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Equity Indexes Wrap: Chip Stocks, Tech Lead the Indexes Higher Again
January 19, 2024 04:20 PM EST
The Dow
Travelers Companies (TRV) surged 6.8% to close at a record after it said fourth-quarter profit was double the prior year quarter amid higher premiums and investment income.
Intel (INTC) jumped 3%, boosted by optimism around artificial intelligence investment and a recovery in the microchip market.
Apple (AAPL) rose 1.6% as it launched preorders of its new Apple Vision Pro. Reports of estimated delivery dates stretching into March could signal strong demand for the $3,500 augmented reality headset.
UnitedHealth Group (UNH) fell 2.7%, continuing to slump after tumbling yesterday on peer Humana’s (HUM) slashed 2023 earnings outlook.
Walmart (WMT) stock slipped 0.5% after the company said it would raise pay for store managers in February.
The S&P 500
Advanced Micro Devices (AMD) climbed 7.1% to lead the index higher.
Regional banks got a lift from Fifth Third Bancorp (FITB) and Huntington Bancshares (HBAN), both of which topped earnings estimates with their quarterly reports. Fifth Third shares rose 2.7% Friday, while Huntington gained 3.9%. Peers M&T Bank (MTB), KeyCorp (KEY), and U.S. Bancorp (USB) all jumped more than 4%.
Semiconductor fabrication equipment makers were among the index’s leaders for a second day. Lam Research (LRCX) gained 5.2%, as peers Applied Materials (AMAT) and KLA Corp (KLAC) rose 4.7% and 3.9%, respectively.
Oilfield services provider Schlumberger (SLB) gained 2.3% after reporting better-than-expected fourth quarter earnings and sales.
State Street’s (STT) earnings exceeded Wall Street’s expectations despite posting lower revenue and net interest income. Shares climbed 2%.
Meta Platforms (META) rose 2% after CEO Mark Zuckerberg said the company would spend billions on Nvidia graphics processing units this year as it builds the computing infrastructure needed to prioritize artificial intelligence.
Ford (F) added 1.7% after saying it would scale back its electric vehicle production in response to flagging demand.
Molina Healthcare (MOH) and Centene Corporation (CNC) slipped 4.1% and 3.2%, respectively, weighed on by Humana’s business update yesterday. Humana lost 2.5%.
Airlines gave up some of yesterday’s gains. United Airlines (UAL) slid 2.4% and Delta Airlines (DAL) dropped 2.2%.
The Nasdaq 100
Broadcom (AVGO) rose 5.9% to notch a fresh record high after Goldman Sachs reinstated coverage of the semiconductor company with a “buy” rating. Analysts expect double-digit growth in its AI-related business.
Chip stocks dominated for a second day. Qualcomm (QCOM) added 4.6% and Nvidia (NVDA) rose 4.2% to close at an all-time high.
Texas Instruments (TXN) gained 4% after being upgraded to “buy” by UBS analysts, who cited an expected rebound in semiconductor orders.
Very few stocks in the index fell Friday. The laggards were led by Dollar Tree (DLTR), off 1.5%, followed by PepsiCo (PEP) and Fortinet (FTNT), both down 0.8%.
Stocks Gets a Boost From Surge in Consumer Sentiment
January 19, 2024 03:06 PM EST
Stocks climbed steadily throughout the day Friday, with the S&P 500 and Nasdaq rising nearly uninterrupted after the Michigan Consumer Sentiment Index jumped 13% to 78.8.
After hitting an all-time low in June 2022, sentiment has risen nearly 60% and is now just 7% lower than the historical average. Analysts had forecast the index to come in flat at 69.7.
If Friday’s preliminary reading holds when the final data is released in early February, the index will have jumped a cumulative 29% in December and January, its largest two-month increase since 1991.
Expectations for inflation lowered again in January, with consumers anticipating inflation at 2.9% for the year ahead. Only two months ago consumers were anticipating inflation of 4.4 %. It’s the lowest inflation expectations have been since December 2020.
Travelers Companies Hits a Record on Strong Earnings
January 19, 2024 02:05 PM EST
Shares of The Travelers Companies (TRV) jumped over 4% to an all-time high in intraday trading Friday after the insurance provider’s profit more than doubled on an increase in premiums and investment income, and lower payouts.
Travelers reported fourth-quarter core income soared 101% from a year ago to $1.63 billion, or $7.01 per share. Revenue was up 13% to $10.93 billion. Both exceeded estimates.
Investment income increased 24% to $778 million, and catastrophe losses net of reinsurance sank 73% to $125 million.
Travelers shares were up almost 6% at $210 per share Friday afternoon. They have gained about 13% in the past year.
TradingView
S&P 500 Reaches All-Time High
January 19, 2024 01:20 PM EST
The S&P 500 climbed Friday to trade at a record intraday high above 4,820.
The index was squarely on track to close at a record high on Friday. It needs to add about 0.3% to end the day above its record close of 4,796.56.
It took the S&P 500 more than two years to shake off the losses of 2022’s bear market and overtake its previous record of 4,818.62, set on Jan. 4, 2022.
Of the Dow, S&P 500, and the Nasdaq Composite, only the latter has yet to retake its post-pandemic highs. The index’s highest-ever close was 16,057.44 on Nov. 19, 2021. It peaked at 16,212.23 on Nov. 22, before plummeting to close at 10,213.29 on Dec. 28, 2022. On Friday, it traded at around 15,243.
The Dow overtook its previous record on Dec. 13, 2023, after the Federal Reserve signaled it could cut interest rates three times this year.
Ford Scales Back Electric Truck Production as EV Demand Slows
January 19, 2024 12:29 PM EST
Ford Motor (F) is scaling back production of its electric F-150 Lightning truck as electric vehicle (EV) demand slows.
The news is another blow to the outlook for EVs amid a slowdown in demand. Just earlier this week, Europe’s largest car rental company, Sixt, said it was phasing out its Tesla fleet, along with an announcement that it will purchase 250,000 vehicles from Stellantis by 2026.
Hertz (HTZ) also said it was scaling back its Tesla (TSLA) EVs due to its price cut strategy, which lowers the prices of its used models.
Ford shares were up 0.4% midday Friday, while Tesla, America’s leading EV maker, fell 1.5%.
Wayfair Stock Surges as the Home Goods Retailer Cuts 1,650 Jobs
January 19, 2024 11:32 AM EST
Wayfair (W) shares skyrocketed in early trading Friday after the home goods retailer slashed jobs in an effort to cut expenses.
Wayfair said it was laying off 1,650 employees, about 13% of its global staff, and approximately 19% of its corporate team.
The company said the decision came after it completed “a comprehensive, organization-wide analysis of the appropriate team size and structure.” Wayfair added that the cuts are expected to deliver $280 million in annualized savings.
The move follows similar job cuts by retailers Etsy (ETSY), and Macy’s (M). Wayfair said it anticipates the layoffs will result in $70 million to $80 million in costs in the current quarter.
Shares of Wayfair were up 8.4% at $55.15 late Friday morning. They have gained more than 40% over the past year.
TradingView
Roomba-Maker iRobot’s Stock Plummets on Reports Amazon Acquisition in Danger
January 19, 2024 10:58 AM EST
Shares of iRobot (IRBT), the company behind the Roomba robotic vacuum, plunged Friday amid reports it and its acquirer Amazon (AMZN) were in the crosshairs of EU antitrust regulators.
The Wall Street Journal on Thursday evening reported that European Commission officials had told Amazon representatives that the deal was likely to be blocked, according to people familiar with the discussions. The commission has until Feb. 14 to make a final decision.
The deal was reportedly on track to get unconditional approval from EU regulators in mid-November, news that sent iRobot’s shares skyrocketing. Those reports were proved inaccurate just days later when regulators sent Amazon an official statement of objections and invited the company to propose concessions that would ensure it wouldn’t give preferential placement to iRobot products in its marketplace.
The acquisition has since appeared to be in peril. Amazon missed its deadline to offer concessions last week, leading to speculation the company could abandon the deal altogether.
iRobot shares plummeted 30% in early trading Friday to trade around $17. Amazon shares dipped 0.2%.
Macy’s Stock in Spotlight After News of Job Cuts, Store Closings—Key Levels to Monitor
January 19, 2024 10:27 AM EST
Department store retailer Macy’s (M) is in focus after it announced Thursday that it plans to cut roughly 2,350 jobs and close five stores to streamline costs and stem slowing sales. The layoffs will see staff reductions at the retailer’s corporate office and across various stores.
The move follows plans by the struggling retailer to open around 30 smaller stores in strip malls over the next two years, which it hopes will resonate with suburban shoppers who have shunned large malls for their mobile devices and more convenient local options.
Source: TradingView.com.
Macy’s shares broke above a multi-month downtrend line in mid-November, indicating many of the challenges facing the retailer could be already baked into the price. Moreover, the 50-day moving average has recently crossed above the 200-day moving average to generate a golden cross buy signal.
While the price undergoes a retracement, keep an eye on the $17 level—an area on the chart where it may encounter support from the 50-day moving average.
Stocks Making the Biggest Moves Premarket
January 19, 2024 09:21 AM EST
Gains:
Wayfair Inc. (W): Shares of the furniture retailer jumped 15% after it said it would lay off about 1,650 employees, or 13% of its workforce.
Travelers Companies Inc. (TRV): The insurance company’s stock gained more than 5% after its quarterly results blew past analyst estimates on the back of higher car and home insurance premiums.
Nvidia Corp. (NVDA): Shares of the chipmaker rose more than 1% after Meta Platforms (META) CEO Mark Zuckerberg said that the company would spend billions on its AI chips this year as it makes AI its top priority.
Losses:
iRobot Corp. (IRBT): Shares of the Roomba maker tumbled more than 30% after the Wall Street Journal reported the European Commission plans to block Amazon’s (AMZN) $1.4 billion acquisition of the company.
Hertz Global Holdings Inc. (HTZ): Shares fell about 3% after Jefferies downgraded the stock to “hold” from “buy,” citing the pressure elevated EV repair and depreciation expenses would put on earnings in the near term.
Stock Futures Up as S&P 500 Approaches Record High
January 19, 2024 08:35 AM EST
Futures contracts connected to the Dow Jones Industrial Average were up 0.6% in premarket trading Friday.
S&P 500 contracts were also up 0.6%.
Nasdaq 100 futures surged 0.8%.
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