Tech Buoys Nasdaq; Nvidia, Banks Weigh on S&P 500

S&P 500’s Biggest Gains and Losses

46 minutes ago

Here are the S&P 500 stocks that gained and lost the most today.

Dow Drops on Bank Credit Cuts

1 hr 29 min ago

Following more turmoil in the banking sector, the Dow Jones Industrial Average fell steadily throughout the session to close down 0.5%, or 175 points. 

Boeing (BA) shares moved higher by 1.2%, making it the best-performing stock of the Dow 30, after reports that Australian air carrier Qantas Airways is nearing a deal to add an unspecified number of 787-10 Dreamliners to its fleet. 

Apple (AAPL) gained 0.8%, rising for a third consecutive day after falling about 10% in the first two weeks of August. Verizon (VZ) shares gained 0.6%, while Walgreens Boots Alliance (WBA) rose 0.4% to rebound slightly from six straight sessions of losses. 

Merck & Co. (MRK) shares dropped 2.2% to lead the Dow lower.

The financials sector declined 0.9% after S&P followed the lead of other rating agencies and downgraded a handful of U.S. banks on concerns about the impact of high interest rates. JPMorgan Chase (JPM) shares dropped 2.1%, while American Express (AXP) fell 1.1% and Goldman Sachs (GS) lost 1%. Credit card issuer Visa (V) bucked the trend, moving higher by 0.5%. 

Nike (NKE) shares fell 1.4%, its ninth consecutive session of declines, after sporting goods retailer Dicks Sporting Goods (DKS) reported poor second-quarter results. Investors are also worried about the shoe maker’s exposure to the sluggish Chinese economy. 

IBM (IBM) shares dipped 0.3% after it said it would sell its holdings in The Weather Company to global investment firm Francisco Partners. The tech giant said the move was part of its efforts to shift to a core strategy focused on hybrid cloud and artificial intelligence services.

-Terry Lane

Schwab Stock Plummets on Cost Cutting, Fresh Debt Issuance

1 hr 53 min ago

Shares of Charles Schwab Corp. (SCHW) fell 5% Tuesday after the firm said it would cut jobs and office space in an effort to save up to $500 million annually. But first, it’ll incur up to $500 million in charges related to the cost cuts.

It is also reportedly seeking to issue more than $2 billion in new investment-grade debt, according to Bloomberg, which cited an unidentified source.

The financial services company has struggled this year. March’s banking crisis spurred depositors to withdraw their funds in droves; deposits fell 11% in the first quarter of this year, and 7% last quarter.

Its stock has suffered as well, falling 27% year-to-date.

Vaccine Makers Soar on Rise in Covid-19 Cases, New Subvariants

2 hr 22 min ago

A rise in Covid-19 cases amid the spread of new omicron subvariants has sent shares of Covid-19 vaccine makers soaring in recent days.

A Biden Administration official Sunday said the White House would soon be urging Americans to get booster shots ahead of fall flu season. Updated vaccines are expected to become available by the end of September.

Since the White House’s statements, Novavax Inc. (NVAX) shares have gained 31%, Moderna Inc. (MRNA) has risen 15%, and BioNTech SE (BNTX) has climbed 12%.

But uptake of the new vaccines is likely to be sluggish. 75% of U.S. adults received their initial Covid-19 vaccine, and 50% have received at least one booster shot. But just a quarter of all eligible adults have received a bivalent booster shot, the newest Covid-19 vaccine made available last September.

IBM Agrees to Sell Weather Company Assets to Francisco Partners

3 hours ago

IBM (IBM) has agreed to sell its holdings in The Weather Company to global investment firm Francisco Partners for an undisclosed sum.

Specific terms of the deal were not disclosed, but Francisco Partners will acquire The Weather Company’s digital consumer-facing offerings, and its mobile and cloud-based properties including Weather.com, Weather Underground, and Storm Radar.

The Weather Company also provides enterprise services and has in-house operations for forecasting and data science. The brand, which was bought by IBM in 2016, serves up to 415 million people per month and 2,000 businesses.

Shares of IBM were down 0.5% in late afternoon trading.

-Kevin George

MACOM Buys Wolfspeed’s Radio Frequency Business for $125 Million

3 hr 58 min ago

Wolfspeed (WOLF) agreed to sell its radio frequency business, Wolfspeed RF, to semiconductor products supplier MACOM Technology Solutions (MTSI) for $125 million, the companies announced on Tuesday.

MACOM will pay $75 million in cash, and $50 million of MACOM’s common stock. The transaction is expected to close by the end of this year.

Wolfspeed’s radio frequency business generates annualized revenues of approximately $150 million and includes a portfolio of gallium nitride on silicon carbide products used in microwave appliances, as well as in aerospace, defense, industrial, and telecommunications sectors.

Wolfspeed and MACOM shares gained about 3% in early trading on Tuesday following the news.

-Fatima Attarwala

Retail Stocks Slump on Disappointing Reports from Macy’s, Dick’s Sporting Goods

4 hr 47 min ago

Retailer stocks fell Tuesday after Macy’s (M) reaffirmed its recently lowered full-year sales and earnings outlook, warning of macroeconomic pressures and uncertainty around the health of U.S. consumers. 

On top of that, specialty retailer Dick’s Sporting Goods (DKS) missed analysts’ earnings estimates and cut its full-year guidance this morning, a decision it attributed to increased theft.

The S&P Retail Select Industry Index sank 2.7% Tuesday, with all of its 20 largest constituents trading lower. Macy’s competitor Nordstrom Inc. (JWN) plummeted 11%, Kohl’s Corp. (KSS) dropped 8%, and Hibbett Inc. (HIBB) fell 5%.

Midday Market Movers

5 hr 19 min ago

VinFast Auto Ltd. (VFS): Shares of the Vietnamese electric vehicle maker soared more than 100% on significant volume—9 million of the company’s 16 million publicly-traded shares changed hands. The stock jumped 250% on its first day of trading last Tuesday before losing about half its value over the last three days of the week. 

Fabrinet (FN): Shares of the electronic manufacturing company gained more than 27% after it reported better-than-expected earnings and revenue for the most recent quarter. 

Hasbro Inc. (HAS): Shares of the toy maker gained more than 7% after Bank of America analysts raised their price target to $90, citing the success of digital games Monopoly Go and Baldur’s Gate 3, and the depth of Hasbro’s IP library.

Charles Schwab Corp. (SCHW): The financial services firm’s shares fell more than 4% after it said it would cut jobs and office space to control costs. It is also reportedly seeking to issue new investment-grade debt. 

Macy’s Inc. (M): The department store’s shares sank 12% after reporting sales fell in the most recent quarter. The company also offered a cautious earnings outlook for the rest of the year as it contends with a pullback in consumer spending and rising delinquencies on its credit cards.

Baidu Revenue Tops Estimates, Robo-Taxi Rides Jump

5 hr 51 min ago

Baidu (BIDU) shares rose after the company reported revenue that beat analysts’ expectations, while its automated taxi service posted strong growth.

Revenue for the quarter ended June 30 was 34.06 billion yuan ($4.67 billion), up 15% from the same period a year ago and higher than analysts’ estimates of 33.28 billion yuan. The company said non-GAAP operating profit grew 27% from a year ago, with non-GAAP operating margins growing 3% year-on-year. Net income of $718 million, or $1.95 per American Depositary Share, was up 43% over the year.

Apollo Go, Baidu’s robo-taxi service, booked around 714,000 rides for the quarter, up 149% year on year. The company also shrugged off a tough advertising climate with marketing revenue of 19.6 billion yuan ($2.71 billion), up 15% from a year ago.

Baidu shares rose 4% on Tuesday, marking an almost 10% gain year-to-date.

-Kevin George

Kenvue to Join S&P 500, Bumping Advance Auto Parts

6 hr 18 min ago

Kenvue (KVUE), Johnson & Johnson’s recently spun-off consumer health products unit, will join the S&P 500 on Friday. The company will bump Advanced Auto Parts Inc. (AAP) to the S&P SmallCap 600.

Shares of Kenvue rose 3% on the announcement, a reflection of what’s sometimes referred to as the S&P phenomenon, the short-term boost a company’s share price gets from inclusion in the benchmark index.

While research suggests inclusion in the S&P 500 isn’t always the best thing for a company and its efficiencies, stock prices do often respond positively to index inclusion as the company’s name recognition increases and passive index funds buy the stock.

Lowe’s Beats Earnings Estimates as Sales Fall Less Than Expected on Online Growth

6 hr 54 min ago

Lowe’s (LOW), one of America’s biggest home improvement retailers, said profit and sales fell less than expected in the quarter ended Aug. 4 as growth online and by home professionals helped offset a decline in spending on discretionary do-it-yourself projects.

Net income came in at just over $2.67 billion or $4.56 a share, down 10.7% from $2.99 billion or $4.67 a share in the year-ago quarter. Despite the decline, earnings per share (EPS) came in above a $4.49 estimate. Net sales totaled $24.95 billion, down from $27.48 billion in the year-ago quarter and just short of a $24.99 billion estimate.

Comparable store sales fell 1.6% due to lower demand for DIY home projects—a key revenue driver—but the decline was less than expected as spending online and by home professionals grew.

Shares of Lowe’s jumped 4% Tuesday morning. They’ve risen 11% so far this year, compared to a 4% gain in shares of rival Home Depot.

-Mack Wilowski

Microsoft Restructures Activision Acquisition to Secure Approval From UK Regulator

7 hr 55 min ago

In a bid to win approval from U.K. regulators, Microsoft (MSFT) restructured its proposed $69 billion acquisition of video game maker Activision Blizzard (ATVI) and agreed to transfer the cloud streaming rights for the Call of Duty maker to Ubisoft Entertainment.

The U.K. Competition and Markets Authority (CMA) had previously blocked Microsoft’s acquisition of Activision, citing concerns that it would harm competition in the nascent cloud gaming market.

Under the new terms of the restructured agreement, Microsoft will not be able to release Activision Blizzard games exclusively on its own cloud streaming service, Xbox Cloud Gaming, or control licensing terms extended to rival services.

Ubisoft will acquire the cloud streaming rights of Activision’s PC and console games and compensate Microsoft with a one-off payment for the deal, the amount of which was not disclosed.

Activision and Microsoft shares were up about 1% in early trading on Tuesday following the news.

-Fatima Attarwala

Stocks Making the Biggest Moves Premarket

8 hr 38 min ago

Gainers:

• Miniso Group Holding Ltd. (MNSO): Shares of the Chinese retail chain gained 8% after it reported better-than-expected revenue and earnings in its fiscal fourth quarter. Adjusted earnings more than doubled from the year before, and revenue grew 40% year-over-year to RMB3,252.2 million ($448.5 million). 
• Tesla (TSLA): Shares of the electric vehicle maker rose 4%, continuing to surge after yesterday’s 7% rally. 
• AppLovin Corp. (APP): Shares of the digital marketing company gained 4% after Jeffries upgraded the stock to Buy from Hold, citing improvement in the gaming market. 
• Lowes Companies (LOW): The home improvement retailer’s stock climbed 2% after beating earnings estimates for the second quarter, reporting earnings per share of $4.56 against analysts’ forecasts of $4.47. 

Losers:

• Dick’s Sporting Goods Inc. (DKS): Shares of the sports equipment and apparel retailer fell 20% after it missed earnings estimates and cut its full-year guidance. The company reported quarterly earnings of $2.82 per share, well below analysts’ expectations of $3.81. 
• Macy’s Inc. (M): Shares of the department store lost more than 7% after beating earnings and revenue forecasts in the most recent quarter but issuing current-quarter guidance well below analysts’ estimates. 
• BJ’s Wholesale Club Holdings Inc. (BJ): The retailer’s stock dropped more than 2% after it reported lower-than-expected sales last quarter, with revenue falling 3% year-over-year to $4.96 billion.

5 Things to Know Before Markets Open

9 hr 4 min ago

Here’s what investors need to know to start their day:

1. Microsoft (MSFT) submitted a new proposal to U.K. regulators on its proposed $69 billion acquisition of video game maker Activision Blizzard (ATVI), with Microsoft committing to sell the rights of current and future Activision games to French game maker Ubisoft Entertainment SA.
2. Zoom (ZOOM) shares were 4% higher in pre-market trading after its quarterly earnings report beat analyst expectations on the strength of its enterprise business, longer sales cycles, and lower spending on cloud services, sales, and marketing expenses.
3. Kenvue (KVUE) will join the S&P 500 index beginning with Friday’s open, a move which could impact its stock price as index funds purchase shares.
4. Lowe’s (LOW) reported a 1.6% quarterly decline in comparable sales, better than the 2.6% drop that analysts were expecting, as the hardware retailer said a strong spring recovery and improvement in its Pro and online businesses helped overcome deflation in lumber and lower do-it-yourself demand.
5. Economists expect existing home sales in July to dip to 4.15 million, down from 4.16 million the prior month, when those figures are released at 10 a.m ET.

-Terry Lane

Stock Futures Up Despite More Bank Downgrades

9 hr 26 min ago

Futures contracts connected to the Dow Jones Industrial Average gained 0.3% in premarket trading.

S&P 500 futures were up about 0.6%.

And Nasdaq 100 E-mini futures gained 0.8%, possibly putting tech stocks on course for another day of big gains.