Tesla's Lower Capex Plan, Meta's Credit Risk, American Airlines Rises
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Episode Tesla's Lower Capex Plan, Meta's Credit Risk, American Airlines Rises
Today's biggest winners and losers in the stock market, a look at the notable movers:
On this episode of Stock Movers:
- Tesla (TSLA) shares pare losses after falling as much as 3.3% Thursday as traders weigh its lower spending outlook against a profit beat and potential merger with SpaceX. BNP Paribas analyst James Picariello boosted his rating on the electric-vehicle maker to neutral from sell as the possible takeover outweighs valuation concerns. The company had been consistently short of the pace needed to hit its spending goal, particularly after a $4.73 billion outlay in the third quarter, with analysts having expected $7.95 billion on average. Tesla beat analysts’ profit estimates and touted rising customer demand for its automated-driving software, with adjusted earnings of 48 cents a share in the period, while Wall Street had anticipated 44 cents on average.
- A measure of Meta Platforms (META) credit risk hit a record high as plans to ramp up capital spending reignited fears that tech giants will issue more debt for the artificial intelligence buildout. The price of five-year credit default swaps on Meta's debt rose to around 119.3 basis points a year, the highest intraday level since the swaps started actively trading about a year ago. Meta said it has agreed to spend about $825 billion in the future on various leases and contracts, many of them related to computing power and infrastructure for artificial intelligence. Meta shares are lower.
- American Air (AAL) shares rise as the company’s broad-based third-quarter beat and guidance for better-than-expected revenue growth in the fourth quarter offset concerns about elevated fuel costs and capacity growth. American expects fuel expenses to be about $2.8 billion higher in the fourth quarter compared to a year earlier. American Air shares initially declined before turning positive in the afternoon.
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