Stock market news for May 14, 2024

2 Hours Ago

Nasdaq Composite closes at new record high

U.S. stocks closed higher on Tuesday afternoon.

The Nasdaq Composite jumped to a new closing high, adding 0.75% to settle at 16,511.18. The S&P 500 gained 0.48% to finish at 5,246.68, while the Dow Jones Industrial Average added 126.60 points, or 0.32%, closing at 39,558.11.

— Lisa Kailai Han

2 Hours Ago

Inflation is persisting at levels too high to justify rate cuts this year, according to strategist

The Federal Reserve is unlikely to cut rates this year, according to Verdence Capital Advisors’ Chief Investment Officer Megan Horneman.

While Horneman also views a rate hike as unlikely, she believes the U.S. central bank will be forced to keep rates on hold for the remainder of the year as inflation persists.

“It’s a problem that they’ve exacerbated by taking such a dovish tone and — as early as last year — letting the markets price in so many rate cuts,” she said. “They really need to get these markets to be more realistic on where interest rates are going to go.”

— Lisa Kailai Han

3 Hours Ago

Negative economic surprises will eventually drag stocks down, Citi says

The market has reacted positively to negative economic surprises in recent times, but Citi believes this “bad news is good news” narrative will soon change.

“Seasonally, surprises tend to trough around now and, with Fed hikes off the table for the near future, good economic news will likely be welcomed by risky assets,” wrote analyst Nathaniel Rupert.

He added, “However, with cracks appearing in the labor market, more below-consensus data would eventually weigh on equities (even though the first cut may be viewed positively), as would a tightening in financial conditions in our view.”

— Lisa Kailai Han

3 Hours Ago

S&P 500 can see summer rally, recover quarterly losses: BofA

There is reason to believe the S&P 500 could be in for a summer rally and that the recent pullback will be just a blimp, according to Bank of America.

“If the SPX follows bullish seasonality and positive breadth signals, the index should embark on a summer rally,” Stephen Suttmeier, the firm’s technical research strategist, wrote to clients on Tuesday. “This suggests that the April into May corrective phase is likely a bullish continuation pattern.”

Despite a tough start to the second quarter, a recent return to gains has pushed the broad index just 0.2% off its flatline for the three-month period. The index is up nearly 10% on the year.

— Alex Harring

4 Hours Ago

Paramount Global shares slide on CNBC report that Sony is ‘rethinking’ acquisition

Paramount Global fell more than 7% after a report from CNBC’s David Faber that Sony is “rethinking” its offer to buy the company.

Sony and Apollo sent a letter earlier this month to Paramount Global’s board expressing interest in an all-cash $26 billion offer for the company. Sony would be the majority shareholder and Apollo a minority stakeholder.

Many of Paramount Global’s common shareholders publicly supported the Sony-Apollo offer over a competing bid from Skydance Media, which did not pay as large of a premium to as many class B shareholders.

The Paramount Global special committee said on May 3 that it would end exclusive talks with Skydance Media and its two private equity backers, KKR and RedBird Capital, to examine the Sony-Apollo bid.

— Alex Sherman

4 Hours Ago

OpenAI event ‘raises the bar’ on AI chatbots, Bank of America says

OpenAI’s Monday event highlighting its new desktop app and some refreshes “raises the bar, again, for consumer chatbots,” according to Bank of America analyst Vivek Arya.

He wrote in a Tuesday note that the event “ups the ante for AI assistant,” adding that semiconductor stocks should see multiyear growth tailwinds from the computing and networking capabilities needed to appease the expanding artificial intelligence use cases.

Analyst Wamsi Mohan also highlighted Apple as a potential beneficiary from OpenAI and multimodal assistants and the potential productivity gains.

“Much of the demo used a ‘hardwired’ iPhone to lower latency of real time interaction,” he wrote. “Maintain Buy on benefits from GenAI at edge with gross margin upside and momentum in Services.”

Even so, Rosenblatt’s Barton Crockett views the event as a potential competitive pressure point for Alphabet ahead of its Google I/O event. The developments also seem to turn up the head on Apple, which has struggled for years to create similar capabilities for its Siri component, he added.

“We suspect that Apple is nowhere near, internally, to what OpenAI just demoed,” he wrote. “If Google can’t show an ability to match OpenAI at I/O, then Apple will be under meaningful pressure we believe to partner with OpenAI to modernize Siri for the current state of AI.”

— Samantha Subin

4 Hours Ago

6 stocks in the S&P 500 hit new 52-week highs

During Tuesday’s trading session, 24 stocks in the S&P 500 hit new 52-week highs.

Of these names, six stocks reached new intraday highs. Here are the names that met this milestone:

• Aflac Inc. trading at all-time-high levels back through our history in 1973
• Brown & Brown trading at all-time highs back to when it became publicly traded on the New York Stock Exchange in 1997
• Goldman Sachs trading at all-time-high levels back to its initial public offering in May 1999
• Analog Devices trading at all-time highs back through our history to 1972
• NXP Semiconductors trading at all-time highs back to its IPO in August 2010
• Welltower trading at all-time-high levels back to its incorporation as Health Care REIT in 1985

— Lisa Kailai Han, Christopher Hayes

5 Hours Ago

AMC, GameStop slip from highs of the day

An AMC theater is pictured in Times Square in the Manhattan borough of New York City.

Carlo Allegri | Reuters

Meme stocks were losing steam in early afternoon trading and hovering well below their highs of the day.

Shares of GameStop were last up 33.7% for the day at $40.72 per share. The stock’s high of the day came at the opening bell, when it hit $64.83 per share.

See Chart…

GameStop is trading well below its opening level from Tuesday morning.

AMC Entertainment has similarly cooled off. The stock was last up 23.7% at $6.42 per share. It traded as high as $11.88 per share Tuesday morning.

— Jesse Pound

5 Hours Ago

On Holding rallies on earnings

On Holding shares headed for their best day in more than a year following a strong earnings report.

The shoemaker climbed nearly 17.5% in midday trading. If that holds through close, it will mark the stock’s biggest one-day gain since March 2023, when the stock soared more than 26% in a session.

See Chart…

On Holding, 1 day

Tuesday’s jump came after the Swiss company posted adjusted earnings per share and net sales that were both higher than forecast by analysts polled by FactSet. On has also benefited from demand for more comfortable clothing such as padded shoes.

— Alex Harring

6 Hours Ago

See the stocks moving midday

These are some of the stocks making the biggest moves midday:

• Alibaba — The Chinese technology company shed 7% after posting an 86% drop in net income from a year ago for its fiscal fourth quarter. Elsewhere, revenue topped expectations.
• Sony — U.S.-listed shares jumped 5.3% after quarterly revenue came in at 3.5 trillion yen, above the consensus expectation of 2.89 trillion yen from analysts polled by LSEG. However, operating profits came in lower than analysts forecast.
• Vodafone — U.S. shares popped 5% after the U.K.-based telecommunications company posted full-year profit that beat expectations.

Click here for the full list.

— Alex Harring

6 Hours Ago

Energy stocks lagging behind the broader market

Cooling towers at Marathon Refinery in Carson, California, on April 3, 2024.

Myung J. Chun | Los Angeles Times | Getty Images

The energy sector underperformed the S&P 500 on Tuesday, pulling back around 0.5% while the broad market index gained 0.2%. Marathon Petroleum led Tuesday’s downturn, declining 3.7%.

Month to date, energy and consumer staples are neck and neck for worst-performing sectors. Both groups are down nearly 0.8%.

See Chart…

The Energy Select Sector SPDR Fund (XLE) and S&P 500 over the last month

7 Hours Ago

Credit card delinquencies rise to nearly 13-year high

Credit card default rates hit their highest level in nearly 13 years at the beginning of 2024, the New York Federal Reserve reported Tuesday.

The central bank’s Quarterly Report on Household Debt and Credit showed the share of “seriously delinquent” debt, or at least 90 days behind, rose to 6.86% of outstanding balances in the first quarter of 2024, the highest since Q2 of 2011. At the same time, auto delinquencies moved to 2.78%, the highest since Q2 of 2010.

Those increases came even though total credit card balances fell to $1.12 trillion, a decline of $14 billion. However, total consumer debt rose to $17.69 trillion, an increase of $184 billion, or 1.1%.

— Jeff Cox

7 Hours Ago

U.S. federal debt boosts economy short term but poses long-term challenges, Wolfe Research says

Although U.S. federal debt boosts the economy in the short term, Wolfe Research foresees it posing key risks to the market over time.

“We expect transfer payments, the CHIPS Act, the IRA, and infrastructure spending to continue to provide fiscal tailwinds for the economy and stock prices in the quarters ahead,” wrote chief investment strategist Chris Senyek. “However, the huge problem is that U.S. federal debt is on an unsustainable long-term trajectory! More specifically, the CBO projects that publicly held federal debt will reach an all-time high in 2029!”

Senyek noted two specific key risks.

For one, “bond vigilantes” could push back, ultimately sending yields higher. Additionally, interest payments could also squeeze out spending faster than expected, the analyst added.

— Lisa Kailai Han

8 Hours Ago

Powell says Fed will ‘need to be patient’ on inflation

Federal Reserve Chair Jerome Powell arrives to a news conference following a Federal Open Market Committee meeting in Washington, D.C., on March 22, 2023.

Alex Wong | Getty Images

Federal Reserve Chair Jerome Powell said Tuesday that inflation data this year has been disappointing and will require patience from the central bank on monetary policy.

“We did not expect this to be a smooth road. But these [inflation readings] were higher than I think anybody expected,” he told a bankers’ group in Amsterdam. “So what that has told us is that we’ll need to be patient and let restrictive policy do its work.”

— Jeff Cox

8 Hours Ago

Wheat futures hit highest prices since July 2023

A combine harvests wheat near Kramatorsk, in Donetsk region, on Aug. 4, 2023.

Anatolii Stepanov | AFP | Getty Images

Wheat prices hit their highest level since July 31, 2023, during early morning trading on Tuesday.

The commodity’s July-dated futures briefly hit a high of 696 cents per bushel. Last July, wheat had traded at as high as 703 cents.

Wheat prices rose after frosts damaged crops in Russia, the country that exports the most wheat globally.

— Lisa Kailai Han, Gina Francolla

9 Hours Ago

Stocks open little changed

Stocks opened little changed on Tuesday morning, following April’s hotter-than-expected reading of the producer price index.

The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite were all trading near flat shortly after market open.

— Lisa Kailai Han

9 Hours Ago

Stocks moving before the bell

Here are some of the stocks making moves in premarket trading:

Meme stocks — GameStop jumped 119%, adding to Monday’s 74.4% gain, after the man who fueled the 2021 GameStop frenzy, “Roaring Kitty,” posted online for the first time in about three years. AMC soared 105%, while Reddit and Robinhood rose 4.6% and nearly 7%, respectively.

Alibaba — U.S.-listed shares dropped 4% after the Chinese e-commerce retailer reported an 86% drop in profits for its fiscal fourth quarter. However, Alibaba beat revenue expectations.

Sony — The PlayStation maker’s U.S.-listed shares added 3.5% after posting quarterly revenue of 3.5 trillion yen, topping the LSEG consensus estimate of 2.89 trillion yen. Operating profits came in lighter than expected.

— Michelle Fox

10 Hours Ago

Producer price index rises more than expected

The producer price index rose more than expected in April, raising concerns that the Federal Reserve will not be able to cut rates as soon as expected. The PPI rose 0.5% last month. Economists polled by Dow Jones expected a 0.3% increase in PPI.

However, March’s PPI reading was revised to a 0.1% decline.

— Fred Imbert

10 Hours Ago

Copper stocks rise after metal hits 2022 high

An employee works on the production line of copper foil sheet at a factory in Dongying, Shandong province of China, on Feb. 20, 2022.

Zhou Guangxue | Getty Images

Copper stocks popped in Tuesday’s premarket as the metal reached multiyear highs.

The Global X Copper Miners ETF (COPX) advanced more than 1% before the bell, putting the fund on pace for its fourth straight positive session. That leg up comes as CME Copper and LME Copper touched their highest levels going back to March and April of 2022, respectively.

— Alex Harring, Gina Francolla

10 Hours Ago

The U.S. economy still looks ‘too hot,’ according to Barclays

Of the potential scenarios for the macroeconomy in the latter half of 2024, it is most likely that the U.S. will not see any sharp weakening in the near term.

“There are several possible paths for the US macro-economy going forward. … A second is that the US is still too hot, in which case higher yields and a stronger USD pose challenges for markets,” wrote Barclays analyst Ajay Rajadhyaksha. “We think the second is most likely; more importantly, markets seem very convinced of just one of these three outcomes.”

Rajadhyaksha added that at least for the time being, he prefers staying in cash assets.

— Lisa Kailai Han

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