What’s News in Markets: Pixie Dust, BBQ Essentials, Uber Lyft-ed
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Hey, listeners, it's Saturday, May 11th. I'm Francesca Fontana for The Wall Street Journal, and this is What's News in Markets, our look at the biggest stock moves of the week and the news that drove them. Let's get to it. I said it last month, April showers bring May flowers, and it seems like the stock market's April blues are fading away this month. All three major indexes have been rising so far this month, reversing last month's declines as Wall Street regained some confidence that the Fed will start cutting interest rates this year. Not only is that optimism coming from some economic data we got this week, like signs of a cooling labor market from Thursday's Labor Department report, it's also coming from a strong earnings season where investors have been seeing some healthy corporate profits.
And so the three major indexes all closed higher this week. Speaking of earnings season, Disney's results came in this week, and its performance could use a little more magic. Or pixie dust, if you prefer, if you're a fan of the OG Peter Pan animated classic. So Disney on Tuesday swung to a loss and forecast earnings growth that missed expectations. Though there was good news for its streaming unit, which pared its losses and said it's getting closer to becoming profitable. Streaming is the big focus right now for Disney as competition intensifies. I'm sure I am not the only one who went from having like a single Netflix account to having nearly a dozen subscriptions to juggle. I hate it. So we all know it's a crowded market and the companies know this too.
And the day after its earnings, Disney announced some news that could give its streaming business some extra sparkle. Disney and Warner Bros. Discovery announced a new package they're planning to offer this summer, which will include Disney Plus and Hulu from Disney and Max, formerly HBO Max, from Warner. These two are already partners, actually. You might remember that they and Fox are pooling their sports resources in a new joint streaming platform, and that's supposed to launch later this year, too. So, a lot of big news. Let's see how Disney did. Well, Tuesday was a big drop on those disappointing earnings, with Disney shares falling 9.5%.
What market backdrop set the tone for this week's stock moves?
And the Warner Partnership news didn't help it regain much ground the rest of the week. Do you guys remember the Wendy's commercial with that lady, you know, she was like, where's the beef? That's what the meat industry is probably asking right about now, especially after Tyson Foods' earnings this week. Tyson, which is the biggest U.S. meat supplier and a bellwether for the industry, is expecting a bigger loss for its beef business this year, somewhere between $100 million and $400 million to be exact. The problem? Not enough supply, after drought and low profitability led cattle ranchers to shrink their herds. And it's not ideal timing for the stereotypical American barbecue essentials to be in short supply, with grilling season coming up right around the corner.
So after the report, Tyson shares lost nearly 6% Monday, and despite some smaller gains, the stock ended the week lower. And now, by show of hands, who else is craving a burger?
A bright spot in earnings this week was Lyft. Both Uber and Lyft posted earnings Tuesday night, and all you stalwart What's News listeners have already heard about Uber's disappointing earnings. Meanwhile, Lyft beat expectations across the board and reported better-than-expected gross bookings of about $3.7 billion, which was ahead of analysts' estimates.
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