Video game firms lead dip in stocks
NEW YORK — A mixed bag of corporate earnings nudged U.S. stocks slightly lower Wednesday, snapping the market's five-day winning streak.
Communications sector stocks, led by steep declines in video game companies, accounted for most of the market's slide. Take-Two Interactive and Electronic Arts plunged after reporting earnings that fell far short of what expectations. The companies also issued weak forecasts, citing tougher competition.
Gains in technology stocks offset some of those losses, with Skyworks Solutions leading a rally in semiconductor companies.
"This is an earnings-driven market, and where you've seen both positive and negative price movement today it has largely been sector and industry specific," said Paul Springmeyer, head of investments at U.S. Bank Wealth Management. "On balance, sales and earnings are really trending mostly above expectations."
More than half of the companies in the S&P 500 have already reported results for the last three months of 2018, and most have turned in earnings that beat analysts' forecasts.
"What we are seeing is earnings are in fact slowing, but they still remain positive," Springmeyer said.
GM rebounds in '18 with $8.1B gain
DETROIT — General Motors posted an $8.1 billion net profit for 2018, fueled by better prices for vehicles sold in the U.S., its most lucrative market.
It's a strong rebound from the previous year when the company lost $3.9 billion on a giant tax accounting charge.
GM made $10.8 billion before taxes in North America, down about 9 percent from 2017. But it still means big profit-sharing checks for about 46,500 union workers in the U.S. They'll get $10,750 each, less than last year's $11,500.
The company said Wednesday that it made $5.58 per share for the year. Without $2.5 billion worth of special items largely due to restructurings, the profit was $6.54, beating expectations of $6.29, according to a survey by FactSet.
Full-year revenue rose 1 percent to $147.05 billion, also topping estimates of $145 billion.
Tariffs, diesel woes hold back Daimler
FRANKFURT, Germany — Automaker Daimler said Wednesday that fourth-quarter net profit fell 49 percent to $1.87 billion as its Mercedes-Benz luxury car business was buffeted by trade conflict, diesel woes and costs for developing new models and technologies. Revenue rose 7 percent.
The luxury car division, the mainstay of its earnings, saw profitability fall as it faced multiple challenges. The U.S.-China trade war meant new import taxes on cars made in the U.S. and sold in China. Bottlenecks in getting cars certified for emissions procedures also affected the business. The operating profit margin on sales at Mercedes, a key earnings indicator, fell to 7.3 percent from 9.5 percent in the same quarter a year earlier.
The company also cited spending on new technologies such as electric and autonomous vehicles. Among other things, tighter limits on carbon dioxide emissions in the European Union from 2021 mean carmakers must add electric cars to their sales mix and get customers to buy them.
"For Daimler, 2018 was a year of strong headwinds," said CEO Dieter Zetsche.
Zetsche said the company, which makes Sprinter vans in North Charleston, has "no concrete plans" to move production of GLE and GLS sport-utility vehicles to China from its Alabama plant in order to avoid the import taxes.
New Orleans hit high for cruisers
NEW ORLEANS — The Port of New Orleans set a record for cruise ship passengers in 2018, with more than 1 million travelers.
The New Orleans Advocate reported the nearly 1.2 million cruise passengers who went through the port represented a 2.3 percent increase from 2017. Last year was the fifth consecutive year the figure was at least 1 million.
The port says it had 235 passenger ships in 2018 and is the sixth busiest cruise port in the United States.
A recent economic impact study by Louisiana State University's Business College found that cruise passengers and ship crews spend an estimated $129.1 million locally each year.
The port also set a modern-day record for Mississippi River travelers in 2018, with 30,298 passengers on the five riverboats based in New Orleans.
Port officials expect a record number of passengers next year as well because of new, larger ships set to sail in the Caribbean and on the river.
United to pursue high-fare travelers
CHICAGO — United Airlines will woo high-fare passengers by retrofitting more than 100 planes to add more premium seats on key routes.
The airline also plans to start using a new 50-seat jet with mostly premium seats on some key business-travel routes.
United announced the moves Wednesday. They are part of an industry trend to give more space and better service to high-paying passengers who account for a disproportionate share of airline revenue.
Andrew Nocella, the airline's chief commercial officer, said executives decided that United has "a shortage of business-class seats into the premium markets, and this fixed that problem."
Henry Harteveldt, an analyst at Atmosphere Research, said the move is a bold challenge to Delta Air Lines, the acknowledged front-runner among the nation's top three carriers for its on-time performance and strong profit margins.
Lyft adds an electric vehicle option
NEW YORK — Lyft passengers will soon be able to request a ride in an electric or hybrid vehicle when they're planning a trip.
The ride-hailing company is launching the feature first in Seattle and then in other cities. The option will show up when passengers are choosing between available Lyft vehicles and it will not be more expensive than taking a ride in a traditional vehicle.
Chief operating officer Jon McNeill says customers and drivers in the Pacific Northwest have been asking for greener vehicles.
Lyft is also rolling out electric vehicles in Seattle and Atlanta in its fleet of cars it rents to Lyft drivers who don't own their own vehicles.
Uber launched a feature in June that notifies passengers if they're in an electric vehicle.
Tesla trims price of Model 3 car
DETROIT — Tesla is cutting $1,100 from the base price of its car designed for the mass market, the Model 3.
The electric car company now says on its website that the car starts at $42,900, still a ways from its goal of lowering the base price to $35,000.
Tesla cut 7 percent of its workforce last month to trim costs and reduce the price of the car. CEO Elon Musk says the Model 3 must be competitive with gasoline-fueled cars for the company to succeed.
For $42,900 buyers will get a rear-wheel-drive Model 3 in black with Tesla's lower-range battery that goes 264 miles per charge.
The price doesn't include federal and state tax credits. The federal credit is now $3,750, but that expires at the end of the year.
Spotify looks to ramp up podcast game
NEW YORK — Music streaming service Spotify is buying podcast companies Gimlet and Anchor as it looks to take on Apple's popular iTunes' podcasting platform.
Gimlet Media has a podcast studio with dedicated IP development, production and advertising capabilities. Anchor has a platform of tools for podcast creators as well as an established and rapidly growing creator base.
Spotify founder and CEO Daniel Ek said in a blog post Wednesday that Spotify has become the second-biggest podcasting platform in a little less than two years.
Nick Quah of Hot Pod, a newsletter that covers the podcast industry, said the deals help Spotify branch out from music and differentiate its product. Quah also anticipates Spotify may try to monetize podcasts in the same way that it's struck deal with musical acts to upload their music directly and automatically receive royalty payouts.
Financial terms of the transactions were not disclosed. The deals are targeted to be completed in the first quarter.
Bourbon is big business in Ky.
FRANKFORT, Ky. — A new report says Kentucky bourbon is flexing more economic clout as it matures, leading a distilling industry that contributes $8.6 billion annually to the state's economy.
The study released Wednesday shows the distilling industry's economic output increased 60 percent in the past decade in Kentucky, where most of the world's bourbon is made.
It says total licensed Kentucky distilleries surged from 19 in 2009 to 68 last spring.
The report says distilling generates more than 20,100 jobs — more than double the jobs in 2009. Bourbon inventory rose more than 60 percent in the past decade.
Kentucky distillers shipped more than $452 million of their spirits abroad in 2017. Spirits makers are worried retaliatory tariffs in some key overseas markets could hurt sales. The industry-funded study was done by two economists.