Stock Index Roundup: Big Tech Companies Gain, NVIDIA and Financial Stocks Lagging
27 minutes ago
Dow
Salesforce (CRM) rose 4% after holding its annual shareholder meeting.
Amazon (AMZN) surpassed the $2 trillion market cap yesterday and continued to rise, up 2.2%.
Nike (NKE) rose 0.2% after the close ahead of reporting quarterly earnings.
The financial sector led the index’s decline, with Visa (V) down 2.6% and Goldman Sachs (GS) down 2.2% after the Federal Reserve’s annual bank stress test concluded that U.S. banks could weather a deep recession but would suffer bigger losses than they did a year ago.
S&P 500
Supermicro Computer (SMCI) led the index, rising 7.1%.
Cybersecurity stocks also rose, with Palo Alto Networks (PANW) up 4.8% and Arista Networks (ANET) up 3.9%.
Spice maker McCormick & Company (MKC) rose 4.3% after reporting better-than-expected quarterly profit.
Walgreens (WBA) fell 22.3% after earring sales fell short of expectations and the company cut its full-year outlook amid a weak consumer outlook. Rival CVS Health (CVS) fell 3.7%.
Micron (MU) fell 7.1% after the company reported profits that fell short of Wall Street expectations and gave a disappointing revenue outlook.
Shares in International Paper (IP) fell 7.2% after Brazilian rival Suzano called off a bid to buy the paper and pulp company.
Nasdaq 100
Cybersecurity and software stocks led the index, with ZScaler (ZS) up 5.8%, Adobe (ADBE) up 3.4% and Intuit (INTU) up 2.2%.
Nvidia (NVDA) also fell 1.9%, following a drop in AI infrastructure supplier Micron.
Levi Strauss shares plummet after slight sales shortfall
1 hour 37 minutes ago
Shares of jeans maker Levi Strauss & Co. Inc. (LEVI) fell sharply on Thursday, a day after the company reported weaker-than-expected sales and kept its earnings outlook unchanged due to weak wholesale revenue and weak demand for its Dockers brand.
The company reported second-quarter revenue rose 7.8% to $1.44 billion, slightly below the $1.45 billion expected by analysts surveyed by Visible Alpha. Adjusted earnings per share (EPS) beat expectations at $0.16.
Company executives said on a conference call with analysts that weak performance at the Dockers brand during the period hurt overall sales. “Dockers was down 1 percent on an adjusted basis, below expectations,” Chief Executive Officer Michelle Gass said.
Levi Strauss’ shares had risen nearly 40% through 2024 by Wednesday’s close but were down more than 16% as of Thursday afternoon.
-Bill McCall
Brazil’s Suzano calls off acquisition, international paper stocks plummet
3 hours 1 minute ago
Shares of International Paper (IP) fell in trading on Thursday after Brazilian pulp and paper maker Suzano said it was calling off a takeover of a U.S. rival.
Suzano Chief Financial Officer Marcelo Feliozzi Bacci blamed International Paper for the collapse, writing in a regulatory filing that his company had “reached what we believed to be the maximum price for a transaction that would create value for Suzano, without the involvement of any counterparty.”
International Paper’s shares soared last month after reports that: Reuters, Suzano has offered to acquire the company for $15 billion in an all-cash deal.
International Paper shares were down more than 8% on Thursday afternoon but are up 20% this year.
-Bill McCall
What do the stress tests mean for bank investors?
4 hours 8 minutes ago
The Federal Reserve’s latest stress test results for U.S. banks have lifted some of the uncertainty surrounding the nation’s largest financial institutions, potentially setting the stage for banks to start returning capital again.
Wedbush analysts wrote that the Fed has asked banks to hold off on discussing stock buyback and dividend plans until this week, and many banks have “paused share buybacks until regulatory uncertainty eases,” they wrote.
While a bank’s ability to return capital could be limited if its stress capital buffer falls below a certain threshold, Wedbush analysts said they don’t believe the dividends of the regional banks they cover would be limited, even in the event of a severe downturn.
Several banks, including Citizens Financial Group (CFG), First Horizon (FHN), First Citizens (FCNCA), and Regions Financial (RF), are expected to be “moderately active” in share buybacks this year, according to Wedbush analysts, but some may choose to hold off on buybacks until economic uncertainty abates.
Bank of America analysts reported Thursday that the results could give Citigroup (C) roughly $3 billion more to spend on share buybacks, and they also said the stress test results “should pave the way for M&T Bank (MTB) to resume share buybacks.”
Wedbush analysts also noted that banks such as Citizens, M&T, and Fifth Third Bank (FITB) could also raise dividends later this year.
Walgreens shares fall to lowest in 27 years after missing profit estimates
5 hours 12 minutes ago
Shares of Walgreens Boots Alliance (WBA), the major pharmacy chain and health care provider, plummeted to their lowest level since 1997 on Thursday after the company missed profit expectations, sharply cut its guidance and planned to close key stores due to weak consumer demand.
Walgreens reported third-quarter adjusted earnings per share of $0.63, below expectations. Revenue rose 2.6% year over year to $36.4 billion, beating expectations.
The company said it lowered its full-year adjusted EPS guidance to $2.80-$2.95 from its previous guidance of $3.20-$3.35 due to “challenging pharmaceutical industry trends and a weaker-than-expected U.S. consumer environment.”
Walgreens also updated its strategic review, saying it would “simplify and focus its U.S. healthcare portfolio” and said it plans to “close certain underperforming U.S. stores.”
Trading View
Shares of Walgreens Boots Alliance were down nearly 25% on Thursday morning, losing more than half of their value so far this year.
-Bill McCall
Notable levels amid stock price decline following Micron’s earnings announcement
6 hours 3 minutes ago
Shares of chipmaker Micron (MU) fell at the open on Thursday after the company reported quarterly earnings and revenue guidance that fell short of Wall Street’s lofty expectations.
Micron’s stock price has been trending steadily up through the first half of 2024. However, recently, several technical indicators have suggested that the upward momentum is weakening.
Amid the post-earnings selloff, the stock could see buying interest pick up near the key 50% Fib retracement level of $131.63, an area on the chart that also happens to be near the price peak in May.
The 61.8% Fibonacci level is likely to attract buyers at $125.52. This area roughly lines up with the ascending 50-day moving average and provides a support confluence.
On the other hand, a drop to the 78.6% Fib level, close to the April-May price sequence, could provide support at $116.81.
Finally, a big correction well below the Fibonacci grid could see the stock close the gap on second-quarter earnings at $96.25, 32% below Wednesday’s closing price of $142.36.
Micron’s shares were down 6% to $133.89 on Thursday morning.
-Timothy Smith
The stocks that moved the most immediately after trading began
6 hours 55 minutes ago
Benefits:
- McCormick & Company (MKC): Shares of the spice maker rose 5% after the company reported profits that beat analysts’ expectations thanks to strong international sales.
- Suzano SA (SUZ): The Brazilian paper company rose 11% after it pulled out of takeover talks with International Paper (IP), which would have bought the Memphis-based paper company for $15 billion. International Paper shares fell 8%.
- Restoration Hardware (RH): The retailer’s shares rose 8% after it was announced that CEO Gary Friedman had purchased $10 million worth of stock, increasing his ownership stake in the company’s outstanding shares to 25%.
loss:
- Walgreens Boots Alliance (WBA): The pharmacy retailer’s shares plunged 24% after its latest earnings report, hitting their lowest since 1997 earlier this year, and are on track to fall further.
- Levi Strauss (LEVI): The apparel brand’s shares fell 16% after quarterly sales fell short of expectations and a dividend hike was overshadowed.
- Micron Technology (MU): Shares of the chipmaker fell 4% after the close on Wednesday after the company reported third-quarter profit that fell short of expectations and a revenue forecast that was less optimistic than investors had hoped.
Micron, Banks Pull Out, Stock Futures Fall
7 hours 47 minutes ago
Futures contracts linked to the Dow Jones Industrial Average fell 0.2% in premarket trading Thursday.
S&P 500 futures fell 0.1%.
Nasdaq 100 futures also fell 0.1%.
