Premarket action on Wednesday had the three major U.S. indexes trading lower. The Dow Jones industrials were down 0.05%, the S&P 500 down 0.06%, and the Nasdaq 0.02% lower.

All 11 market sectors closed lower on Tuesday, hammered by geopolitical news. Consumer cyclicals (−3.34%) and technology (−2.4%) gave up the most. Energy (−0.31%) and consumer staples (−0.34%) gave up the least. The Dow closed down 2.06%, the S&P 500 down 2.00% and the Nasdaq down 2.50%.

Two-year Treasuries closed up seven basis points at 4.67% on Tuesday, and 10-year notes jumped 13 basis points to close at 3.95%. In Wednesday’s premarket, two-year notes were trading at around 4.70% and 10-year notes at around 3.95%.

Oil traded down about 0.2% Tuesday, and traded it down by 1.4% early Wednesday morning at $75.29.

Tuesday’s trading volume was right around the five-day average. New York Stock Exchange losers outpaced winners by 2,721 to 384, while Nasdaq decliners led advancers by about 4 to 1.

The minutes of the January Federal Open Market Committee meeting will be released Wednesday afternoon. Market action is likely to be somewhat muted until then.

On Thursday, the weekly petroleum and natural gas inventory reports will be released, along with the weekly report on new claims for unemployment benefits. The second estimate of fourth-quarter gross domestic product is also due before markets open on Thursday. The monthly report on personal consumption expenditures is on tap for Friday morning.

Among S&P 500 stocks, General Mills Inc. (NYSE: GIS) added 4.42%% on Tuesday after announcing improved guidance at a conference in New York. The home of the Pillsbury doughboy raised fiscal 2023 earnings guidance from a prior range of 4% to 6% to a new range of 7% to 8%. General Mills also guided full-year organic net sales growth to around 10%, up from a prior range of 8% to 9%.

Manufacturing company Nordson Corp. (NASDAQ: NSDN) dropped 13.93% after reporting fiscal first-quarter results that were lower than expected. Company executives also noted that new orders had fallen in recent weeks and some customers were delaying delivery dates into the second half of the year.

China’s leading search engine, Baidu Inc. (NASDAQ: BIDU), beat consensus estimates when it reported quarterly results Wednesday morning. The better news was an announced $5 billion share buyback that will run through 2025. Ernie, the company’s AI chatbot, will be released next month, and the company plans to integrate the capability into its search, cloud computing and autonomous driving offerings.
CEO Robin Li said that the Chinese market for AI “is on the verge of experiencing explosive growth in demand, releasing unprecedented and exponential commercial value.” The AI explosion is certain to lead to a rush of new marketing positions and slide presentations for any company that can think of a way to latch onto it. Baidu’s stock was up about 7.7% in premarket trading on Wednesday.

Coinbase Global Inc. (NASDAQ: COIN) traded down about 1.5% in the premarket after a bigger-than-expected per-share loss in the fourth quarter. Revenue beat the consensus estimate but fell by nearly 75% year over year. Looking ahead, the company said that it would be focused on the regulatory environment this year and it did not rule out further layoffs in its quest to post positive adjusted EBITDA “in all market conditions.”

The topper in Wednesday’s premarket has to be AMC Entertainment Holdings Inc. (NYSE: AMC). On Tuesday, the Allegheny County (Pennsylvania) Employees’ Retirement System sued the company for increasing the number of shares outstanding without getting the approval of current shareholders. Shares added nearly 17% Tuesday. So much for being afraid of lawsuits.

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We discussed the company’s plan for its end-run around shareholders earlier this month. Essentially, AMC authorized 1 billion preferred equity units (NYSE: APE) that have the same economic and voting rights as 100 shares of AMC’s common stock. Existing shareholders were given 1/100th of a preferred share for each common share they owned. AMC also sold APE shares to raise cash, and a hedge fund (Antara Capital) bought a truckload.

Now, AMC has announced a shareholders’ meeting for March 14 at which shareholders will get a chance to vote on increasing the number of authorized shares of common stock. Sort of. Shareholders are being asked to approve a 1-for-10 reverse common stock split “to enable conversion of AMC preferred equity units into shares of common stock.” Immediately after the reverse split is approved, the conversion of APE shares into common stock will take place, and then common shareholders will get to vote on increasing the number of common shares outstanding.

Holders of APE shares are virtually certain to vote their shares to increase the number of authorized shares AMC may issue. That includes large APE holders like Antara Capital. AMC management has virtually guaranteed the outcome. AMC stock closed at $6.10 on Tuesday. APE shares closed at $2.21.

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