European stock markets closed higher Wednesday as traders digested a string of strong corporate results. The pan-European Stoxx 600 closed up 0.5%, with most sectors and major exchanges in positive territory. Financials were among the top performers in anticipation of higher interest rates. Annual inflation in the eurozone hit an all-time high in January, according to preliminary Eurostat figures released Wednesday.
U.S. stocks rose for a fourth straight day Wednesday as Alphabet drove gains in the technology sector thanks to strong quarterly results. Major tech companies were the main drivers of the four-day rally as investors turned their attention to earnings season. Wednesday’s gains came even as data from ADP showed a 301,000 drop in private payrolls for January. Economists surveyed by Dow Jones had expected a gain of 200,000 private jobs in January.
Asia-Pacific markets traded mixed this morning amid continued concerns about global growth and ongoing geopolitical tensions. A number of major markets, including those in mainland China and Hong Kong, remain closed for the New Year holiday. In Australia, the ASX 200 recouped earlier losses, while shares of major mining companies rose as Rio Tinto gained 2.12% and BHP added 2.13%.
Facebook shares plunge more than 20% on weak earnings
Shares of Facebook fell more than 20% in extended trading Wednesday after the company reported disappointing earnings, gave a weak outlook and said user growth is stagnant. Facebook said first-quarter revenue will be between $27 billion and $29 billion, while analysts had expected revenue of $30.15 billion, according to Refinitiv. That would represent 3% to 11% year-over-year growth. Meta said its Family of Apps posted fourth-quarter revenue of $32.79 billion and operating income of $15.89 billion. The Reality Labs segment posted revenue of $877 million in the quarter with an operating loss of $3.3 billion.
PayPal shares close down 24% on worst trading day ever
Shares of PayPal closed down 24% Wednesday, a day after the company issued weak guidance that it blamed in part on inflation. PayPal reported mixed fourth-quarter results. Earnings per share were $1.11 (excluding special items), below expectations of $1.12, but revenue beat estimates, coming in at $6.92 billion versus $6.87 billion, according to Refinitiv. However, the company also said it expects first-quarter non-GAAP earnings per share of 87 cents, compared with analysts’ expectations of $1.16. For the full year 2022, the company expects revenue growth of 15% to 17% on both a spot and constant currency basis. Analysts expected 2022 revenue growth of 17.9% year over year.