annual rate of 593,000. Sales in August were revised lower. Demand for new homes is still robust amid low mortgage rates and healthy job gains. But supply continues to be a problem.
4. Service-sector activity in the US just improved at the sharpest rate in nearly a year, according to Markit Economics’ preliminary report for October. The flash services purchasing managers’ index released Wednesday rose to 54.8 from 52.3 last month. Service providers were the most optimistic about business conditions since August 2015, as their clients became more willing to spend.
5. Snapchat parent company Snap Inc. is aiming to raise “as much as $4 billion” when it goes public early next year. A source previously told Business Insider that Snap plans to IPO in March at around a $25 billion valuation, but now Bloomberg is saying that number could swell as high as $35 billion. The company last raised $1.81 billion in private funding in May, which pegged its valuation at between $18 billion and $22 billion.
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