Major indexes were higher in early afternoon trading Wednesday, led by gains for banking stocks, as the market rebounded from sharp declines yesterday.
The Dow Jones Industrial Average and S&P 500 were up 0.6% and 0.2%, respectively, while the Nasdaq Composite was down 0.1% The major indexes hit record highs earlier this week but tumbled on Tuesday, led by a selloff in chip and energy stocks, while investors digested a slew of corporate earnings reports.
Chip stocks were gaining ground Wednesday, with the PHLX Semiconductor Index (SOX) up 0.5% as AI investor favorite Nvidia (NVDA) rose nearly 2% following a steep decline yesterday. Broadcom (AVGO), Arm Holdings (ARM), Micron (MU) and Marvell Technology (MRVL) were also solidly higher.
Other large-cap technology stocks were down across the board. Apple (AAPL), which hit a record high on Tuesday, Microsoft (MSFT), Meta Platforms (META), Alphabet (GOOGL) and Amazon (AMZN) were all losing ground.
Several of many of the oil companies that fell on Tuesday—including ExxonMobil (XOM), Chevron (CVX), Valero (VLO) and Diamondback Energy (FANG)—were higher Wednesday, as crude oil prices stabilized after two straight days of steep declines.
Among other noteworthy movers, shares of Morgan Stanley (MS) were up 8% after the investment banking giant reported better-than-expected earnings. U.S. Bancorp (USB) shares were up after 5% after reporting strong results. The KBW Nasdaq Bank Index rose 2% as Morgan Stanley and US Bancorp were just the latest large financial institutions to report strong results in recent days.
United Airlines (UAL) shares were 12% higher, trading at their highest levels since early 2020, after the carrier released strong results and announced a stock buyback program.
The economic data calendar is light on Wednesday but picks up in the coming days. Market participants are keeping close tabs on economic data and comments from Federal Reserve officials for indications that the economy remains on sound footing and that the central bank is poised to continue cutting interest rates.
The yield on 10-year Treasurys, which had increased in recent weeks as expectations for big rate cuts by the Fed have subsided, was at 4.01%, down from 4.04% late yesterday. Earlier in the session the yield slipped below 4% for the first time since early last week.
Gold futures were up slightly at around $2,690 an ounce. Bitcoin rose to near $68,000, trading at its highest levels since late July.
US Bancorp Stock Jumps as Earnings Top Expectations
15 minutes ago
U.S. Bancorp (USB) shares jumped Wednesday as its profit got a boost from higher-than-anticipated net interest income.
The bank reported third-quarter earnings per share (EPS) of $1.03, $0.04 more than estimates of analysts surveyed by Visible Alpha. Revenue fell 2.4% year-over-year to $6.86 billion, slightly short of forecasts.
Net interest income (NII) of $4.17 billion was down 2.4% from 2023, but up 2.8% from the second quarter. It also exceeded expectations. Net interest margin increased to 2.74% from 2.67% in the previous quarter, although it was lower than last year’s 2.81%.
As with many of its rivals, U.S. Bancorp added to its reserves for credit losses, increasing them by 8.2% to $557 million year-over-year.
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Shares of U.S. Bancorp rose nearly 5% Wednesday to their highest level since early last year. They’re up about 14% in 2024.
United Soars on Strong Earnings, Stock Buyback News
1 hr 47 min ago
United Airlines (UAL) shares soared after the carrier unveiled plans for a $1.5 billion share buyback, its first since the pandemic, and also reported quarterly results that beat analysts’ estimates.
JanValls / Urbanandsport / NurPhoto / Getty Images)
Late Tuesday, United reported third-quarter adjusted earnings per share (EPS) of $3.33, ahead of its own guidance and expectations of analysts polled by Visible Alpha. It also projected adjusted EPS of $2.50 to $3.00 a share in the fourth quarter, with the midpoint below the $2.92-per-share Visible Alpha estimate.
The airline said the glut in airline capacity that had plagued the industry this year had been addressed.
“As predicted, unproductive capacity left the market in mid-August, and we saw a clear inflection point in our revenue trends that propelled United to exceed Q3 expectations,” United Chief Executive Officer (CEO) Scott Kirby said.
United’s $1.5 billion share buyback marks its first repurchase plan since it suspended its program in 2020 during the COVID-19 pandemic.
The stock was up 9% in recent trading, at its highest level since early 2020.
Morgan Stanley Stock Surges After Strong Results
2 hours ago
Morgan Stanley (MS) shares jumped Wednesday morning after the company became the latest bank to beat estimates for the third quarter, with revenue and profits rising year-over-year.
The bank reported $15.38 billion in revenue for the quarter, up from $13.27 billion last year and over a billion dollars more than analysts had expected, according to projections compiled by Visible Alpha. Morgan Stanley reported an increase in net interest income (NII) to $2.2 billion, up from $1.98 billion, which only some of its banking rivals have so far managed to do this quarter.1
Profits also came in well above estimates at $3.2 billion, above the $2.44 billion in net income Morgan Stanley reported last year.
Morgan Stanley shares rose more than 8% in morning trading, leaving them up roughly 30% this year, outpacing the gains for the S&P 500 over the period.
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Nvidia Levels to Watch After Tuesday’s Drop
3 hr 28 min ago
Nvidia (NVDA) shares moved higher in premarket trading Wednesday after falling sharply yesterday, just a day after setting a record closing high.
The decline Tuesday came as Bloomberg reported that the Biden Administration is mulling AI chip export curbs to some Middle Eastern countries. The news tempered optimism about surging demand for Nvidia’s chips from tech giants hyperscaling their AI infrastructure amid a backdrop of tight supply.
Nvidia shares broke out above a multi-month symmetrical triangle earlier this month, though the breakout occurred on below-average volume, indicating a lack of conviction behind the move.
Investors should watch key support levels on Nvidia’s chart around $125, $115, and $97, while also keeping an eye on a measured moved price target at $177. The stock was up 0.8% at $132.65 in recent premarket trading.
Read the full technical analysis piece here.
Futures Point to Slightly Higher Open for Major Indexes
4 hr 13 min ago
Futures tied to the Dow Jones Industrial Average were up fractionally.
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S&P 500 futures were up 0.1%.
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Nasdaq 100 futures were up 0.2%.
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