Back to top

Image: Bigstock

Markets Slide on Interest Rate Ruminations; PYPL, LYFT, EXPE Report

Read MoreHide Full Article

Markets started off strong today after profit-taking over the past couple days brought near-term gains back into less-expensive range. But by midday — following a note from JPMorgan (JPM - Free Report) CEO Jamie Dimon that it’s “too early to claim victory over inflation” — all four major indices slid into the red and rung the closing bell at session lows. The Dow was -258 points, -0.76% for the day, the S&P 500 -0.87%, the Nasdaq sank an even -1.00% and the Russell 2000 took up the rear, -1.39%.

Without a healthy amount of economic metrics keeping up the trading guardrails — and this week has been light on econ prints while Q4 earnings season starts on the wane — investment usually reverts on one of two aspects: 1) whichever way the market “feels” is the best direction based on overall valuation, or 2) one news item may push or pull levels depending in the near-term. With Dimon jumping in to remind the marketplace that the Fed is not soon to be cutting rates, we got both aspects pointing downward.

PayPal (PYPL - Free Report) is up +3% in late trading (it had been as high as +7%) on mixed Q4 results reported after the close: earnings of $1.24 per share was four cents better than the Zacks consensus, while revenues in the quarter of $7.38 billion came in a hair shy of expectations. Total Payment Volumes were slightly lower than analysts were looking for, but after selling off during the past week, PayPal shares are now being bought on the news.

Lyft (LYFT - Free Report) is a much different story, trading down a whopping -24% following its Q4 report on a big bottom-line miss — negative -$0.74 cents per share missed by a wide margin from the +$0.10 expected — on slightly better-than-expected revenues of $1.18 billion in the quarter. Following Uber’s strong earnings report yesterday, Lyft was under pressure to deliver big numbers. Instead, revenue guidance for next quarter was lowered to $975 million from $1.09 billion analysts had been expecting.

Expedia (EXPE - Free Report) also brought out Q4 earnings after today’s closing bell, missing on both top and bottom lines — earnings of $1.26 per share falling short of the $1.85 expected on revenues of $2.62 billion, missing the $2.62 billion in the Zacks consensus. This now marks a negative earnings surprise in six of the company’s last 12 quarters, and shares are selling off -2% after starting 2023 up a very strong +34%. The travel business remains among the strongest sectors in our current market, but today’s report may send Expedia lower than the Zacks Rank #1 (Strong Buy) rating it brought into the print.

Questions or comments about this article and/or its author? Click here>>

Published in