Market Overview
The stock market continued its upward trajectory, with major indices hitting new all-time highs. The S&P 500 increased by 0.3%, the Nasdaq Composite by 0.2%, and the Dow Jones Industrial Average by 0.7%. The Russell 2000 saw a notable gain of 1.1%, outperforming other major indices.
Individual Stock Performance
Despite the overall market gains, Apple (AAPL, Financial) experienced a significant drop of 4.1%, closing at $171.29. This decline came after the Department of Justice filed an antitrust lawsuit against the company. Apple has announced plans to defend itself vigorously. Similarly, Accenture (ACN, Financial) faced a sharp decline of 9.3%, closing at $345.03, due to earnings-related concerns. These drops limited the S&P 500 information technology sector's gain to a modest 0.1%.
Sector Highlights
- Semiconductor Sector: The semiconductor space saw strength, particularly from Micron (MU, Financial) and Broadcom (AVGO, Financial), which climbed 14.1% and 5.6%, respectively. This was supported by pleasing earnings and guidance from Micron, along with an upgrade for Broadcom. The PHLX Semiconductor Index (SOX) rose by 2.3%.
- Market Breadth: Market breadth was positive, with advancers leading decliners by a 2-to-1 margin at the NYSE and a 3-to-2 margin at the Nasdaq. Nine out of eleven S&P 500 sectors ended with gains, with the industrial and financial sectors leading the way.
IPO Buzz and Economic Data
Reddit's IPO generated significant interest, opening at $47 and closing at $50.44, a 48.4% increase from its IPO price of $34. In economic news, the labor market remains strong, with weekly initial claims at 210K, and the Q4 current account balance was reported at -$194.8 billion. Additionally, the February existing home sales data suggested resilience in the housing market despite higher mortgage rates.
Global Markets and Commodities
Overseas markets showed positive movement, with notable gains in Europe and Asia. Commodity prices varied, with crude oil experiencing a slight decrease, while gold saw a significant increase.
Guru Stock Picks
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Today's News
Reddit (RDDT, Financial) made a stunning entrance into the public markets, with shares jumping 48% on their debut day. The social media platform's IPO was the largest for a social media company since 2019, closing at $50.44, significantly above its IPO price of $34. This marks a valuation of $6.4B for Reddit, after raising $748M by selling 22M shares. The offering was reportedly oversubscribed by more than five times, emphasizing the strong demand for Reddit shares. Additionally, Reddit recently announced a content licensing deal with Google (GOOG, Financial) (GOOGL, Financial), valued at around $60M annually, although this has raised regulatory concerns.
Nike (NKE, Financial) reported its Q3 earnings, outperforming expectations with a Non-GAAP EPS of $0.98, beating estimates by $0.23, and revenue of $12.43B, a slight increase year over year, surpassing forecasts by $130M. The company highlighted a 3% increase in wholesale revenues and a notable improvement in gross margin to 44.8%. Despite a slight decrease in digital sales and a 13% reduction in inventories, Nike's financial health remains robust, with cash and short-term investments totaling $10.6B.
FedEx (FDX, Financial) also exceeded earnings expectations for Q3, with a Non-GAAP EPS of $3.86, surpassing estimates by $0.38. However, its $21.7B revenue represented a 2.3% decline year over year, missing targets by $380M. FedEx announced operating income growth of 19% from the previous year and unveiled plans for an additional $500M share repurchase in the fourth quarter, alongside a new $5B share repurchase program. The company has narrowed its full-year earnings outlook and anticipates a low-single-digit percentage decline in revenue for 2024.
Warner Bros. Discovery (WBD, Financial) is expanding its Max streaming service to Europe, aligning with the Paris Olympics and the release of a new season of the HBO original "House of the Dragon." The service will launch in the Nordic countries, Iberia, and Central and Eastern Europe, marking a significant step in WBD's international expansion strategy.
Lululemon Athletica (LULU, Financial) experienced a drop in after-hours trading following its guidance for the current quarter, which fell short of analyst expectations. Despite a 12% increase in comparable sales and a 16% rise in total revenue, driven by strong performance in international markets, the company's outlook disappointed investors.
United Airlines (UAL, Financial) introduced a MileagePlus miles pooling feature, allowing up to five members to share and redeem miles collectively. This innovative approach aims to enhance customer loyalty and flexibility in using rewards.
Rush Street Interactive (RSI, Financial) saw its shares climb following reports that the company is exploring a potential sale, with DraftKings (DKNG, Financial) among the potential buyers. This move highlights the competitive dynamics and consolidation trends within the online betting and gaming industry.
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