The Dow Jones Industrial Average eked out gains on Friday to close above 40,000 for the first time, bringing to a close a fourth consecutive winning week for U.S. stocks.
The Dow Jones Industrial Average rose 0.3% Friday, while the inched up 0.1%. Both indexes rose more than 1% over the week. The Nasdaq Composite slipped 0.1% on Friday but finished the week up more than 2%.
The indexes were propelled to record highs on Wednesday by slightly better-than-expected consumer inflation data that revived investor optimism that the Federal Reserve will cut interest rates at some point this year.
GameStop (GME) shares sank nearly 20% on Friday as the meme stock craze that was revived at the start of the week fizzled as quickly as it began. The stock also took a hit from disappointing preliminary quarterly results and the announcement of a major stock offering.
Treasury yields crept higher Friday but finished the week lower due to Wednesday's inflation data.
Copper futures climbed to near-record highs Friday after the International Energy Agency warned the world’s copper and lithium mining projects would be insufficient to meet the demands of the green energy transition.
The Dow climbed early in the morning yesterday to cross 40,000 points for the first time before retreating to close marginally lower. The S&P 500 and Nasdaq Composite also ticked lower.
Stock Indexes Wrap: Energy, Materials Lead Indexes; AI Stocks Lag
May 17, 2024 04:34 PM EDT
The Dow
Boeing (BA) rose 1.1% after shareholders voted to reelect outgoing CEO Dave Calhoun to the jet maker’s board of directors.
Walmart (WMT) gained 1%, continuing to rise after jumping to a record high yesterday following the announcement of better-than-expected first-quarter earnings.
The S&P 500
Energy stocks were among the day’s best performers, led by oil refiner Valero (VLO), up 4.8%. Marathon Petroleum (MPC) and ExxonMobil (XOM) followed, rising 2.8% and 1.5%, respectively.
Freeport-McMoRan (FCX) advanced 4.2% as copper futures climbed steadily to trade near record highs.
Chubb (CB) added 3.6%, building on yesterday’s gains that followed Berkshire Hathaway’s revelation of a 6% stake in the insurance company.
AI stocks slips, including Nvidia (NVDA), down 2%, and Super Micro Computer (SMCI), down 1.8%.
The Nasdaq 100
Advanced Micro Devices (AMD) rose 1.1% after Microsoft said it would offer cloud customers an AMD-based platform that would compete with its Nvidia offerings.
Take-Two Interactive (TTWO) gained 0.8% after the video game company scheduled its hotly anticipated Grand Theft Auto VI for release in the fall of 2025. The company also beat revenue estimates in the first quarter.
Doximity Surges on Earnings Beat, StrongOutlook, Stock Buyback Announcement
May 17, 2024 03:04 PM EDT
Shares in Doximity (DOCS) surged Friday after the digital medical networking company announced earnings that beat Wall Street estimates, provided a better-than-expected current-quarter outlook, and unveiled a share buyback program.
For the fiscal fourth quarter ending March 31, the provider of curated medical news andtelehealth tools reported adjusted earnings of 25 cents per share, comfortably topping forecasts of 20 cents a share. Revenue in the period of $118.1 million improved 6% from a year earlier and beat analysts’ expectations of $116.4 million.
Looking ahead, Doximity expects current-quarter net sales to range between $119.5 million and $120.5 million, with the lower end of that range surpassing forecasts of $119.2 million.
Doximity also unveiled a stock buyback program, announcing that it had authorized the purchase of up to $500 million of its Class A common stock.
Doximity shares were up 17.6% at $27.92 with about an hour left in the session on Friday.
-Timothy Smith
Cracker Barrel Slashes Its Dividend as It Shakes Up Operations, Sending Stock Plunging
May 17, 2024 02:07 PM EDT
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Shares of Cracker Barrel Old Country Store (CBRL) plunged in intraday trading Friday after the restaurant and novelty store chain slashed its dividend as it embarked on what it called a “strategic transformation plan,” and lowered its guidance.
The company announced it would be reducing its quarterly dividend to 25 cents from $1.30 as part of its efforts to modify its capital allocation “to support increased investment in the business to drive organic growth."
Cracker Barrel warned that because of weaker-than-expected traffic, it anticipates its current and fourth-quarter results could be lower than previously thought. In addition, it expects fiscal 2025 to be “an investment year,” with earnings before interest, taxes, depreciation, and amortization (EBITDA) in line or slightly below that of 2024.
Cracker Barrel shares were more than 13% lower Friday afternoon. They’ve lost over one-third of their value since the start of the year.
-Bill McColl
Copper Futures Rise as Record Prices Squeeze Short Sellers
May 17, 2024 01:11 PM EDT
Copper futures climbed on Friday, with front-month contracts trading on U.S. exchanges rising more than 3% to as much as $5.05 per pound, just shy of the $5.12 record hit Wednesday.
Copper futures have risen nearly 30% this year—nearly 14% in April alone—driven up by robust demand and a scarcity of mining projects. The International Energy Agency (IEA) on Friday warned that the world will fail to meet its climate goals without greater investment in mining metals critical to the green energy transition. The IEA estimates that existing and planned mining projects will only supply 70% of the copper and 50% of the lithium countries will need in 2035.
However, the basics of supply and demand don’t account for all of copper’s recent rise. Commodities traders have also faced a short squeeze. Investors, chasing copper’s momentum, have piled into the industrial metal, pushing up the price and forcing short sellers to settle contracts, increasing demand further.
Reddit Stock Soars After Company Inks Partnership With ChatGPT Owner OpenAI
May 17, 2024 12:16 PM EDT
Reddit (RDDT) shares soared in intraday trading Friday after the company announced a partnership with OpenAI that allows the ChatGPT owner to train its artificial intelligence (AI) models using the news aggregation social network’s content.
Reddit will give OpenAI access to its application programming interface (API), which provides access to its real-time, structured, and unique content, in exchange for certain OpenAI-powered features being offered to Reddit’s users and moderators. Reddit will also add OpenAI as an advertising partner.
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Reddit shares jumped out of the gate after listing in late March but quickly ran into selling pressure after more than doubling from their $34 initial public offering (IPO) price. From mid-April, the stock started to make a V-shaped recovery after forming a bullish engulfing pattern in the high $30s/low $40s.
Amid further upside after the OpenAI partnership, investors should keep a close eye on the stock’s record high at $74.90. A volume-backed breakout above this closely watched chart area opens the door for the shares to move into uncharted waters and test higher price levels.
Reddit shares were up more than 13% at $64 midday Friday.
-Timothy Smith
GameStop Issues New Shares, Sending Stock Tumbling
May 17, 2024 11:19 AM EDT
GameStop (GME) shares tumbled in intraday trading Friday after the gaming retailer announced plans to issue up to 45 million new shares and released initial estimates for its first-quarter financial performance below expectations.
GameStop plans to sell up to 45 million new shares of its common stock, the company said in a filing with the Securities and Exchange Commission (SEC) Friday. The new sale will bring GameStop’s total shares on the market to about 351.19 million.
GameStop said in the filing it will use the proceeds from the sale for “general corporate purposes” like investments and acquisitions. At its share price Friday morning, the stock sale could net GameStop just under $1 billion.
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GameStop also released first-quarter preliminary results Friday. The retailer guided net sales of $872 million to $892 million for the 13 weeks through May 4, below analyst projections of $1 billion, according to estimates compiled by Visible Alpha. GameStop also expects to post a larger net loss than estimates, from a range of $27 million to $37 million, mostly wider than the $30.6 million analysts predict.
As of Friday morning, shares were down 26%, now just 16% above where the stock closed last week.
-Aaron McDade
Stocks Making the Biggest Moves Friday
May 17, 2024 10:51 AM EDT
Gains:
- Reddit (RDDT): Shares of the social media company jumped 13% after it struck a deal to license its content to OpenAI as training material for artificial intelligence models.
- KE Holdings (BEKE): Shares of the Chinese real estate firm climbed 4% after China's government announced a series of measures to prop up the country’s ailing property sector, including removing the floor on mortgage rates and offering government-backed firms 300 billion yuan ($42 billion) to purchase excess inventory.
- Advanced Micro Devices (AMD): The chipmaker’s shares rose 3% after Microsoft said it planned to offer cloud customers a platform built on AMD’s artificial intelligence chips as an alternative to Nvidia’s offerings.
Losses:
- DXC Technology (DXC): Shares fell 18% after the IT services company forecasted current-quarter revenue and earnings guidance that fell well short of analysts’ estimates.
- GameStop (GME): Shares of the video game retailer tumbled 23% after it reported net sales declined more than Wall Street had forecast in the first quarter. It also announced plans to sell up to 45 million shares.
