Stocks finish higher as S&P 500 closes in on 5,000
Nasdaq Composite and Dow Jones Industrial Average also see gains
Stocks finished higher on Wednesday, with the S&P 500 adding 0.82% to finish at 4,995.06. The Nasdaq Composite jumped 0.95% to settle at 15,756.64, while the Dow Jones Industrial Average rallied 156 points, or 0.4%, to close at 38,677.36 and reached an all-time high.
Nvidia shares top $700 for the first time
Nvidia shares topped $700 for the first time during Wednesday intraday trading, with the chipmaker continuing its extraordinary ascent this year even amid concerns the stock is now overpriced. The stock is now up by more than 40% in 2024. It was higher by 2.8% on Wednesday.
Oil rises as Netanyahu vows to press on with war
Oil prices rose Wednesday as Israel Prime Minister Benjamin Netanyahu vowed to press on with the war in Gaza, diminishing hopes for a ceasefire agreement. The West Texas Intermediate contract for March added 55 cents, or 0.75%, to settle at $73.86 a barrel Wednesday, while the Brent contract for April gained 62 cents, or 0.79%, to settle at $79.21 a barrel. Netanyahu on Wednesday rejected a proposal made by Hamas for a permanent ceasefire, vowing to fight on in Gaza until “absolute victory.” Oil prices also found support from forecasts that U.S. production will grow more slowly this year than expected. On balance, domestic oil output is expected to grow by 170,000 barrels per day this year, down significantly from the Energy Department’s previous forecast beyond!
Berkshire Hathaway shares top $600,000 for the first time
Berkshire Hathaway class A shares climbed about 1% Wednesday to hit an intraday high of $600,531, the first time the conglomerate’s stock crossed the $600,000 threshold. Warren Buffet’s conglomerate has gained more than 10% this year, outperforming the S&P 500’s 4.7% return. The company is set to report fourth quarter earnings later this month.
Information technology, consumer discretionary stocks lead S&P 500 higher
Snap heads for third worst day ever
A post-earnings sell-off in Snap put the stock on track for its third worst session in its history. Shares of the social media stock dove more than 35% during Wednesday’s session. If that holds through close, it would mark the third biggest loss ever in a day and worst session since 2022. Wednesday’s tumble comes a day after the company missed expectations for quarterly revenue and provided light guidance. Snap said it was facing headwinds tied to conflict in the Middle East.
Stocks moving in midday trading
Here are some of the names making the biggest moves during midday trading:
- Roblox — Shares popped 10% after the video game company reported a loss of 52 cents per share, less than the 55-cent per share loss expected from analysts polled by LSEG. Revenue, or bookings, also beat expectations.
- Amgen — Shares tumbled fell about 5% following a downgrade by Leerink Partners to market perform from outperform. The firm cited uncertainty around Amgen’s obesity drug becoming a “viable contender” in the weight-loss space.
- XPO — The shipping stock soared 19% after XPO reported adjusted earnings per share came in at 77 cents, topping the consensus estimate of 62 cents, according to FactSet. Revenue also beat the consensus estimate.
Fed officials advocate moving slow on cutting rates
Wednesday was a big day for Federal Reserve speakers, virtually all of whom said they aren’t ready to start cutting interest rates yet and will move slowly once they are. Some highlights:
- Governor Adriana Kugler said inflation is showing solid signs of slowing down, but she is not ready yet to start lowering interest rates.
- Minneapolis Fed President Neel Kashkari also expressed caution about cutting rates too quickly, telling CNBC he only expects two or three reductions this year.
- “I will need to see more evidence before considering adjusting the policy stance,” Boston President Susan Collins said, ther adding that the path ahead could be “bumpy.”
- Commenting on the economy, Richmond Fed President Thomas Barkin said, “That drumbeat you hear is the soft landing.” However, he also added that he favors “being patient” on rates.
Economy stuck in a ‘late-cycle purgatory,’ says Wolfe Research
Wolfe Research says its Business Cycle Index, which measures excess in the economy, is indicating a “late-cycle purgatory.” “It is nearly impossible for this index to come back down to early cycle over the next year without a downturn,” chief economist Stephanie Roth wrote in a Wednesday note. Historically, the financial sector, manufacturing, and energy sectors tend to outperform in late-stage business cycles, according to Roth. Meanwhile, defensive sectors tend to underperform late-cycle, Roth said. The economist noted that tech was not included in the analysis of historical cycles.
Real estate sector lags as S&P 500 rises
Morgan Stanley increases Nvidia price target ahead of earnings announcement
The near-term growth story for Nvidia remains promising amid ongoing demand for artificial intelligence processors, according to Morgan Stanley. The investment bank hiked its price target and reiterated an overweight rating ahead of the chipmaker’s quarterly earnings release set for Feb. 21. The chipmaker has surged 211% in the last 12 months, including a 39% rally in the first six weeks of 2024. As Nvidia continues to climb, some investors have questioned whether earnings will expand are!
Traders may be overestimating risks tied to mega-cap outperformance, BMO’s Belski says
Investors may be too worried about how the market will perform when mega-cap stocks start pulling back, according to Brian Belski, BMO Capital Markets chief investment strategist. Belski said concern around how the market will move if large-cap outperformers begin correcting has been a popular topic as the Magnificent 7 has driven equities higher. But he noted that historical data gives reason for optimism and shows a drawdown is even considered normal. Specifically, he said that theused!
Market is on the ‘cusp of a pick-up in volatility,’ says Wolfe Research’s Ginsberg
Beware of some seasonal tailwinds that suggest the market may be on the “cusp of a pick-up in volatility,” according to Wolfe Research’s Rob Ginsberg. Despite relative stability in the CBOE volatility index over the past few weeks, the managing director said in a Tuesday note that the indicator tends to “come alive in Mid-February into late March.” “Now, we never want to put too much weight on seasonal patterns, but this does line up quite nicely with a handful of the divergences that we’ve flagged over the past week or so,” he wrote. He added that “divergences are horrible timing tools, but as they continue to build, and with seasonal tailwinds for volatility, if the bears are going to have the moment to shine, this might be it.”
Regional bank stocks fall as New York Community Bancorp troubles continue
Shares of NYCB dropped in premarket trading on continued concerns about the bank’s potential loan losses and a credit rating downgrade by Moody’s Investors Service.
Stocks open higher, S&P 500 nears 5,000 level
Enphase shares soar after earnings, carrying solar sector higher
Enphase shares were up more than 16% in premarket trading after the company’s CEO forecasted that the solar market could hit a bottom in the first quarter this year and then start to recover. Enphase reported quarterly profits Tuesday that largely met Wall Street’s expectations, with earnings per share coming in at 54 cents vs. 55 cents expected. The solar company’s gross privately margins also improved quarter over quarter and year over year. Enphase was slammed in 2023 as high interest rates depressed demand and left the company with too much inventory on hand. CEO Badri Kothandaraman told analysts during ther the company’s earnings call that the market could bottom in the first three months of this year. Enphase manufactures �are!
See the stocks making the biggest moves before the bell
These are some of the stocks making notable moves in premarket trading:
- Snap — The social media company tumbled 31%, posting worse-than-expected revenue and offering a soft outlook.
- Yum Brands — Shares slipped 1.8% after the KFC, Taco Bell, and Pizza Hut parent reported fourth-quarter earnings and revenue that missed expectations.
- CVS — The stock added less than 1% after CVS exceeded Wall Street expectations for its fourth quarter, citing strength in its health services business. But the company cut its full-year outlook citing and!
Roblox pops 12% on strong earnings, guidance
Roblox shares rallied 12% before the bell after the video game developer topped Wall Street’s estimates and issued strong full-year guidance. The company reported a loss per share of 52 cents on $1.13 billion in bookings, its highest quarterly bookings figure ever. For the full year, the company expects bookings to range between $4.1 billion and $4.28 billion.
Shares of NYCB rebound after bank announces new executive chairman
Shares of NYCB surged in premarket trading after the bank announced that former Flagstar Bank CEO Alessandro DiNello will become the company’s executive chairman, effective immediately. The move follows a credit rating downgrade by Moody’s has caused NYCB’s stock to plummet. The bank has scheduled a conference call to discuss these announced!
Alibaba shares jump on buyback news
Alibaba shares jumped after the Chinese e-commerce giant announced that it would be accelerating its share buybacks, despite missing China’s market expectations for sales. U.S. listed shares of the company rose 3.2% in premarket trading after it announced its plan to increase the size of its share buyback program by $25 billion and its quarterly revenue.
