S&P 500 Is Flat in Volatile Trading as Traders Evaluate Major Earnings From Netflix, Morgan Stanley: Live Updates

Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange (NYSE), April 10, 2023.
Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange (NYSE), April 10, 2023.

The S&P 500 traded flat on Wednesday as another loaded earnings day kicked into full gear and investors parsed the latest results from companies including Netflix and Morgan Stanley.

The benchmark index inched marginally higher, while the Nasdaq Composite inched 0.2% higher. The Dow Jones Industrial Average lost 108 points, or about 0.3%.

While many of the companies reporting in the last day topped analysts' low-bar estimates, traders found something wrong within the results to send the stocks lower. A lack of forecasts from the major companies also left investors on edge with the Federal Reserve set to raise interest rates again in a couple weeks and recession fears swirling.

"The market's really been sort of ho-hum in this earnings season so far," said Sandi Bragar, Aspiriant's chief client officer. "We've been concerned about shrinking corporate profits and earnings going lower, and that is starting to play out certainly in companies that have reported so far, but the market hasn't really been reacting too much to that."

Netflix shares fell 4% as the streaming giant disappointed investors by pushing back plans to clamp down on password sharing. In its latest quarter, Netflix beat analysts' expectations on earnings per share, and added more subscribers than expected, but fell short of revenue estimates.

Earnings from major banks institutions wrapped up with Morgan Stanley, with shares last up 0.6%. Despite strong results, the stock initially traded down{

Morgan Stanley shares reverse course

Morgan Stanley shares rallied into the green during afternoon trading after spending much of the day in negative territory, with the stock last up about 0.8%.

Despite strong results, the stock opened lower to start the trading session as higher costs hurt profit margins within Morgan Stanley's investing bank and wealth united, according to Wells Fargo analyst Mike Mayo. By excluding the bank's lower tax rate, Morgan Stanley would have missed EPS expectations, he added.

— Samantha Subin

Investors have been closely monitoring the industry after bank failures last month spurred fears that contagion would spread.

Even so, the market response has been "fairly benign" to most of the economic and financial news coming in, said LPL Financial's Quincy Krosby. Equities, she added, are in a "seesaw trade," with winners and losers shifting by the day.

"It hasn't really made a decision as to whether or not the price action is going to win out," she said.

So far this week, trading has been choppy as investors evaluate a rush of earnings. Wall Street this season is on the hunt for signs of weakening demand and conditions likely to put a damper on profitability into the back half of 2023, said Barclay's Emmanuel Cau in a note to clients.

"Overall, Q1 earnings may not move the needle much, in our view," he said. "However, stocks have rallied, but positioning remains cautious, so more earnings-driven upside would extend the pain trade."

Earnings continue after the bell with dominant electric vehicle maker Tesla. Results from IBM and Las Vegas Sands are also due.

Bank of America lifts Nvidia price target, cites A.I. 'inflection'

Bank of America sees more upside in store for shares of Nvidia as artificial intelligence hits an "inflection" point and companies rely on stronger computing power.

Analyst Vivek Arya lifted his price target on the semiconductor stock to $340 from $310 a share, reflecting about 23% upside from Tuesday's close. And should Nvidia maintain its current 75% AI share, the upside could prove even greater, he added.

Nvidia should benefit in particular from the shift away from traditional central processing units to graphic processing units, forecasting the latter to grow ten times faster, Arya said.

"Surging AI workloads in cloud/enterprise data centers could shift more computing horsepower/value towards specialized accelerators," he wrote.

Given this setup, Arya also lifted 2027 earnings power estimates toward the $17 mark from $14.

So far this year, Nvidia shares have outperformed, surging more than 90% as Wall Street bets on its major stake in the AI race. The stock plummeted more than 50% in 2022.

"With a positive impact broader data center demand from AI, we believe the company can see indirect benefits across its networking segment as well," he added.

— Samantha Subin

Cathie Wood says her innovation darlings could emerge as new market leaders

Ark Invest's Cathie Wood believes her innovation darlings are poised to outperform if inflation eases at a faster pace than expected.

"If we are correct in our assessment that growth, inflation, or both will surprise on the low side of expectations, scarce double-digit growth opportunities should be rewarded accordingly," Wood said in her quarterly commentary.

The investor said tumultuous environment typically forces companies to adopt new technologies to be more efficient, and as a result, stocks of disruptive companies tend to emerge as new market leaders toward the end of a bear market.

Her flagship Ark Innovation ETF is up about 25% this year, compared to an 8% gain for the S&P 500.

— Yun Li

3 Investing Club stocks just hit 52-week highs. Here's where we stand on them now

Three Club holdings — Salesforce (CRM), Linde (LIN) and Nvidia (NVDA) — reached their highest levels of the past 12 months in Tuesday's session, a milestone Wall Street generally sees as encouraging.

At the same time, however, some investors may be wondering whether hitting a new 52-week high might signal that it's time to take some profits.

Investing Club subscribers can read the full story here on how Jim Cramer and his analysts are thinking about these three stocks going forward.

So far, first-quarter earnings are beating market fears

Earnings season has kicked off on a positive note, with 10% of the broader index reporting better-than-expected earnings. Of the 53 companies in the S&P 500 reporting so far, 83% have beat Wall Street's expectations by 6%. Both of those rates are above average.

The broad-based index has seen a modest uptrend in the last few weeks, gaining 7% since it reached a bottom at the height of the banking crisis in mid-March.

— Pia Singh

Fed's 'Beige Book' notes stresses from banking troubles

The banking crisis in March took its toll on financial activity, particularly in the New York and San Francisco regions, according to the Federal Reserve's periodic economic review released Wednesday.

Since the last release, on Jan. 18, of the Fed's "Beige Book," banking and in some cases commercial real estate saw a substantial pullback of activity." That followed the collapse of Silicon Valley Bank and two other institutions due to a run on deposits.

"Lending volumes and loan demand generally declined across consumer and business loan types" nationally, the report noted.

In the San Francisco area, "Residential and commercial real estate activity fell, and lending activity declined substantially," while "Lending activity decreased substantially. Communities across the Twelfth District faced heightened challenges in their ability to provide food, shelter, and services due to credit constraints and reduced philanthropic giving."

In New York, "Conditions in the broad finance sector deteriorated sharply coinciding with recent stress in the banking sector."

Fed lending facilities put into place have helped stem some of the damage from the failure of SVB and ensuing bank stress.

The report otherwise noted only that overall economic activity was little changed since the last filing.

—Jeff Cox

Morgan Stanley shares reverse course

Morgan Stanley shares rallied into the green during afternoon trading after spending much of the day in negative territory, with the stock last up about 0.8%.

Despite strong results, the stock opened lower to start the trading session as higher costs hurt profit margins within Morgan Stanley's investing bank and wealth united, according to Wells Fargo analyst Mike Mayo. By excluding the bank's lower tax rate, Morgan Stanley would have missed EPS expectations, he added.

— Samantha Subin

Bowlero shares rise after Jefferies initiates buy rating

Shares of Bowlero were up 6.3% Wednesday after Jefferies initiated a buy rating on the stock.

 Bowling is the largest participatory sport in the U.S., the firm noted, with more than 70 million annual participants — roughly three times more than golf. 

"Bowlero is the leader in the highly fragmented bowling industry, with 327 locations, or >20x the nearest competitor. We believe Bowlero's size gives it a significant advantage over competitors in terms of brand awareness and economies of scale (i.e. food costs)," analyst Randal Konik wrote. 

"As the company continues to consolidate the U.S. bowling industry (via new acquisitions and greenfield builds) and grows its brand awareness, we see a substantial opportunity for top- and bottom-line growth ahead," Konik added.  

CNBC Pro subscribers can read more about the buy rating here.

— Hakyung Kim

Stocks making the biggest moves in midday trading

These stocks are among those making the biggest moves in midday trading:

  • Netflix — Shares of the streaming giant fell about 4% after the company posted a small revenue miss. Netflix posted a quarterly revenue of $8.16 billion, slightly below the $8.18 billion expectation per Refinitiv. Its earnings per share did beat estimates. Netflix also said it delayed the broad rollout of its password-sharing crackdown.
  • Western Alliance, Zions Bancorporation — Shares of Western Alliance jumped nearly 21% on Wednesday after the regional bank said its deposits have been rebounding in April after declining 11% in the first quarter. Wedbush upgraded the beaten-down stock to outperform after Western Alliance's quarterly report, despite the bank's net income declining by more than 50% from the previous quarter. Other regional bank stocks gained during Wednesday's trading session. Zion rose 4.3% ahead of its earnings report after the bell. Shares of Regions Financial and Comerica added 1.5% and 2.9%, respectively.
  • Rivian Automotive— The stock dropped nearly 3.5% following a downgrade sector perform from outperform by RBC Capital Markets. The Wall Street firm slashed Rivian's price target to $14 from $28 per share, and said it sees limited catalysts to accelerate profitability in the near term.

Click here to see more stocks making midday moves.

— Pia Singh

Abbott shares jump after company posts earnings beat, reaffirms guidance

Abbott Laboratories gained 6.5% after beating expectations on earnings and reaffirming future guidance.

The medical device company reported $1.03 in earnings per share for the first quarter, beating the 99 cents expected by analysts polled by FactSet. Abbott also beat expectations for revenue, posting $9.75 billion against the $9.67 billion consensus estimate.

Abbott said adjusted earnings per share should still be between $4.30 and $4.50 for the year, a range that encompasses the consensus estimate of $4.39.

— Alex Harring

McDonald's Tractor Supply and General Electric among stocks reaching 52-week highs

Eleven stocks in the S&P 500 hit highs in Wednesday's trading session not seen in at least a year:

  • McDonald's trading at all-time highs back to its IPO in 1965
  • Tractor Supply trading at all-time highs back to its IPO in 1994 after being taken private by an LBO in 1982
  • YUM Brands trading at levels not seen since January 2022
  • Lamb Weston Holdings trading at its highest levels back to its IPO in Nov, 2016
  • Arch Capital Group trading at all-time high levels back to when it began trading on the NASDAQ in 2000
  • Arthur J. Gallagher trading at all-time high levels back to its IPO in June 1984
  • Boston Scientific trading at all-time high levels back to its IPO in May 1992
  • GE Healthcare Technologies trading at all-time highs back to its spinoff from GE in December 2022
  • Stryker trading at all-time high levels back to its IPO in 1979
  • Zimmer Biomet trading at levels not seen since November 2021
  • General Electric trading at levels not seen since January 2018

Meanwhile, satellite provider Dish Network was trading at lows not seen since March 1999. Altice USA and communications company Lumen, which trade outside of the S&P 500, reached lows not seen since 2017 and 2008, respectively.

Other stocks reaching new 52-week highs include Deckers Outdoor, First Citizens BancShares and shoe brand Sketchers, with Deckers Outdoor trading at levels not seen since its IPO in October 1993. First Citizens Bancshares was trading at its highest point since its reorganization in 1986.

— Hakyung Kim, Chris Hayes

UBS says this energy giant is the ‘leader of the pack’ and set to jump more than 20%

UBS analyst Josh Silverstein said this energy giant is well positioned and can outpace its peers, upgrading shares to buy from neutral.

"We see the Integrated Oils as best positioned to outperform this upcycle, driven by improved balance sheets and significantly more capital efficient asset bases that generate higher FCF with greater visibility to support consistent shareholder returns," Silverstein wrote to clients on Tuesday.

— Sarah Min

Analysts say Netflix’s password crackdown could reaccelerate growth, though concerns linger

Netflix's mixed quarterly results had something for the bulls and the bears, as analysts weighed their outlook on the streaming service against a delay in the password sharing crackdown and lackluster guidance. 

The company originally planned a move on sharing in the first quarter, but on Tuesday the firm said it pushed it back to the second quarter, saying "some of the expected membership growth and revenue benefit" will fall later as well. 

Second-quarter guidance also came in lighter than the Refinitiv consensus.

For UBS analyst John C. Hodulik, the mixed earnings results did not change what he expects is an improving competitive backdrop for Netflix.

Hodulik upgraded Netflix to buy from neutral, saying he expects growth will inflect with double-digit profit growth and rising free cash flow. What's more, he said restricting password sharing could become "meaningfully accretive" for Netflix as soon as the third quarter.

CNBC Pro subscribers can read the full story here.

— Sarah Min

Hot inflation reading in UK boosts case for Fed rate hike

Hotter-than-expected inflation data in the UK reported Wednesday is helping seal the case for another, and perhaps final, Federal Reserve interest rate increase in a few weeks.

The consumer price index fell to an annual rate of 10.1% in March, below the 10.4% in the previous month but above the 9.8% forecast. Following the data, the UK was the only European country to still have double-digit inflation.

Traders slightly increased their bets that the U.S. central bank would approve a 0.25 percentage point interest rate hike when it next meets May 2-3. The probability now is up to about 83%, slightly higher than Tuesday and above the 70% level from a week ago, according to CME Group estimates.

However, markets still expect the Fed to cut its benchmark rate by half a point before the end of the year.

—Jeff Cox

RBC downgrades this once-hot EV maker and slashes price target by 50%

RBC Capital Markets said it's time to step to the sidelines on this automaker, saying "near-term we see limited catalysts to accelerate profitability and believe margins will remain constrained." The once-hot electric vehicle stock was downgraded to sector perform from outperform.

— Sarah Min

Energy stocks fall as oil prices decline

Energy stocks fell Wednesday and oil prices declined around 2%, with the S&P 500 sector tracking these companies last down about 1%.

The biggest decliners included Valero Energy, APA Corporation and Hess, last down 3.4%, 2.4% and 2.2%, respectively. Marathon Petroleum and Phillips 66 also dropped about 2% each.

Baker Hughes bucked the overall downtrend in energy stocks, gaining 2.1%. The oilfield firm topped Wall Street's profit and revenue expectations, according to FactSet.

— Samantha Subin

VIX hovers near its 52-week low

The Cboe Volatility Index, known as the VIX, was little changed Wednesday at 16.79, hovering near its 52-week low of 16.58 reached in January 2022. The Wall Street's fear gauge matched that low during Tuesday's session.

The index gets its value derived from option prices on short-term bets being made on the S&P 500. A rising value means investors are growing more fearful and a falling value means they are getting more confident.

The VIX briefly topped the 30 level in mid-March at the height of the banking turmoil and has traded under the 20 threshold in April.

— Yun Li

Utility stocks outperform in morning trading

Utility stocks were the clear stars of the S&P 500 in Wednesday morning trading.

The sector of the S&P 500 was up 0.8%. Health care was the only other of the index's 11 sectors to trade in the green with a relatively modest 0.2% advance. The S&P 500 as a whole was down around 0.4%.

Alliant Energy and CMS Energy led the utilities sector up with each gaining around 1.8%. Sempra Energy was the next best performer in the sector, adding 1.4%.

— Alex Harring

Technology stocks fall

Technology stocks showed signs of early weakness Wednesday, with the S&P 500's information technology and communication services sectors housing many popular names last down 0.8% and 1.1%, respectively.

Netflix led some of the sector's losses, last down 4% as the streaming giant posted mixed results and pushed out plans to mitigate password sharing. The streaming giant was the biggest drag on communications services, followed by Fox and Walt Disney, falling more than 2% each.

Microsoft and Alphabet each declined 1%, while Meta Platforms moved 1.7% lower. Tesla, slated to report earnings after the bell, lost 2.7%.

Amazon was the only major big technology player in the green, last up about 0.6% amid news of job cuts in its advertising unit.

— Samantha Subin

Stocks open lower as earnings roll in

Major averages opened lower Wednesday as a new round of corporate earnings releases trickled in.

The S&P 500 lost 0.4%, while the Nasdaq Composite dropped 0.55%. The Dow Jones Industrial Average lost 124 points, or about 0.4%.

— Samantha Subin

Morgan Stanley falls on weak margins, Wells Fargo says

Morgan Stanley's adjusted first-quarter earnings per share may have beat analysts' estimates, but the bank saw weak margins in the quarter, Wells Fargo analyst Mike Mayo said Wednesday.

Shares fell more than 4% in premarket trading after Morgan Stanley posted earnings.

"ICS pretax margin declined 860bp YoY due to higher comp and non-comp. Wealth NII missed and pretax margin declined 100bp YoY, despite 11% revenue growth - though client asset flows rebounded," Mayo wrote. "Asset mgt revenues missed, flows were negative and pretax margin declined 660bp YoY as the segment continues to struggle."

Mayo also noted that excluding the bank's low tax rate, earnings per share would have missed estimates.

— Michelle Fox

Contrarians beware. Investors Intelligence survey is getting more bullish

The percentage of bullish opinion in the latest weekly survey by Investors Intelligence of financial newsletter editors climbed above 50% — to 50.7% to be exact — an 18-month high (Nov. 2021), from 48.7% last week.

That can act as a red flag, (or maybe a cherry or rose flag) for investors. Rising bullishness connotes more risk and rising bearish opinion suggests less risk in the market.

Bearish opinion on stocks dipped to 24% of advisors from 24.3% last week, while the "correction" camp (short-term weakness) slipped to 25.3% from 27% last week.

The so-called "bull-bear spread" widened further, to 26.7 points from 24.4 last week, and stayed positive for a 22nd straight week. What's more, the spread has remained above 20 points for three consecutive weeks, "which calls for closer attention," Investors Intelligence said. "The wider the positive spread the higher the risk."

— Scott Schnipper

Stocks making the biggest moves premarket

Check out the companies making headlines before the bell.

United Airlines — The airline lost 0.9% in the premarket after it announced a net loss for the first quarter. United posted a loss of 63 cents per share, which is 10 cents smaller than the 73-cent estimated loss from analysts polled by Refinitiv. The company reported $11.43 billion in revenue, slightly above the $11.42 billion estimated. 

Netflix – Shares of the streaming giant fell more than 2% after the company reported mixed results on the delayed rollout of its crackdown on password-sharing, which was originally scheduled for the first quarter. Revenue came in slightly below the analyst consensus from Refinitiv, although earnings topped estimates.

Western Alliance — Shares of the beaten-down regional bank jumped more than 20% in premarket trading after Western Alliance said its deposits have been rebounding in April after declining 11% in the first quarter. Wedbush upgraded the stock to outperform after Western Alliance's quarterly report despite the bank's net income falling more than 50% from the previous quarter.

ASML Holding – Shares of the chipmaker lost 2.6% in early morning trading after the company reported net bookings for the first quarter were down 46% year-over-year on "mixed signals" from customers as they work through inventory. The shares fell despite ASML reporting an earnings beat for the quarter.

Check out the full list here.

— Hakyung Kim

Bitcoin and ether drop below key levels reached in last week's rally

Crypto prices pulled back on Wednesday after a big rally last week.

The price of bitcoin was last lower by about 3% and trading at $29,202.54, while ether fell 5% to $1,977.28, according to Coin Metrics.

Market participants had expected a pullback in prices this week due to the big up move last week and the low liquidity in the market since the banking crisis. Many still see crypto in a firm upward trend, however.

Investors this week are digesting new inflation data from the U.K. and weighing the prospect of more interest rate hikes there as well as in the U.S. They're also watching a pair of Congressional hearings – one on the SEC's approach to crypto on Tuesday and another on stablecoins set for Wednesday.

For more on what's driving crypto Wednesday check out our full story here.

— Tanaya Macheel

ASML shares fall more than 2% premarket

Shares of chipmaker ASML lost 2.6% in early morning trading even after the company posted an earning beat for the first quarter.

ASML reported a decrease in net bookings for the first quarter of 46% year-over-year, citing "mixed signals" from customers as they work through inventory.

The negative reaction also follows more negative news from the chip space – including Micron, which posted its worst quarter in history and Samsung, whose recent first-quarter profit hit an 8-year low.

— Kristina Partsinevelos, Tanaya Macheel

Morgan Stanley shares fall despite better-than-expected results

Morgan Stanley posted earnings per share of $1.70 for the first quarter, greater than the $1.62 estimate from analysts polled by Refinitiv. Overall revenue came in at $14.52 billion, above the $13.92 billion consensus estimate from Refinitiv as equities and fixed income trading units performed better than expected.

One growth area was wealth management, where revenue increased by 11% from a year ago.

The shares, which are outperforming most other banks this year, eased by 2% in early trading despite the positive results.

"The investments we have made in our wealth management business continue to bear fruit as we added a robust $110 billion in net new assets this quarter," said Chairman and CEO James Gorman in the earnings release. "Equity and fixed income revenues were strong, although investment banking activity continued to be constrained."

-John Melloy

Travelers' stock rises on strong first-quarter results

Shares of Travelers gained 4% before the bell after the insurance company surpassed Wall Street's expectations on both the top and bottom lines.

The Dow member reported adjusted earnings of $4.11 a share on $9.40 billion in net written premiums. Refinitiv estimates called for EPS of $3.55 and net premiums of $9.19 billion.

Travelers' quarterly profit declined year-over-year as the company grappled with higher catastrophe losses amid a period of heightened severe weather incidents.

— Samantha Subin

Mortgage demand falls 10%

Mortgage applications to buy a home declined by 10% last week, according to the Mortgage Bankers Association's seasonally adjusted index.

At the same time, the average contract interest rate for a 30-year fixed-rate mortgage with conforming loan balances rose to 6.43%, up from 6.30% the week prior.

Elsewhere, applications to refinance a home loan fell 6% for the week, and declined 56% year over year.

— Diana Olick, Samantha Subin

Europe stock markets open lower

Europe's benchmark Stoxx 600 index was down 0.22% in early trade, with tech stocks leading losses to fall 1.2%.

The index hit a 14-month high on Tuesday.

The U.K.'s FTSE 100 was down 0.3% and Germany's DAX fell 0.2%, though France's CAC 40 had a narrow gain of 0.05%.

— Jenni Reid

UK inflation ahead of expectations at 10.1%

U.K. inflation unexpectedly held above 10% in March, fueling expectations the Bank of England will hike by 25 basis points at its May meeting.
Bloomberg | Bloomberg | Getty Images
U.K. inflation unexpectedly held above 10% in March, fueling expectations the Bank of England will hike by 25 basis points at its May meeting.

U.K. inflation unexpectedly held above 10% in March, fueling expectations the Bank of England will hike by 25 basis points at its May meeting after pay growth slowed by less than expected.

The consumer price index came in at 10.1%, down from 10.4% in February but ahead of the dip to 9.8% expected by economists polled by Reuters.

Downward moves were driven by motor fuels, and housing and household services, while food and recreation/culture became more expensive.

Prices were up by 0.8% month on month.

Core CPI, excluding energy and food, was unchanged at 5.7%.

— Jenni Reid

Malaysia trade falls slightly in March, imports come in lower than expectations

Malaysia's total trade in March came in at RM232.7 billion ($52.51 billion), 1.6% lower as compared to the total value of RM236.5 billion seen in the same month of preceding year.

While exports from the country dropped by 1.4% year on year to RM129.7 billion in March, smaller than the 3.5% fall anticipated by economists, imports posted a surprise as it recorded a fall of 1.8% to RM103 billion, compared to a 1.9% growth expected.

Malaysia said this was due to imports of intermediate goods falling by 8.7% in March compared to a year ago.

The country's trade balance climbed 0.2% year on year to a surplus of RM26.7 billion, higher than economists expectations of RM21.1 billion.

— Lim Hui Jie

JPMorgan, Citi, UBS upgrades full-year forecasts for China

Analysts at JPMorgan, Citi and UBS raised their full-year forecasts for China's economy after it delivered an impressive first-quarter gross domestic product growth of 4.5% on Tuesday.

JPMorgan raised its 2023 growth outlook to 6.4%, up from a previous forecast of 6%, saying the latest quarterly report points to further growth ahead.

Citi economists also raised its full-year outlook to 6.1% from 5.7% year-on-year, saying China's consumption recovery is "halfway."

UBS also raised its forecast for the year from 5.4% to 5.7%, saying "given the stronger-than-expected recovery in Q1 2023, driven by both a robust rebound in consumption and property."

– Jihye Lee

Yellen to lay out U.S. economy priorities on China in speech: Reuters

U.S. Treasury Secretary Janet Yellen will deliver in a speech the economic priorities for the U.S. on China, Reuters reported.

"During her remarks, Secretary Yellen will underscore that in its bilateral relationship with China, the United States proceeds with confidence about the enduring fundamental strength of our economy," Reuters said, citing a statement from the Treasury Department.

This comes after Yellen said that the U.S. will resume economic talks with China "at an appropriate time" earlier this year as Beijing continues to sell its vast stock of U.S. Treasurys.

Yellen will deliver a speech at Johns Hopkins University's School of Advanced International Studies on Thursday, the report said.

– Jihye Lee

Japan's Sumitomo Financial to become first major bank to issue $1 billion of AT1 bonds: Nikkei

Japan's Sumitomo Mitsui Financial Group is set to become the first major bank to issue Additional Tier 1 bonds since the banking turmoil suffered by Swiss lender Credit Suisse, Nikkei reported.

SMFG will issue 140 billion yen ($1 billion) of these bonds, commonly known as AT1 bonds. They are considered a relatively risky form of junior debt, therefore come with a higher yield and are often bought by institutional investors.

Confidence in AT1 bonds were shaken after Swiss authorities forced the Credit Suisse to write down the value of its AT1 bonds to zero as part of a government-orchestrated rescue by its bigger rival UBS.

Nikkei said the terms of SMFG's offer will be decided on Wednesday, adding that its AT1 bonds will carry a spread of 171 basis points over government debt, representing an increase of 33 basis points from the previous issuance in December.

SMFG shares were trading 0.25% up on Wednesday.

— Lim Hui Jie

Western Alliance surges after reporting first-quarter earnings report

Regional bank stock Western Alliance popped 13% in extended trading after the company said in its first-quarter that deposits have stabilized since last month's collapse of Silicon Valley Bank.

Western Alliance said it had $47.6 billion in deposits at the end of March, down about 11% from $53.6 billion at the end of December. The bank said it saw non-interest bearing deposits and savings and money market accounts decline, but deposits in interest-bearing accounts and certificates of deposits increased.

Those deposit issues may have been less than some investors feared, and Western Alliance said things have been improving. The company said that it added another $2 billion in deposits in the first two weeks of April, and that more than 70% of its deposits are insured.

The bank's net revenue of $552 million did miss analyst estimates of $666 million, according to Refinitiv, and net income of $142.2 million was down more than 50% from the fourth quarter.

Shares of Western Alliance were down 45% year to date as of Tuesday's close.

— Jesse Pound

Stock futures are little changed as earning season continues

Stock futures were mostly flat Tuesday with all three major indexes heading lower.

Futures tied to the Dow Jones Industrial Average slipped 23 points, or 0.06%, while S&P 500 futures lost 0.05% and Nasdaq futures pulled back 0.12%.

— Brian Evans

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