Twitter, Boeing, AMD: Stocks That Defined the Week
October 30 2020 - 9:24PM
Dow Jones News
By Derek Hall
Twitter Inc.
Investors' affinity for Big Tech is being tested following the
release of earnings from Silicon Valley's biggest companies on
Thursday. Amazon.com Inc. and Alphabet Inc.'s Google reported
strong profits, showing how pandemic-era demand is driving them to
new heights. But Twitter's shares plunged after it posted its
slowest user growth in years and Apple Inc. reported lackluster
iPhone sales. Twitter shares fell 21% Friday.
American International Group Inc.
American International Group is distancing itself from life
insurance. The company is taking steps to hive off that business
into a separate company so it can focus on property-casualty
insurance -- a separation that will be guided by a new chief
executive, Peter Zaffino. Mr. Zaffino was a key lieutenant to
current CEO Brian Duperreault and widely viewed as the heir
apparent inside and outside the company. Before the financial
crisis in 2008, AIG was a global giant in the financial-services
industry with operations that included a financial-derivatives
business, airplane leasing and prosperous life-insurance units in
far-flung locations. AIG shares tumbled on Monday ahead of
earnings, but the stock trimmed its losses after the company
announced its planned split and change in leadership. AIG shares
fell 0.3% Tuesday.
Caterpillar Inc.
One of the world's biggest manufacturers of construction
equipment is getting bulldozed by the pandemic. Caterpillar said
Tuesday that revenue in each of its three global segments fell by
at least 20% in the latest quarter. The pandemic continues to drag
on construction activity world-wide, sapping demand for everything
from cruise ships to dental procedures. 3M Co. said demand for its
products for nonemergency medical and dental procedures isn't
likely to recover through next year. One bright spot was a 4.5%
rise in sales for the third quarter thanks to booming demand for
products such as N95 masks and home-cleaning supplies. Caterpillar
shares fell 3.2% Tuesday and 3M slid 3.1%.
Boeing Co.
Boeing's flight path just got bumpier. The company said
Wednesday that it expects to reduce its head count by an additional
11,000, including 7,000 layoffs, adding to the 20,000 job cuts
already announced. It expects to end next year with about 40% fewer
employees than when it merged with McDonnell Douglas in 1997. The
U.S. aviation industry has already lost around 100,000 jobs this
year and another 220,000 are at risk, according to the Aerospace
Industries Association. Boeing was one of three American defense
contractors that China said it will sanction in retaliation against
U.S. efforts to deepen ties with Taiwan, a potential threat to
Boeing's profitable defense business. Boeing shares fell 4.6%
Wednesday.
General Electric Co.
Things are looking less dim for General Electric. Layoffs and
cost cutting in the third quarter helped it offset troubles that
devastated the aviation industry. Even though the Boston company on
Wednesday reported another quarter of shrinking revenue, including
a 40% decline in its aviation business, the results were better
than expected. GE didn't reveal large losses in long troubled
units, easing investor concerns and allowing the company to buck a
broader market selloff. The industrial conglomerate owns hundreds
of jets and is one of the world's biggest airplane-leasing
companies, and its aviation business was, for years, the company's
biggest and most profitable. GE shares rose 4.5% Wednesday.
Advanced Micro Devices Inc.
Advanced Micro Devices is looking to chip away at the dominance
of its biggest rival. AMD said Tuesday that it plans to buy chip
maker Xilinx Inc. for $35 billion, the latest in a string of
tie-ups in the semiconductor industry. The all-stock deal steps up
the pressure on AMD's biggest rival and industry leader Intel
Corp., which has suffered from problems with its manufacturing
process. AMD specializes in central-processing units and graphics
chips that power modern computers, as well as popular gaming
systems such as Microsoft Corp.'s Xbox and Sony Corp.'s
PlayStation. Xilinx shares have risen about 12% since The Wall
Street Journal reported in early October that the two were close to
an agreement. AMD shares fell 4.1% Tuesday.
Comcast Corp.
The specter of coronavirus continues to haunt amusement parks
and movie theaters, leaving many consumers to seek out at-home
entertainment. This split was evident in the latest results from
Comcast, which owns Xfinity-branded services, the NBCUniversal
media empire and the Sky television business. The
media-and-entertainment conglomerate said Thursday that theme-park
revenue fell 81% in the latest quarter, and filmed entertainment
posted a decline of 25%. Those losses were partly offset by a
record number of new subscribers to broadband, the centerpiece of
Comcast's business, which reported a 10% increase in revenue for
the quarter. Comcast shares rose 2.6% Thursday.
(END) Dow Jones Newswires
October 30, 2020 21:09 ET (01:09 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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