US Stocks: Wall Street inches higher as Meta earnings offset GDP gloom Wall Street edged higher on Thursday as strong earnings from Meta Platforms lifted battered technology and growth stocks and offset concerns around a contraction in U.S. economic growth in the first quarter. The Facebook-parent rose 12.4% after it reported a stronger-than-expected profit and the social-networking site eked out user growth. Apple Inc, the world’s most valuable company, and e-commerce giant Amazon.com Inc gained 1.9% and 2.1%, respectively, ahead of their earnings later in the day. “The general thesis from earnings so far is things have been pretty good,” said Jack Janasiewicz, portfolio strategists with Natixis Investment Managers. “But until you get greater clarity on how inflation is going to be playing out over the next couple of quarters, and what the reaction from the Fed is going to be, the earnings that we’ve seen will help maybe keep the market range bound.” A U.S. Commerce Department report showed gross domestic product fell at a 1.4% annualized rate last quarter after clocking 6.9% growth in the fourth quarter. Economists polled by Reuters had forecast the economy growing at a 1.1% rate. The slump in output reflected a wider trade deficit and moderate pace of inventory accumulation. While the headline figure could lead to howls about stagflation and recession from some quarters, it is not a true reflection of the economy. The Ukraine war, China’s COVID lockdowns and surging inflation have weighed on the outlook for global economy, sparking volatility across markets in April. The tech-heavy Nasdaq is set for its worst monthly performance in years as investors dumped high-growth stocks on fears that rising interest rates will threaten future earnings and Netflix Inc posted a shocking subscriber loss. At 10:14 a.m. ET, the Dow Jones Industrial Average was up 91.62 points, or 0.28%, at 33,393.55, the S&P 500 was up 23.91 points, or 0.57%, at 4,207.87, and the Nasdaq Composite was up 65.03 points, or 0.52%, at 12,553.96. Twitter Inc, which has agreed to a $44 billion sale to Elon Musk, fell 0.4%, as overall revenue and advertising sales fell short of analyst estimates, due to the ongoing war in Ukraine. Overall, first-quarter earnings have been better than expected, with nearly 80% of the 176 companies in the S&P 500 that have reported results through Thursday beating Wall Street expectations. Typically, only 66% of companies beat estimates. Qualcomm Inc jumped 5% after the chipmaker forecast third-quarter revenue above analyst expectations. Peers Nvidia Corp and Advanced Micro Devices Inc climbed more than 1% each. Caterpillar Inc slipped 4.8% as it indicated profit margins in the current quarter were likely to be pressured from surging costs, while Amgen Inc fell 5.4% after the drugmaker said the U.S. Internal Revenue Service is seeking additional back taxes of $5.1 billion. Declining issues outnumbered advancers for a 1.11-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.34-to-1 ratio on the Nasdaq. The S&P index recorded one new 52-week highs and 23 new lows, while the Nasdaq recorded 18 new highs and 372 new lows.
The Japanese pharma major is also filing a plea before the Delhi HC seeking appointment of forensic auditors to analyse transactions involving IHH, Fortis Healthcare and RHT, Singapore, as directed by the HC on October 18.
The development is likely to create legal hurdles and delay the proposed open offer as IHH had recently told FE that it could only go ahead if Sebi agreed with its legal interpretation that the SC’s September 22 order has lifted all such restraints.
IHH managing director and CEO Kelvin Loh told FE on November 9 that the company would like to go ahead with the open offer “as soon as possible” as there has already been a delay of four years. Ravi Rajagopal, chairman of Fortis Healthcare, had added that their legal counsel has advised that the company can go ahead with the open offer as the SC order has disposed of various appeals, including the suo motu contempt. “We have represented to the Sebi and the matter is with them,” Rajagopal had said.
However, legal observers told FE that the matter is not that straightforward and simple as the Delhi HC has to take the final call on the matter of open offer as well as whether a forensic audit has to be done in the share sale which was executed in 2018.
Also Read: IHH to float open offer for Fortis if Sebi concurs with our legal view: MD & CEO
Loh and Rajagopal had said the possibility that the matter may take a different turn when it comes up in Delhi HC cannot be ruled out.
IHH had in July 2018 acquired a 31% stake in Fortis Healthcare for Rs 4,000 crore through the bidding route. It had also earmarked Rs 3,000 crore to make an open offer for an additional 26% to the public shareholders as required under the law.
Daiichi has written to Sebi that the SC in its September 22 order had asked the HC to consider ordering a forensic audit into the dilution of FHL shareholding, repeated violation of undertakings and assurance by former FHL promoters — Malvinder and Shivinder Singh — and the transaction between FHL, IHH and the clandestine transfer of Rs 4,666 crore to RHT Singapore.
Daiichi is “severely prejudiced” with IHH’s clandestine attempt to subvert the status quo order directed by the SC on December 14, 2018, and September 22 with respect to the conduct of forensic audit and the pending proceedings before the HC by purportedly consulting regulatory authorities, including Sebi, on the proposed FHL-IHH transaction. It has reiterated that the FHL-IHH transaction was currently sub-judice before the HC where FHL is also a party, its solicitors, P&A Law Offices, have said in the letter.
“We further state that any such attempt by FHL and/or IHH to proceed with the FHH-IHH transaction would be in direct contravention of the HC and SC orders,” the letter sent by the law firm has stated. Daiichi Sankyo is pursuing the enforcement of Rs 3,500-crore arbitration award against the Singh brothers pronounced by a Singapore tribunal for concealing information when they sold Ranbaxy Laboratories to it for $4.6 billion in 2008. The apex court had in 2018 put on hold the sale of Fortis Healthcare to IHH on a contempt plea filed by the Japanese drugmaker against the Singh brothers.