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Markets Close Higher; JWN, COST, AI & More Report Earnings

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Markets performed something of a mirror image to this past Tuesday’s session, where the Dow alone stayed in the green and the other major indices crossed over from negative territory in the early afternoon. Somewhat dovish comments from Atlanta Fed President Raphael Bostic — or, at least a reiteration that he was favoring a 25 bps rate hike — appear to have leant a bullishness to afternoon trading: the Dow closed +345 points, +1.05%; the S&P 500 was +0.76%; the Nasdaq gained +0.73% and the Russell 2000 reached +0.22%.

The next Fed meeting is not until March 21-22, nearly three weeks from now. We will see plenty of additional economic data to support or refute Bostic’s thinking today, including the Employment Situation report out a week from tomorrow and CPI/PPI data the following week.

We also heard something of a counter to Bostic’s commentary directly after the bell today from Fed Governor Christopher Waller, who said if economic data remains too hot the Fed will have to raise interest rates to 5.25-5.50%. He cited that one thing the Fed cannot afford to do is allow inflation to come roaring back.

Nordstrom (JWN - Free Report) reported a beat on Q4 earnings after today’s close, posting 74 cents per share versus a Zacks consensus 65 cents. Revenues were a hair light of expectations to $4.32 billion in the quarter. It wasn’t quite the performance Macy’s (M - Free Report) delivered before today’s open, as sales lagged in some unlikely places, such as is off-price Nordstrom Rack stores, which were down -8.1% year over year. The company also plans to wind down operations in Canada. Shares initially popped on the earnings beat, but are marginally down in late trading.

Costco (COST - Free Report) put up similar numbers in its fiscal Q2 report this afternoon: earnings of $3.30 per share beat estimates by a solid dime, while sales of $55.27 billion missed the $55.64 anticipated, though were still +6.5% year over year. While net sales were up, its e-commerce business dropped -10% year over year. This may merely be a result of more foot traffic in the post-Covid era, but shares are selling off -2% in the after market. (AI - Free Report) is having a big late session, +17% at this hour, following its big revenue beat in its fiscal Q3 report on a slimmer-than-expected bottom line of -$0.06 per share from the expected -$0.22. Sales of $66.7 million in the quarter bettered the $63.9 million Zacks consensus. We know that AI technology is getting lots of play these days, but ticker symbol AI has gone bonkers: +92% year to date.

Broadcom (AVGO - Free Report) outperformed on both top and bottom lines in its fiscal Q2 report after the bell: earnings of $10.33 per share on $8.92 billion in revenues surpassed the $10.16 per share and $8.89 billion, respectively, analysts were expecting. The company cited infrastructure demand as key to its strong quarter. Details on its cloud business are expected to be addressed on the ongoing conference call.

Hewlett-Packard Enterprises (HPE - Free Report) rounds out a busy afternoon for earnings results. Earnings of 63 cents per share beat the 52 cents in the Zacks consensus, while revenues of $7.81 billion in the quarter easily swept past the $7.40 billion analysts had been looking for. Forward guidance and gross margins also impressed for HPE, which enjoys its first positive earnings surprise in four quarters. Shares are up more than +3% in after hours trading.

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