Check out the companies making headlines before the bell. Tesla – Shares of the electric vehicle maker soared nearly 13% thanks to the company’s better-than-expected profit for the third quarter. The company also expects to see vehicle growth of 20% to 30% next year, according to CEO Elon Musk. United Parcel Service – The parcel delivery stock rose more than 7% on the heels of the company’s third-quarter earnings and revenue beat. For the period, UPS earned $1.76 per share on $22.25 billion in revenue, above the LSEG consensus estimates of $1.63 per share and $22.14 billion. Lam Research – The stock rose more than 6% after the semiconductor equipment maker’s fiscal first-quarter figures beat Wall Street expectations. The company posted earnings of 86 cents per share on revenue of $4.16 billion, above the consensus estimate of 80 cents per share and revenue of $4.05 billion, per LSEG. Seadrill – Shares rose more than 9% after Bloomberg News, citing people familiar with the matter, reported the company is in merger talks with rival Transocean. A deal has not been finalized and the companies could choose to stay independent, according to Bloomberg News sources. Newmont – The stock fell more than 4% after the company posted weaker-than-expected earnings for the third quarter. Newmont posted earnings of 81 cents per share, excluding items, on revenue of $4.61 billion. Analysts polled by FactSet were expecting 86 cents per share on $4.67 billion in revenue. QuantumScape – Shares surged more than 17% after the company’s third-quarter results were in line with expectations. The lithium batter manufacturer lost 23 cents per share. T-Mobile – The stock rose more than 2% following the company’s better-than-expected third-quarter results. T-Mobile earned $2.61 per share on revenue of $20.16 billion. Analysts polled by FactSet anticipated earnings of $2.43 per share and $20.01 billion in revenue Boeing – Shares fell 3.7% after Boeing machinists rejected a new labor deal , extending a five-week strike. Mattel – The toymaker gained 2.1% even after posting mixed third-quarter results. Mattel earned $1.14 per share, excluding items, beating the LSEG consensus forecast of 95 cents per share. However, the company posted $1.84 billion in revenue for the quarter, which was modestly under the $1.86 billion figure anticipated by Wall Street. Honeywell – The stock fell about 2% after the company missed revenue estimates for the third quarter. Honeywell posted $9.73 billion, below the consensus estimate of $9.91 billion, per FactSet. Earnings, however, came in better than expected. Northrop Grumman – Shares advanced 1% after the defense company posted $7 in earnings per share for the third quarter, exceeding the consensus estimate of $6.07 a share from analysts polled by LSEG. On the other hand, revenue came in at $10 billion for the quarter, despite analysts penciling in $10.18 billion. Southwest Airlines – The stock added 1% following the airline’s third-quarter earnings report . Adjusted earnings totaled 15 cents per share, while analysts polled by FactSet expected the company to break even. Revenue was $6.87 billion, above the $6.47 billion expected. Southwest also said it is expecting higher revenue in the fourth quarter. Molina Healthcare – Shares surged 10% after the managed care company beat analysts’ expectations in its latest quarter. Molina Healthcare posted adjusted earnings of $6.01 per share, better than the LSEG consensus estimate of $5.81 in earnings per share. Revenue of $10.34 billion exceeded the forecast $9.91 billion. IBM – The stock fell more than 3% after the company missed revenue expectations for the third quarter. IBM posted $14.97 billion, below the FactSet estimate of $15.06 billion. Whirlpool – Shares popped 4% after the home appliance company topped third-quarter expectations. Whirlpool posted earnings of $3.43 per share, more than the $3.20 per share expected by analysts polled by FactSet. American Airlines – The stock fell more than 3% despite the airline topping the Street’s estimates for the third quarter . American Airlines also raised its outlook for the full year in the aftermath of its sales strategy shift. “We have taken aggressive action to reset our sales and distribution strategy and reengage the business travel community, which we’re confident will improve our revenue performance over time,” CEO Robert Isom said in an earnings release. — CNBC’s Alex Harring, Sarah Min and Michelle Fox Theobald 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.