Higher fuel costs eat into airlines’ profits.
Rising jet fuel prices are putting downward pressure on Airline profits. United Airlines said it expects third-quarter fuel costs between $2.95 and $3.05 a gallon, a rise from a per-gallon range of $2.50 and $2.80 Back in July, when the airline gave its third-quarter guidance. Southwest Airlines also said fuel prices would be higher than previously forecast.
Jet fuel prices have increased 24% since the start of the industry’s second-quarter earnings season. The development has sparked a reaction from Wall Street. On Tuesday, Bank of America analysts cut price targets across the industry, citing the high prices
U.S. Global Jets ETF is down 5.3% for the week.
Apple faces new threat in China
Apple faces a new sales threat in China after Beijing ordered government officials not to use iPhones for work or bring them into the office. There are speculations that the ban might be extended to state-owned enterprises and other government-backed entities.
The policy is part of the Chinese government’s plan to reduce its reliance on foreign technology.
Apple’s stock slumped over those two days, costing the company about $200 billion in market value. Apple shares finished the week 6% lower.
SEC investigates GameStop Chairman Ryan Cohen
The Securities and Exchange Commission is investigating billionaire Ryan Cohen’s ownership—and surprise sale—of Bed Bath & Beyond (BBBY:NYSE) shares.
The GameStop (GME:NYSE) executive chairman took a $120 million stake in the struggling housewares retailer and pushed for changes to its sales strategy, but abruptly sold it in August 2022. The five-month investment netted him a nearly $60 million profit.
Cohen’s interest in the company spurred a frenzy of trading that caused its stock to soar 34% in a day before collapsing when he disclosed the sales.
Bed Bath & Beyond filed for bankruptcy in April and has closed hundreds of its stores. Furniture retailer Overstock bought the brand and relaunched its website.
GameStop shares slid 6.2% Friday, and down 3.7% for the week
Kroger and Albertsons to sell more than 400 stores to C&S
Kroger’s (KR:NYSE) stock rallied after a spate of announcements boosted investor optimism in the company, but the forecast on sales remains dim. The grocery giant said inflation, high interest rates and reduced government benefits are stretching shoppers’ budgets.
Kroger and rival Albertsons (ACI:NYSE) both announced they would sell more than 400 stores to C&S Wholesale Grocers to complete their proposed merger.
C&S, which operates Grand Union grocery stores and the Piggly Wiggly franchise, will pay Kroger about $1.9 billion in cash. Kroger said the merger remains on track to close in early 2024.
Kroger shares are finished 4.3% higher for the week.
Outages put Block’s share in the dark
Block (also known as Square) stock fell 5% in its third consecutive day of declines after its payments platform, Square was hit by widespread outages Thursday and Friday.
The payments platform said it was “experiencing a disruption that is impacting some Square services” on Thursday. Early Friday, it said on X (Twitter) that “services are steadily regaining their functionality.”
Block’s stock fell nearly 5% Friday, its third consecutive day of declines. It is on track for its lowest close since October.
Block shares are down 9% for the week.
Docusign raises outlook
DocuSign’s (DOCU:NASDAQ) stock declined 3%, even after it raised its outlook for the fiscal year and increased the size of its buyback program. DocuSign reported second-quarter fiscal 2024 earnings per share (EPS) of 72 cents, with revenue rising 11% to $687.7 million. Billings rose 10% to $711.2 million.
CEO Allan Thygesen credited the company’s business restructuring for its progress and boost in revenues. However, the company warned that economic challenges still persist and may impact the company’s performance.
Shares of DocuSign finished the week 1.1% lower.