Tuesday was a dim day for U.S. equities as oil lost for its seventh consecutive session on a low-volume day as Wall Street awaits the decision out of the Federal Open Market Committee (FOMC) later today. The S&P 500 Index lost 0.3%, the Dow Jones Industrial Average suffered a 0.2% setback and the Nasdaq Composite fell 0.3%.
Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) and Fogo De Chao Inc (NASDAQ:FOGO) are among a few companies moving big-time on earnings this morning, though Bank of America Corp (NYSE:BAC) might save its moving and shaking for this afternoon.
Here’s what you need to know heading into Wednesday’s trading day:
Bank of America Corp (BAC)
BAC will be among numerous financial stocks anxiously awaiting what most believe is on the way:
Another interest-rate hike from the Federal Reserve.
The Fed, in fact, is expected by many analysts to raise rates three times this year, albeit likely by just a quarter-point each time. Still, that would mean big things for banks, which traditionally benefit from higher rates, as it tends to widen the net interest margin — the difference between what banks earn on other investments and what they pay out in deposits.
Bank of America estimates that every 1-percentage-point hike in rates adds $3.4 billion to net interest income a year. That figure represents about a third of what it earned in Q4 of this year.
Hopes for several rate hikes, along with an anti-regulation Trump administration, have lifted BAC stock and other financial equities over the past few months. BofA specifically is up more than 50% since the November election. However, some believe this could be a “sell-the-news” moment for Bank of America.
Shares have leveled off a bit of late, trading roughly flat over the past week. But calls on BAC shares have been trading through the roof, at a 10-week call/put volume of just more than 4.
Fogo de Chao Inc (FOGO)
Fogo de Chao is having a strong Wednesday morning thanks to its solid earnings showing.
The Brazilian churrascaria earned 27 cents per share in its fourth quarter. On an adjusted basis, profits of 28 cents per share were a penny better than expectations. Revenues of $80.9 million were also higher than estimates, which came in at $77.3 million.
Meanwhile, the company is looking at full-year earnings to come in between 92 and 95 cents for share on revenues of $315 million to $320 million.
Other highlights of the report included a third straight year of positive U.S. comparable-store sales, and the announcement of seven new openings in 2017. Two of those openings may be international joint ventures.
FOGO shares were up 5% before Wednesday’s bell.
Arena Pharmaceuticals, Inc. (ARNA)
ARNA shares were surging by double digits after the company reported fourth quarter earnings that beat the Street.
Arena turned a 2015 Q4 loss into a $38.6 million profit last quarter, which came to 16 cents on a per-share basis — far better than expectations for a 9-cent loss. Revenues came in at $85.4 million, including $15.2 million in net product sales of Belviq.
For the full year, revenues of $124 million still ended up resulting in a $22.9 million net loss.
CEO Anit Mushi said, “In the last nine months since the arrival of the new management team, we prioritized our Phase 2 programs; strengthened our board and team to support our strategy; implemented cost reduction measures; renegotiated our agreement with Eisai; and took a methodical approach to maximizing the value of our assets.”
In response, ARNA stock was headed more than 20% higher in Wednesday’s premarket trade.