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Omar Venerio
Articles (1681) 

Dow Jones Tumbles 600 Points on Friday

United Airlines falls despite earnings beat

U.S. stocks were in the red on Friday on the back of corporate earnings. The Dow Jones Industrial Average fell 2.55% to 23,723, the S&P 500 Index declined 2.81% to 2,830 and the Nasdaq Composite Index tumbled 3.2% to 8,604.

Non-index stocks have also posted gains and losses recentlyShares of United Airlines Holdings Inc. (NASDAQ:UAL) fell more than 10% on Friday after the company announced first-quarter results on Thursday. It posted a loss of $2.5per share, which was less than analysts had anticipated. Revenue of $7.98 billion registered a 16.8% year-over-year decline and fell short of analysts expectations.

"We have been at the forefront of warning how deep of an impact we expect this crisis could have and how long we expect it could last," CEO Oscar Munoz said. "We've also led the industry in taking decisive steps to mitigate the operational and financial impacts of COVID-19, making deep schedule reductions, drastically reducing spending and aggressively raising liquidity. While we are still in the midst of this crisis, we will not hesitate to make difficult decisions we believe will ensure the long-term success of our company."

The company managed its liquidity by raising $4.0 billion in new funds through three secured term loan facilities, new aircraft financings and an equity offering. It also reduced its planned full-year adjusted capital expenditures by $2.5 billion, so the expected full-year adjusted capital expenditures will be below $4.5 billion.

Moreover, it has also received funds from the government, entering into an agreement to receive approximately $5.0 billion from the U.S. Treasury Department in the form of a $3.5 billion grant and a $1.5 billion 10-year loan. Those funds will be designated to protect the salaries and benefits of employees until September.

Several hedge fund managers were long at the end of December. Philippe Laffont established a new position of 7,824 shares. Ray Dalio invested in 11,339 shares. Joel Greenblatt (Trades, Portfolio) boosted his holding by 149% to 237,333 shares and Jim Simons (Trades, Portfolio)' Renaissance Technologies beefed up its stake by 33% to 3,342,743 shares.



Global markets

The main European stock markets traded in the redThe U.K.'s FTSE 100 fell 2.34%, France's CAC 40 declined 2.12%, Germany's Dax retreated 2.22% and Spain's Ibex 35 slumped 1.89%.

In Asia, Japan's Nikkei 225 fell 2.84%, India’s BSE Sensex rose 3.05%, Hong Kong's Hang Seng swelled 0.28% and China's Shanghai Composite advanced 1.33%.

Disclosure:The author holds no positions in any stocks mentioned.

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About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor and Area Head of Finance. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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