Stocks were lower Thursday afternoon as investors reacted to a barrage of quarterly earnings reports, while shares of major tech companies gave back some of the previous session’s big gains.
The Dow Jones Industrial Average and S&P 500 each were down 0.2% in recent trading, while the Nasdaq Composite slipped 0.6%. Major indexes turned in their best one-day performance in more than two months on Wednesday, when better-than-expected inflation data revived hopes that the Federal Reserve will continue cutting interest rates and several large banks reported strong quarterly results.
Bank earnings were in focus again today. Shares of Morgan Stanley (MS) were up 2.5%, after hitting an all-time high this morning, as the financial services giant’s results beat Wall Street expectations. Bank of America (BAC) was down about 2% even as its earnings topped estimates, while U.S. Bancorp (USB) and PNC Financial Services Corp. (PNC) slid 6% and 2.5%, respectively, after reporting results.
Mega-cap technology stocks, which were among the big gainers yesterday, were mostly lower on Thursday, led by declines of about 4% for Apple (AAPL) and Tesla (TSLA). Nvidia (NVDA), Alphabet (GOOGL), Amazon (AMZN) and Meta Platforms (META) also lost ground, while Microsoft (MSFT) inched higher.
Shares of UnitedHealth Group (UNH) were down 5%, leading Dow decliners, after the company reported disappointing quarterly results.
Chip stocks were mostly higher after Taiwan Semiconductor Manufacturing Co. (TSM), the world’s largest contract chip manufacturer, posted better-than-expected earnings and issued a bullish outlook for AI demand. Chip equipment makers KLA Corp (KLAC), Lam Research (LRCX) and Applied Materials (AMAT) each rose about 6%, while U.S.-traded shares of Taiwan Semi advanced 4.5%.
On the economic front, weekly jobless claims figures and monthly retail sales data released this morning came in largely as expected. Investors are keeping a close eye on economic indicators as they look for information that could affect the Fed’s decision-making on interest rates in the months ahead.
The yield on the 10-year Treasury, which is correlated with expectations for interest rates, was at 4.59%, down from 4.65% late yesterday. The yield recorded its biggest decline since August on Wednesday in reaction to the encouraging inflation data.
Bitcoin was at $99,700, down from an overnight high of $100,800. The digital currency surged above $100,000 yesterday for the first time in more than a week.
Gold futures were up 1.1% at around $2,750 an ounce, while WTI crude oil futures fell nearly 2% after a big gain yesterday.
Target Lifts Q4 Sales Forecast on Strong Holiday Shopping
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Target (TGT) on Thursday lifted its projection for comparable store sales growth in the fourth quarter on the back of a stronger-than-expected holiday shopping season.
The retailer expects comparable sales to be up 1.5% in the fourth quarter compared to the same time a year ago, up from the previous projection of flat comparable sales that Target gave in its third-quarter earnings report.
Kamil Krzaczynski / AFP / Getty Images
Target saw comparable sales rise 2% in November and December, with a 3% bump in traffic across its stores and website, and record sales numbers during the Black Friday and Cyber Monday sales events.
Despite the lifted comp sales projection, Target kept its previous projected earnings per share (EPS) ranges at the same level. Comparing the holiday shopping data to its disappointing third-quarter results, Target said it has seen “meaningful acceleration” in some discretionary categories like apparel and toys.
Target shares were down 1.5% in mid-afternoon trading.
Tesla Stock Price Levels to Monitor
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Tesla (TSLA) shares lost ground Thursday after posting the top performance in the S&P 500 yesterday, extending a volatile run for the stock.
Tesla shares are 16% below their mid-December high but have surged 64% since the November presidential election, in part due to expectations that the EV maker’s self-driving robotaxi ambitions could be fast-tracked under the incoming Trump administration.
Tesla shares have generally trended sharply higher since breaking out from an ascending triangle in early November. More recently, the stock has consolidated within a flag pattern, indicating a continuation of the strong uptrend. However, it’s also worth pointing out that trading volumes have generally declined throughout the stock’s post-election rally, suggesting that some larger investors may remain on the sidelines.
Bars pattern analysis, which takes the stock’s strongly trending move from October 2019 to February 2020 and repositions it from November’s ascending triangle breakout, forecasts a bullish longer-term price target of around $775.
Investors should monitor key support levels on Tesla’s chart around $300 and $265.
The stock was down nearly 4% at around $412 in recent trading, giving back a good portion of yesterday’s 8% surge.
Read the full technical analysis piece here.
Morgan Stanley Hits Record High as Earnings Top Expectations
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Morgan Stanley (MS) shares rose Thursday after the bank posted better-than-anticipated results, as revenue from its equities trading unit soared and investors poured more money into initial public offerings (IPOs).
Morgan Stanley reported fourth-quarter earnings per share (EPS) of $2.22, nearly triple what it was a year ago. Revenue jumped 26% year-over-year to $16.22 billion. Both easily exceeded consensus forecasts of analysts polled by Visible Alpha.
Equity net revenue rose 51% to $3.33 billion on gains across all the company’s business lines and regions, with Morgan Stanley pointing to increased client activity, especially in its Prime Brokerage and Asia market. Equity underwriting revenue doubled to $455 million, which it said was driven by “higher follow-ons and IPOs as clients strategically raised capital in a more constructive environment.” Strong stock market gains lifted asset management and related fees 11% to $1.56 billion.
CEO Ted Pick called it “an excellent fourth quarter,” with a 20% return on tangible common equity (ROTCE) that “followed three quarters of consistent execution.”
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Shares of Morgan Stanley were up nearly 3% in recent trading after hitting an all-time high this morning.
Symbotic Stock Pops on Robotics Partnership With Walmart
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Shares of robotics company Symbotic (SYM) jumped about 20% Thursday morning after the company announced an expanded partnership with Walmart (WMT) that includes Symbotic buying Walmart’s robotics business, and Walmart funding development of new automation programs.
Symbotic is acquiring Walmart’s Advanced Systems and Robotics business for $200 million along with up to $350 million in potential future payments. In addition, Walmart will pay Symbotic $520 million over the course of the development of a new robotics platform.
The companies said Thursday that Symbotic will develop “an advanced solution leveraging Symbotic’s A.I.-enabled robotics platform to offer Walmart customers greater shopping convenience through accelerated online pickup and delivery options at stores.”
Assuming the project hits certain “performance criteria,” Walmart will buy Symbotic’s system for 400 “accelerated pickup and delivery centers” over the next several years.
“This is a highly strategic transaction for Symbotic as we expand upon our long-term relationship with Walmart and broaden our product offering beyond the traditional warehouse to eCommerce settings for last mile delivery,” Symbotic CEO Rick Cohen said.
The companies have worked together to automate parts of Walmart’s robotics projects and supply chain since 2017, and expect Symbotic’s acquisition of Walmart’s robotics business to close in the second quarter of this year.
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Even with the big surge Thursday morning, Symbotic shares are down 23% over the past 12 months.
UnitedHealth Stock Slides After Disappointing Results
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UnitedHealth Group (UNH) shares tumbled in premarket trading Thursday after the company reported fourth-quarter results that missed analysts’ expectations.
The healthcare giant’s revenue grew 7% year-over-year to $100.8 billion, below the Visible Alpha consensus. Its earnings of $5.54 billion, or $5.98 per share, also missed analysts’ estimates. Adjusted earnings per share (EPS) of $6.81 topped expectations.
The company affirmed its 2025 outlook of revenue between $450 billion and $455 billion, EPS of $28.15 to $28.65, and adjusted EPS of $29.50 to $30.00.
Thursday’s results are the company’s first since the CEO of its UnitedHealthcare unit, Brian Thompson, was fatally shot on Dec. 4.
UnitedHealth shares were down 4% in recent premarket trading. Through Wednesday’s close, the stock had gained 5% over the past 12 months, compared to the 25% increase for the S&P 500 over the period.
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Futures Point to Mixed Open for Major Indexes
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Futures tied to the Dow Jones Industrial Average were down 0.3%.
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S&P 500 futures were down fractionally.
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Nasdaq 100 futures were up 0.1%.
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