Equity Indexes Wrap: Solar Stocks Get a Boost from Analyst Comments; Health Care Lags Again
26 minutes ago
The Dow
Boeing (BA) led the index, rising 3.1% after UBS raised its price target on the jet maker’s stock and reiterated its buy rating.
Microsoft (MSFT) rose 1.3% to close at $370 after Mizuho Securities raised its price target to $450 from $420. It was one of several tech stocks to outperform the index today. Intel (INTC) gained 2.2%, continuing to rise after launching a line of new AI chips yesterday. Salesforce (CRM) rose 1.7%.
Verizon (VZ) led the index’s laggards, falling 1.3% alongside other telecom stocks after the Chamber of Commerce said it opposed plans for the Federal Communications Commission to reinstate net neutrality rules rescinded by the Trump administration.
Health care stocks underperformed for a second day. Johnson & Johnson (JNJ) lost 1.1%, while Merck (MRK) fell 0.7% and UnitedHealth Group (UNH) slipped 0.6%.
Chevron (CVX) shares fell 0.4% as chief financial officer Pierre Breber reportedly told employees to “do better” after missing several 2023 performance metrics.
The S&P 500
First Solar (FSLR) shares rose 6.6% after being named a top solar stock by Jefferies.
Steel Dynamics (STLD) rose 4.5% after its fourth-quarter guidance topped Wall Street estimates.
Oracle (ORCL) gained 3%, making up some of the ground it lost earlier this week when it tumbled on a disappointing earnings report.
Broadcom (AVGO) climbed 2.1%, rising for a seventh straight session to cap off its best week ever in which the stock gained about 20%.
Other tech giants gained, with Amazon (AMZN) rising 1.7%, Nvidia (NVDA) up 1.1%, and Meta (META) advancing 0.5%.
Ameren (AEE) lost 4.4% after KeyBanc downgraded the utility, citing the state of Illinois’s rejection of its proposed rate increase.
Zions Bancorp (ZION) fell 4% after Baird downgraded the stock to neutral from outperform after a rally that saw the stock’s price increase 29% in a month.
Lennar (LEN) shares lost 3.6% after the homebuilder reported lower-than-expected gross margins on new homes in the most recent quarter.
The Nasdaq-100
JD.com (JD) led the index higher. It gained 4.5% after the Chinese government gave lenders more than $100 billion in one-year loans as it seeks to stimulate a sluggish economic recovery.
Costco (COST) rose 4.5% after reporting better-than-expected quarterly earnings as shoppers turned to the members-only retailer for its low-cost groceries and other necessities.
Enphase Energy (ENPH) rose 3.1% after getting a buy rating from Jefferies. The firm is poised to benefit from falling interest rates and clarity about the Inflation Reduction Act’s solar energy provisions next year.
Shares of CrowdStrike Holdings (CRWD) rose 2.9% after BMO Capital lifted its price target for the cybersecurity company to $270 from $238.
Lucid Group (LCID) slid 7.2%, giving up some of yesterday’s 15% surge after it said it had assembled almost 800 cars at that Saudi Arabia factory it opened in September.
Comcast (CMCSA) shares slipped 0.4% after it joined the Chamber of Commerce in opposing the FCC’s net neutrality proposal. T-Mobile (TMUS) also fell 0.5%.
Trading Interest in Futures and Options Markets Hits Record High at ICE
1 hr 18 min ago
Trading interest in futures and options markets on platforms operated by the Intercontinental Exchange (ICE) reached an all-time high this week, the exchange reported.
Open interest, or the number of outstanding investment contracts, hit 86 million Wednesday, ICE said, surpassing the record of 85.8 million previously established on June 10, 2021.
The record represents surging interest in ICE’s commodity and energy contracts, in which open interest has risen 21% year-to-date compared with a year ago. The increased interest has coincided with a somewhat volatile year for global energy markets.
-Lyle Niedens
Solar Stocks Jump on Analyst Optimism
2 hr 34 min ago
Shares of solar companies popped Friday after analysts at Jefferies expressed confidence the stocks, which have suffered badly under the weight of high interest rates and economic uncertainty this year, will fare better in 2024.
Jefferies initiated coverage of First Solar (FSLR), Enphase Energy (ENPH), and Sunrun (RUN) with buy ratings and price targets of $211, $145, and $25, respectively. The firm also initiated coverage of Array Technologies (ARRY) and SunPower (SPWR) with hold ratings and respective price targets of $18 and $6.
Analysts explained that “exposure to utility-scale, strong backlogs and balance sheets,” differentiated the first three companies from the other two. Though the firm sees opportunity for the entire sector next year, with catalysts including “clarity on the Inflation Reduction Act and stabilization of interest rates.”
Solar stocks have struggled this year as interest rates have raised the cost of financing large-scale infrastructure projects and reduced demand among consumers making home improvements. Those headwinds have more than offset the benefits of policy support from governments seeking to accelerate the renewable energy transition.
First Solar was the best-performing stock in the S&P 500 Friday afternoon, gaining more than 5%. Enphase Energy and SunRun each rose more than 3%.
Costco Stock Jumps to Record on Earnings Beat
3 hr 44 min ago
Costco (COST) shares climbed over 4% to a record high in intraday trading Friday after reporting fiscal first-quarter results that beat analysts’ expectations, as consumers flocked to Costco’s groceries and other products in search of lower prices.
The membership-only retailer reported net sales of $56.72 billion, up 6.1% from the same period a year ago and above analyst estimates. Net income at $2.2 billion or $4.86 per share was up from $1.87 billion or $4.20 per share the year before and also beat expectations.
The gains came as memberships rose and sales of items like groceries surged, with Costco reporting it sold more than 4 million pies over the Thanksgiving weekend alone. The number of paid household members rose 7.6% year-over-year, while membership fee revenue jumped 8.2% to $1.08 billion.
Costco also announced a special cash dividend of $15 per share due to be paid on Jan. 12.
With Friday’s gains, shares of Costco have risen more than 45% year-to-date.
-Kevin George
Midday Movers
4 hr 20 min ago
Steel Dynamics Inc. (STLD): Shares of the steel maker rose 6% after it forecast fourth-quarter earnings of between $2.60 and $2.64 per share, more than Wall Street was expecting.
First Solar (FSLR): Shares of the solar tech company rose 5% after Jefferies analysts initiated coverage with a buy rating, citing expectations for a turnaround in solar panel demand as interest rates come down next year.
Costco Wholesale Corp. (COST): Shares of the budget-friendly retailer gained 4% after its quarterly earnings report topped Wall Street estimates.
Ameren Corp. (AEE): Shares fell 4% after KeyBanc downgraded the utility to sector weight from overweight, citing the negative growth effects of the Illinois Commerce Commission’s rejection of Ameren’s proposed rate increase for natural gas delivery.
Elevance Health Inc. (ELV): Shares of the health insurer fell more than 2% following reports it was one of several firms in talks to submit a bid for Cigna Group’s (CI) Medicare Advantage unit. Reports indicate the unit could be sold for as much as $3 billion.
U.S. Business Activity Ticked Up to Five Month High in December
5 hr 27 min ago
Business activity in the U.S. rose at its fastest pace in five months in December, according to preliminary data from S&P Global.
The S&P Global Flash U.S. Composite PMI Index rose to 51 in December, the highest since July, from 50.7 the month before. The reading, though modest by historical standards, marks the eleventh consecutive month in which the index has held above 50, signifying economic expansion.
Accelerating business activity was driven by the services sector, which got a boost from more advertiser spending and looser financial conditions. Manufacturing activity, on the other hand, declined modestly as new orders fell.
Both manufacturers and service providers were more optimistic in their outlook but continued to express concern about the shakiness of the demand recovery.
3 Charts to Watch Today: Lucid, Foot Locker, QYLD ETF
6 hr 33 min ago
Lucid Group
Source: TradingView.com.
Shares in EV maker Lucid Group (LCID) surged 14.5% on Thursday after the company said that it has assembled almost 800 cars at its Saudi Arabian factory, which opened in September, Reuters reported.
Thursday’s price action saw the resumption of bullish momentum, with the stock gapping above the 50-day moving average on the highest single-day share turnover since mid-July. Looking ahead, it’s worth keeping an eye on the 200-day moving average, which may act as a line of resistance.
Foot Locker
Source: TradingView.com.
Foot Locker (FL) hit the ground running yesterday, climbing 10%, after the athletic footwear retailer received an upgrade from investment bank Piper Sandler.
Foot Locker’s share price appears to have formed an inverse head and shoulders pattern, a chart formation that investors typically interpret as a market bottom. The stock indicated an upward bias yesterday by closing above a pennant that had formed around the 200-day moving average. Key areas on the chart to monitor include overhead resistance around $40 and a potential refill of two prominent gaps that have formed over the past month.
Global X NASDAQ 100 Covered Call ETF
Source: TradingView.com.
Although the Global X NASDAQ 100 Covered Call ETF (QYLD) didn’t make a significant chart move on Thursday, it’s worth watching in today’s triple witching session, which coincides with the index’s annual rebalancing.
The ETF’s share price has failed to gain momentum after breaking above the top trendline of a descending channel but remains comfortably above the pattern. Investors should watch for possible triple witching/rebalancing-related spikes through the 200-day or 50-day moving averages that could turn out to be short-lived and potentially offer attractive entry opportunities.
-Tim Smith
Early Market Movers
7 hr 18 min ago
Gains:
- JD.com (JD): Shares of the Chinese e-commerce company rose 5% after the Chinese government gave lenders more than $100 billion in one-year loans as part of its ongoing efforts to stimulate the flagging economy.
- Costco Wholesale Corp. (COST): Shares of the discount retailer gained about 3% after the company reported better-than-expected fiscal first-quarter earnings as same-store sales held steady.
- First Solar (FSLR): Shares of the solar tech company rose 3% after analysts at Jeffries initiated coverage of the stock with a buy rating, citing the company’s strong backlog and improving margins.
Losses:
- Roku Inc. (ROKU): Shares of the entertainment streaming device maker fell almost 5% after analysts at MoffettNathanson downgraded the stock to sell from neutral, citing an overstretched valuation.
- Darden Restaurants Inc. (DRI): Shares of the chain restaurant operator fell 3% after quarterly sales of $2.727 billion fell short of Wall Street estimates.
- Lennar Corp. (LEN): Shares of the homebuilder fell 2% despite its fourth-quarter earnings surpassing Wall Street estimates. Gross margin for the quarter was 24.2%, down from last year and below analyst forecasts.
Stock Futures Higher as Fed Rally Continues
8 hr 32 min ago
Futures contracts connected to the Dow Jones Industrial Average were up 0.2% in premarket trading Friday.
S&P 500 futures rose 0.2%.
Nasdaq-100 futures gained 0.3%.
