Stocks Gain as Tech Rallies; Powell Reiterates Fed’s Patience
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Equity Indexes Wrap: Chip Rally Boost Stocks for a Second Day; Food Stocks Lag
March 07, 2024 04:41 PM EST
The Dow
Intel (INTC) led the index higher, rising 3.7% amid a tech rally that also saw Amazon (AMZN) add 2.3% and Microsoft (MSFT) gain 1.8%.
UnitedHealth Group (UNH) rose 1.3% after Bank of America analysts named it a top managed care pick.
Amgen (AMGN) led the index’s laggards, falling 1.4% to extend a weeks-long slump.
Apple (AAPL) slipped 0.1% to notch its seventh consecutive losing session.
The S&P 500
Kroger (KR) jumped 9.9% after reporting better-than-expected fourth-quarter earnings and offering upbeat full-year guidance.
General Electric (GE) gained 4.4% after its aerospace division authorized $15 billion in share repurchases and said it expects to reinstate its dividend after it spins off its renewable energy business, GE Vernova, next month.
Cigna (CI) rose 0.9% after it reached a deal with Eli Lilly (LLY) and Novo Nordisk (NVO) to cap how much health insurers pay for their popular weight loss drugs. Eli Lilly shares ticked up 0.1% Thursday, while Novo Nordisk surged 9% after reporting promising results from an early trial of its weight loss pill.
Costco (COST) rose 1.6% ahead of its earnings report after the bell.
Brown Forman (BF.B) slid 2.7%, extending yesterday’s losses following a disappointing earnings report.
The Nasdaq 100
Semiconductor stocks led the index higher, with Onsemi (ON) gaining 6.9% and Qualcomm (QCOM) adding 4.7%.
Nvidia (NVDA) rose 4.5% to $926 after Mizuho Securities raised its price target to $1,000. With Thursday’s gains, Nvidia has added more than $1 trillion in market cap so far this year.
Broadcom (AVGO) also had its price target raised by Mizuho ahead of its earnings report after the bell. Shares advanced 4.2%.
Micron (MU) rose 3.6% after Stifel upgraded the stock to buy from hold.
Food stocks lagged as investors went all in on growth. Kraft Heinz (KHC) slid 1.3%, Mondelez (MDLZ) lost 0.9%, and Keurig Dr. Pepper (KDP) fell 0.8%.
Big Lots Revenue Fell, Loss Widened in Q4, But Company Projects Margin Improvement
March 07, 2024 03:20 PM EST
Big Lots (BIG) on Thursday reported a wider-than-expected quarterly loss, as well as a decline in revenue, as demand slowed and the company faced cost pressures.
The furniture and home-decor chain reported a fiscal fourth-quarter loss of $30.7 million, more than double what it was a year ago, and an adjusted loss per share of $0.28. Revenue for the quarter ending Feb. 3 fell 7.2% to $1.43 billion, in line with forecasts, while comparable store sales dropped 8.6%.
Big Lots anticipates current-quarter comparable store sales to improve over the fourth quarter, but still be down by a mid-single-digit percentage. The company expects gross margin will “improve significantly” from a year ago, rising 200 to 250 basis points as a result of “reduced markdown activity, lower freight costs, and cost reduction and productivity initiatives.”
The company’s shares went on a rollercoaster ride after the results were released. Late in the afternoon, the stock was up 3.9% at $5.23, after having risen 11% at the open before falling as much as 7% about an hour into the session, and then resuming its upward move.
Nvidia Year-To-Date Market Cap Gains Exceed $1 Trillion
March 07, 2024 02:47 PM EST
We’re just 67 days into 2024 and already Nvidia (NVDA) has added $1 trillion in market value.
The chip maker’s stock has soared in the last year and a half amid a boom in demand for artificial intelligence and the Nvidia graphics processing units on which it is so often trained and operated.
Nvidia ended 2023 with a market capitalization of about $1.22 trillion after its stock price more than tripled over the year. Since then, shares have continued to soar, gaining more than 85% so far this year. Shares jumped more than 16% in a single day in February, adding a record $272 billion in market value, after its earnings topped Wall Street’s high expectations.
On Thursday, shares rose 4% to trade at $922, bringing its market cap to $2.27 trillion.
Nvidia’s meteoric rise stands in stark contrast to the recent fortunes of some of its Magnificent Seven peers, specifically Tesla (TSLA) and Apple (AAPL). Tesla has struggled with a slowdown in electric vehicle demand and increased competition in major markets like China, both of which have forced manufacturers to slash prices. Tesla shares have fallen nearly 25% this year, erasing more than $225 billion from its market cap, which now stands at $562 billion.
Apple has also fallen victim to a slowdown in China, where iPhone sales so far this year have disappointed. The company also recently pulled the plug on an electric vehicle initiative and has struggled to convince investors its newest product, the Apple Vision Pro augmented reality headset, can become a best-selling, category-defining product like the iPhone and iPad. Apple shares have lost about 12% so far this year, which has trimmed more than $380 billion from its market cap, which was once the largest in the world at more than $3 trillion.
NYCB Stock Climbs Following Investor Call, $1B Cash Infusion
March 07, 2024 02:16 PM EST
New York Community Bank (NYCB) executives tried to soothe frayed investor nerves on a call Thursday, a day after the beleaguered bank received a $1 billion cash injection from a consortium of lenders, including former Treasury Secretary Steve Mnuchin’s firm Liberty Strategic Capital, and a new chief executive in former Comptroller of the Currency Joseph Otting.
NYCB’s deposits stood at $77.2 billion as of Wednesday, according to executives. That’s about 7% lower than the $83 billion the bank reported on Feb. 5, a day before Moody’s downgraded its credit rating, and roughly 5% lower compared with the end of last year.
Incoming CEO Joseph Otting told investors on the call that one of the items on his to-do list was to reduce the bank’s concentration of commercial real estate (CRE) loans. The firm’s exposure to rent-regulated multifamily properties in New York led it to raise its provisions for credit losses by almost 800% at the end of last year, one of the dominoes that triggered the bank’s recent troubles.
See here for more takeaways from NYCB’s investor call on Thursday.
NYCB stock was up 5.6% at $3.66 Thursday afternoon but has lost almost 65% year-to-date.
Burlington Stores Reports Rising Sales and Lower Inventories, Sending Its Stock Higher
March 07, 2024 01:25 PM EST
Shares of Burlington Stores (BURL) jumped in intraday trading Thursday after the discount clothing chain reported better-than-expected results on higher sales and lower inventory.
The retailer posted fourth-quarter adjusted earnings per share (EPS) of $3.69, and revenue gained 13.9% from a year ago to $3.13 billion. Both exceeded estimates.
Comparable store sales rose 2%, ahead of the company’s earlier forecast of no growth or a slight loss. Gross margin increased 190 basis points (bps) to 42.6%.
For the full year, merchandise inventories declined to $1.09 billion from $1.18 billion. Reserve inventory fell to 39% from 48% at the end of fiscal 2022.
Burlington shares were up 6.2% to $218.62 early Thursday afternoon. They’ve gained nearly 13% so far this year.
Kroger Stock Surges on Q4 Earnings Beat and 2024 Guidance
March 07, 2024 12:44 PM EST
Kroger’s (KR) shares jumped Thursday after the grocery chain reported fourth-quarter profit that beat analyst estimates.
Kroger reported quarterly adjusted earnings per share (EPS) of $1.34, above expectations. Net income of $736 million was up from $450 million in the fourth quarter of 2022, while sales came to $37.06 billion, up from $34.82 in the prior-year period.
The company guided for full-year fiscal 2024 adjusted EPS between $4.30 to $4.50, while analysts were looking for the low end of that range.
Kroger indicated that it still intends to pursue its merger with Albertsons, which the Federal Trade Commission (FTC) filed a lawsuit last week to block over concerns that it would decrease competition and raise prices.
Shares of Kroger were up 8.6% at $54.85 early Thursday afternoon. With Thursday’s rise, they’ve gained about 20% year to date.
BJ’s Gains as Retailer Posts Q4 Profit Beat, Revenue Miss Amid ‘Macro-Driven Uncertainty’
March 07, 2024 11:34 AM EST
BJ’s Wholesale Club (BJ) shares climbed over 6% Thursday morning as the retailer reported fourth-quarter earnings that beat estimates, though its revenue missed expectations amid “macro-driven uncertainty.”
The company posted quarterly net sales of $5.36 billion, up 8.7% over the prior-year period—attributable in part to an extra week of sales and six new locations opened in the quarter. However, revenue missed analyst estimates as comparable club sales declined 0.4% from the fourth quarter of 2022.
BJ’s recorded quarterly net income of $145.9 million, or $1.08 a share. Its adjusted EPS of $1.11 beat estimates.
BJ’s shares were up 6.6% at $76.89 late in the morning Thursday. They’ve gained about 15% so far this year.
Wegovy Maker Novo Nordisk Stock Surges on Promising Trial of Obesity Pill Amycretin
March 07, 2024 10:42 AM EST
The American depositary receipts (ADRs) of Novo Nordisk A/S (NVO) gained more than 8% in early trading Thursday after the Danish maker of Ozempic and Wegovy released promising data on an experimental daily pill aimed at treating obesity.
The highly anticipated amycretin pill reportedly showed higher weight loss than Novo Nordisk’s popular Wegovy treatment.
In a Phase I trial, amycretin pills helped participants lose 13.1% of their weight after 12 weeks versus a weight loss of 6% in a comparable Wegovy trial, the company said at an investor meeting.
The phase 2 trial—where the focus is on the drug’s effectiveness—is set for the second half of 2024, with results expected in early 2026, the company reportedly said.
Novo Nordisk ADRs were up 8.3% at $135.20, a record high, about an hour into Thursday’s session. The stock has gained 88% in the past 12 months and 31% since the start of the year alone.
Victoria’s Secret Stock Sinks After Issuing Soft Sales Outlook
March 07, 2024 10:01 AM EST
Victoria’s Secret (VSCO) shares slumped Thursday morning after the lingerie retailer issued a cautious sales outlook amid soft apparel demand in the North American market.
The company said it sees fiscal year 2024 net sales of about $6 billion, falling short of the $6.19 billion figure expected by Wall Street. For the first quarter, Victoria’s Secret projects sales to decrease by mid-single digits from last year’s Q1 sales of $1.407 billion. By comparison, analysts had forecast sales in the period of $1.39 billion.
The intimate apparel maker cited a subdued North American outlook for its cautious guidance. “As we look into the new year, we recognize the broader intimates market in North America has been down for four consecutive quarters and we are planning the business appropriately conservative in the near term,” Victoria’s Secret CEO Martin Waters said in the company’s earnings statement.
Despite a bullish golden cross pattern forming on the Victoria’s Secret chart in late December, the share price has traded mostly sideways since that time. Amid earnings-related weakness, it’s worth keeping an eye on a key zone of support between $20 and $21.50. A close below this important technical area could potentially open the door to a retest of the stock’s record low of $13.62.
Victoria’s Secret stock fell 29.2% to $18.14 in early trading Thursday.
Stocks Making the Biggest Moves Premarket
March 07, 2024 09:19 AM EST
Gains:
- American Eagle Outfitters Inc. (AEO): Shares of the apparel retailer jumped 11% after its holiday quarter sales and earnings topped Wall Street’s estimates.
- Novo Nordisk A/S (NVO): Shares of the Danish pharmaceutical giant rose more than 7% after it released promising results from a trial of an experimental weight loss pill.
- Kroger Co. (KR): Shares of the grocery chain rose more than 4% after reporting better-than-expected quarterly earnings and saying it would continue to pursue its contested merger with rival Albertsons (ACI).
Losses:
- Victoria’s Secret & Co. (VSCO): Shares of the lingerie retailer slumped more than 26% after it offered disappointing current-quarter sales guidance amid soft North American demand.
- ADT Inc. (ADT): Shares of the home security company fell more than 9% after it announced a secondary public stock offering.
- BJ’s Wholesale Club Holdings Inc. (BJ): Shares of the membership warehouse retailer slipped about 2% after it offered guidance at the low end of analysts’ estimates, overshadowing its better-than-expected fourth-quarter earnings.
Stock Futures Up Ahead of Powell’s Senate Testimony
March 07, 2024 08:45 AM EST
Futures contracts connected to the Dow Jones Industrial Average were up 0.2% in premarket trading on Thursday.
S&P 500 futures gained 0.4%.
Nasdaq 100 futures traded 0.6% higher about an hour before markets opened.
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Read More: Stocks Gain as Tech Rallies; Powell Reiterates Fed’s Patience