Check out the companies making headlines in premarket trading. Hershey — Shares were down 7% in the premarket after the chocolate maker posted second-quarter results that missed analyst expectations. The company earned $1.27 per share on revenue of $2.07 billion. Analysts polled by LSEG expected a profit of $1.43 per share on revenue of $2.31 billion. “Today’s operating environment remains dynamic with consumers pulling back on discretionary spending,” CEO Michele Buck said in a statement. Amazon — Stock in the e-commerce giant were roughly 2% higher ahead of second-quarter results after the closing bell on Thursday. Analysts polled by FactSet forecast earnings per share of $1.03 on $148.6 billion in revenue. Etsy — The e-commerce stock dipped more than 1% after posting mixed quarterly results. Etsy topped revenue expectations, but adjusted earnings came in at 41 cents per share, missing the consensus estimate of 45 cents per share, per LSEG. Shake Shack — Shares were up nearly 9% in the premarket after the burger restaurant chain posted its second-quarter results. The company reported revenue of $316 million for the second quarter, beating an LSEG estimate of $314 million. Shake Shack also raised the lower end of its full-year revenue guidance. Meta — The tech giant saw shares surge nearly 8% in premarket trading after the company beat second-quarter estimates and issued a better-than-expected forecast for the current period. The Facebook parent company’s results point to continued share gains in the digital ad market, the company’s core business. Moderna — Shares tumbled nearly 11% after the drugmaker cut its full-year sales guidance before the bell. Moderna said it expects competition for respiratory vaccines in the U.S, lower sales in Europe and the potential for deferred international revenue. However, the company reported a revenue beat for the second quarter and narrower-than-expected loss per share. Arm Holdings — The chipmaker slid more than 9% after a disappointing earnings forecast for the fiscal second quarter. Arm expects adjusted earnings in the range of 23 cents to 27 cents per share, while analysts polled by LSEG were looking for 27 cents. Teladoc — Shares of the telehealth company pulled back more than 19% after second-quarter revenue of $642 million missed estimates. Analysts surveyed by LSEG expected $650 million. Teladoc also declined to provide its full-year outlook. Ferrari — Shares gained more than 4% after the luxury sports vehicle company beat second-quarter earnings and revenue estimates and raised its full-year outlook. Ferrari now expects full-year earnings around 7.90 euros per share, excluding items, compared to a previous forecast that called for €7.50 per share. MGM Resorts — The casino operator declined 3% despite posting second-quarter results that beat expectations. MGM reported earnings 86 cents per share on revenue of $4.33 billion, while analysts polled by LSEG expected 62 cents per share and $4.22 billion. C.H. Robinson — The logistics company climbed more than 10% on better-than-expected earnings for the second quarter. To be sure, revenue was slightly below expectations. — CNBC’s Hakyung Kim, Yun Li, Michelle Fox and Fred Imbert contributed reporting.
Check out the companies making headlines in midday trading: American Airlines — Shares slipped less than 1%, recovering from earlier losses, after the airline temporarily grounded all of its flights due to a technical issue. Broadcom — The semi stock added 2%, extending its December rally. Shares have surged more than 46% this month, propelling its 2024 gain above 112%. Big banks — Shares of some big bank stocks rose more than 1% amid news that a group of banks and business groups are suing the Federal Reserve over the annual stress tests, saying it “produces vacillating and unexplained requirements and restrictions on bank capital.” Citigroup , JPMorgan and Goldman Sachs shares gained more than 1% each. Arcadium Lithium — Shares rose more than 4% after the company announced its shareholders have approved the $6.7 billion sale to Rio Tinto . The deal is expected to close in mid-2025. International Seaways — The energy transportation provider surged 8% after an announcement that the company would be added to the S & P SmallCap 600 index, effective Dec. 30. The company will replace Consolidated Communications , which is soon to be acquired. Crypto stocks — Shares of stocks tied to the price of bitcoin rose as the cryptocurrency gave back recent losses amid a climb in tech names broadly. Crypto services provider Coinbase gained almost 3% and bitcoin proxy MicroStrategy gained more than 5%. Miners Riot Platforms and IREN gained 6% and 4%, respectively. U.S. Steel — The steel producer’s stock hovered near the flatline amid news that President Joe Biden will decide on the fate of its proposed acquisition by Japan’s Nippon Steel after a government panel failed to reach a decision . Apple — Apple shares gained 0.9% to notch a new all-time high. The stock has rallied nearly 34% year to date. — CNBC’s Sean Conlon, Lisa Han, Tanaya Macheel and Alex Harring contributed reporting.
A general view of the Federal Reserve Building in Washington, United States.
Samuel Corum | Anadolu Agency | Getty Images
The biggest banks are planning to sue the Federal Reserve over the annual bank stress tests, according to a person familiar with the matter. A lawsuit is expected this week and could come as soon as Tuesday morning, the person said.
The Fed’s stress test is an annual ritual that forces banks to maintain adequate cushions for bad loans and dictates the size of share repurchases and dividends.
After the market close on Monday, the Federal Reserve announced in a statement that it is looking to make changes to the bank stress tests and will be seeking public comment on what it calls “significant changes to improve the transparency of its bank stress tests and to reduce the volatility of resulting capital buffer requirements.”
The Fed said it made the determination to change the tests because of “the evolving legal landscape,” pointing to changes in administrative laws in recent years. It didn’t outline any specific changes to the framework of the annual stress tests.
While the big banks will likely view the changes as a win, it may be too little too late.
Also, the changes may not go far enough to satisfy the banks’ concerns about onerous capital requirements. “These proposed changes are not designed to materially affect overall capital requirements, according to the Fed.
The CEO of BPI (Bank Policy Institute), Greg Baer, which represents big banks like JPMorgan, Citigroup and Goldman Sachs, welcomed the Fed announcement, saying in a statement “The Board’s announcement today is a first step towards transparency and accountability.”
However, Baer also hinted at further action: “We are reviewing it closely and considering additional options to ensure timely reforms that are both good law and good policy.”
Groups like the BPI and the American Bankers Association have raised concerns about the stress test process in the past, claiming that it is opaque, and has resulted in higher capital rules that hurt bank lending and economic growth.
In July, the groups accused the Fed of being in violation of the Administrative Procedure Act, because it didn’t seek public comment on its stress scenarios and kept supervisory models secret.