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Dow Inches Up on Intel Gains
2 minutes ago
Ahead of retail earning reports and consumer spending data, the Dow Jones Industrial Average gained 0.07%, or 26 points, in the week’s first trading session.
Intel (INTC) gained 2.3% after a Mercury Research report said the chipmaker regained 3% of its lost market share in the second quarter amid a modest recovery in the PC market.
Salesforce (CRM) shares moved higher by 1.6% and Merck & Co. (MRK) rose about 1.4%.
Shares of Apple (AAPL) climbed 0.9% after its supplier Foxconn beat analysts’ earnings estimates in the second quarter. Microsoft (MSFT) shares also gained 0.9%.
3M (MMM) shares fell 1.1% despite announcing a $1.50 dividend for the third quarter. Shares of Walgreens Boots Alliance (WBA) dropped 1%.
Goldman Sachs (GS) shares dropped 0.9% after a New York Magazine story late last week alleged CEO David Solomon’s leadership style has alienated some of the bank’s talent, leading to the exits of several key executives and raising concern among its partners.
Walmart (WMT) shares fell 0.7% ahead of its earnings report, to be released before markets open on Thursday. It’s one of several retailers that will report earnings this week, including Home Depot (HD), which dipped 0.4% ahead of its report tomorrow morning.
Cisco Systems (CSCO), which rose 0.2% today, is the only other Dow 30 component to report this week, with its results coming Wednesday after markets close.
-Terry Lane
AMC Gets Go-Ahead for APE Stock Conversion, Shares Plunge
33 minutes ago
AMC Entertainment Holdings (AMC) shares plunged after a Delaware judge reversed her earlier decision and gave approval to the theater chain’s plan to convert AMC Preferred Equity (APE) units into common shares. The decision ends a shareholder lawsuit and paves the way for the company to raise much-needed capital.
Chancery Court Judge Morgan Zurn agreed Friday in an opinion that settlement terms between the company and the plaintiffs were fair because investors would receive additional shares of common stock “to offset the dilutive effects” of the APE shares. Last month Judge Zurn said that the original plan waived too many potential claims against the company. The agreement provides for shareholders to get 1 share for every 7.5 they own.
AMC said that after the decision it will commence a 1-for-10 reverse stock split on Aug. 24. That would be the last day of trading for its APE shares, which would be converted into common stock the next day.
Shares of AMC Entertainment lost a third of their value Monday, falling to their lowest level since January 2021, just prior to the meme stock craze that sent the stock soaring. The company’s APE shares also jumped then.
-Bill McColl
Regional Banks Sink on FDIC’s Commercial Real Estate, Tougher Regulation Warnings
56 minutes ago
Regional banks were some of the S&P 500’s worst-performing stocks Monday after Federal Depositary Insurance Corporation (FDIC) chair Martin Gruenberg said he supported tighter regulations for small- and mid-sized banks.
The FDIC today also released a review of banking risks that raised concerns about small and mid-sized lenders’ exposure to potentially troubled commercial real estate (CRE) loans.
Community banks, specifically, are disproportionately exposed to CRE loans—they hold 28% of CRE loans but only 15% of total loans, according to the FDIC’s 2023 Risk Report. The FDIC also found that nearly 1 in 3 community banks held an “elevated concentration” of CRE loans—defined as 300% of capital or construction and development loans exceeding 100% of capital—the highest share in more than 12 years.
The report notes that rising delinquency rates of commercial mortgage-backed securities (CMBS) could be a harbinger of more pain to come. The problem is especially acute for office properties, the owners of which are struggling to retain tenants and attract new ones as businesses embrace hybrid work and downsize to cut costs.
Office property owners are also expected to be hit with a double whammy of higher financing costs and lower rents in the coming years, a combination that threatens some owners’ ability to refinance.
Eight of the S&P 500’s ten worst-performing stocks Monday were regional banks. Shares of KeyCorp (KEY), Fifth Third Bancorp. (FBIT), and Comerica Inc. (CMA) all fell more than 4%.
Consumers’ Expectations for Inflation Move Closer to Fed’s Target
1 hr 57 min ago
Consumers are the most optimistic about inflation that they’ve been since April 2021—which could be a good sign for the economy.
Consumers expect inflation to run at 3.5% over the next year, down 0.3 percentage points from the June 2023 reading, the New York Federal Reserve Bank’s July Survey of Consumer Expectations released Monday said. The July short-term inflation expectation reading is the lowest since April 2021, when the reading was 3.4%.
Consumer expectations for the cost of medical care, rent, and food individually fell to their lowest level since early 2021. Moreover, consumer responses showed estimates of inflation were more aligned across short-, medium- and long-term expectations.
-Mary Beth Slack
Nikola Shares Tumble After Recall of Electric Semi-Trucks
2 hr 29 min ago
Shares of Nikola Corp. (NKLA) sank more than 5% after the electric vehicle (EV) maker voluntarily recalled 209 of its Class 8 Tre semi-trucks because of potential battery fires. The company said it is also putting a hold on sales of any new battery electric vehicles (BEV) until a resolution is in place.
Nikola said that internal and third-party investigations found that a coolant leak inside a battery pack was the probable cause of a June 23 fire in a truck at the firm’s headquarters in Phoenix.
The EV maker said that a single supplier component within the battery pack was the likely source of the leak. It added that “efforts are underway to provide a field remedy in the coming weeks.” In the meantime, BEV truck owners and dealers are being advised to take steps to help the company monitor the vehicles.
Nikola shares fell to their lowest level in more than a month following the news.
-Bill McColl
YCharts.
Midday Market Movers
3 hr 13 min ago
Nvidia Corp. (NVDA): Shares of the chipmaker rose more than 5% after Morgan Stanley analysts called the stock’s recent pull-back a good buying opportunity, and reiterated their opinion that the company will be earnings expectations and raise its full-year guidance when it reports quarterly results later this month.
PayPal Holdings Inc. (PYPL): Shares of the fintech company rose more than 2% after it tapped Intuit’s Alex Chriss to replace Dan Schulman as president and CEO.
Eli Lilly & Co. (LLY): The drug maker’s stock climbed 2% after completing its acquisitions of Sigilon Therapeutics and Versanis Bio, enhancing the pharmaceutical giant’s diabetes and weight management portfolio.
Fortrea Holdings Inc. (FTRE): Shares of the clinical trial manager fell 12% after reporting second-quarter earnings were less than half the same period last year.
KeyCorp (KEY): Shares fell 4% alongside other regional banks like Trust Financial (TFC) and Fifth Third Bancorp (FITB) as investors back off after credit rating agency Moody’s downgraded 10 small lenders last week.
PayPal Taps Intuit’s Alex Chriss as New CEO
4 hr 7 min ago
Paypal Holdings Inc. (PYPL) announced today that Alex Chriss would be the company’s new CEO. The company’s shares were up more than 2% in early trading Monday.
Chriss previously served as Executive Vice President and General Manager of the Small Business and Self-Employed Group at Intuit (INTU), a division that accounts for more than half of Intuit’s revenue. Chriss was the driving force behind Intuit’s $12 billion acquisition of marketing company Mailchimp in 2021, and managed Intuit’s flagship QuickBooks business.
PayPal’s previous CEO, Dan Schulman, announced his intention to step down back in February. Schulman joined the company in 2014 following its separation from eBay (EBAY). During his tenure, revenue nearly tripled as payment volume quintupled.
-Vivian Medithi
Coinbase Officially Expands to Canada
5 hr 30 min ago
Coinbase Global (COIN) announced Monday that it had officially launched in Canada with the integration of a popular method of money transfer and the introduction of Coinbase One, a premium subscription that offers no-fee trading and higher staking rewards.
The move is the latest in Coinbase’s efforts to expand outside the U.S., where it has clashed with federal regulators. CEO Brian Armstrong in April alluded to the company possibly leaving the U.S. on account of a lack of “regulatory clarity.” The Securities and Exchange Commission (SEC) sued the cryptocurrency exchange in June, accusing it of operating an unregistered securities exchange.
In its announcement, Coinbase called Canada “the world’s third-most crypto-aware nation,” with “an enthusiastic local tech ecosystem that, combined with its strides towards a robust regulatory framework, positions it as a potential global cryptoeconomy leader.”
Coinbase shares fell 0.9% in early trading Monday, but are still up more than 120% this year.
Apple Supplier Foxconn Tops Earnings Estimates On AI Strength
5 hr 31 min ago
Apple (AAPL) supplier Foxconn (HNHPF), the world’s biggest contract electronics maker, beat estimates for second-quarter earnings as demand for artificial intelligence (AI) infrastructure soared.
The company, the full name of which is Hon Hai Precision Industry Co., posted net income of NT$33 billion ($1.03 billion), down 1% from the same quarter last year but above consensus estimates of NT$25.57 billion ($0.8 billion). Revenue totaled NT$1.3045 trillion ($40.81 billion), down 14% from the year-ago quarter.
However, the company lowered its full-year outlook, citing geopolitical tension, monetary tightening, and inflation as headwinds to growth. It now expects a slight full-year earnings decline, revised down from a flat reading.
Foxconn has invested heavily in AI, and earlier this month secured a deal to exclusively supply Apple’s AI servers from a factory in Vietnam. The company has established a wide lead in the global AI race and accounts for 40% of the global AI server market. Foxconn provides AI services for prominent tech companies such as Apple, Nvidia (NVDA), Google-parent Alphabet (GOOGL), and OpenAI, the creator of ChatGPT.
-Mack Wilowski
Tesla Shares Slip After Cutting Prices in China, Raising EV Price War Worries
6 hr 16 min ago
Tesla’s (TSLA) stock price dropped close to 3% in early trading on Monday after it slashed prices on certain models in China, raising concerns about an EV price war. American depositary receipts (ADRs) of other EV makers, including XPeng (XPEV), Nio (NIO), and Li Auto (LI), were also lower.
The EV maker reduced prices of its Model Y long-range and performance versions by 14,000 yuan ($1,900) to 299,900 yuan ($41,000) and 349,900 yuan ($48,000), respectively.
Besides the lower price tag, Tesla will also offer an 8,000 yuan ($1,100) insurance subsidy for a few models in China, the world’s largest market for new vehicles.
The price cuts come after Tesla’s Chinese sales fell 31% in July from June, its first monthly decline this year, according to data from the China Passenger Car Association.
-Fatima Attarwala
Stocks Making the Biggest Moves Premarket
7 hr 6 min ago
Gainers:
- United States Steel Corp. (X): Shares of U.S. Steel jumped 27% premarket to their highest level since March after the steelmaker declined a $7 billion takeover offer from rival Cleveland-Cliffs Inc. (CLF).
- Monday.com Ltd. (MNDY): Shares of Monday.com rose 6% Monday after the project management tech company shrunk its net loss to $12 million in the second quarter from $46 million a year ago. Revenue grew 42% year-over-year to $176 million, more than analysts expected.
Losers:
- AMC Entertainment Holdings Inc. (AMC): Shares of the movie theater chain sank 38% after a court approved its plan to convert preferred equity to common shares.
- Tesla Inc. (TSLA): The electric car maker’s stock fell 3% after it cut prices on two models in China, the world’s largest EV market. Shares of Chinese rival BYD Co. fell in Hong Kong; American depositary receipts of Nio Inc. (NIO) fell more than 3% before U.S. markets opened.
- Alibaba Group Holdings Ltd. (BABA): Shares of the Chinese e-commerce company slipped 1.5% as investors grow concerned turmoil in China’s real estate sector could spill over to the broader economy.
5 Things to Know Before Markets Open
7 hr 29 min ago
Here’s what investors need to know to start their day:
- United States Steel Corp. (X) rejected a $7.25 billion takeover bid from rival Cleveland-Cliffs Inc (CLF) that would have created one of the world’s largest steelmakers.
- Tesla (TSLA) shares fell 1.6% in pre-market trading after the electric vehicle automaker again cut prices in China.
- AMC Entertainment (AMC) shares plummeted 28% in pre-market trading after the movie theater chain won court approval for a stock conversion plan that triggered a shareholder lawsuit.
- Apple (AAPL) shares moved higher by 0.5% in pre-market trading after its supplier Foxconn beat analyst forecasts for its second-quarter earnings, crediting a growing artificial intelligence sector.
- Shares of electric-vehicle maker Nikola (NKLA) fell 14% in pre-market trading after the company said it was recalling all of the battery-powered trucks it has so far delivered after it found that a coolant leak inside its battery pack could cause a fire.
-Terry Lane
Stock Futures Slipping to Start the Week
7 hr 46 min ago
Futures contracts connected to the Dow Jones Industrial Average were up 0.06% in premarket trading but falling from earlier highs.
S&P 500 futures were effectively flat early Monday.
Nasdaq 100 futures contracts were falling an hour before markets opened.
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