Today's trade saw above-average volume due to the quarterly expiration of stock options, index options, single stock futures, and index futures. The Dow Jones Industrial Average reached a fresh all-time high, closing 0.1% above yesterday's close. However, the S&P 500 fell by 0.2% and the Nasdaq Composite dropped by 0.4%. The Russell 2000 lagged behind, declining by 1.1%.
The downside bias stemmed from consolidation activity after a solid run for stocks. Despite today's performance, the Russell 2000 logged a 2.1% gain this week, and the S&P 500 climbed 1.4% since last Friday.
Weakness in the chipmaker space contributed to the market's performance, with the PHLX Semiconductor Index (SOX) declining by 1.3%. Intel (INTC 21.84, +0.70, +3.3%) was a standout, surging in afternoon trade following news that Qualcomm (QCOM 168.92, -5.00, -2.9%) is interested in a takeover deal.
Losses in semiconductor names, as well as in Microsoft (MSFT 435.27, -3.42, -0.8%) and Apple (AAPL 228.20, -0.67, -0.3%), affected the S&P 500 information technology sector, which fell by 0.5%. None of the sectors moved more than 0.7% in either direction except utilities, which rose by 2.7%.
The utilities sector benefitted from a significant move in Constellation Energy (CEG 254.98, +46.48, +22.3%), which announced a 20-year power purchase agreement with Microsoft that includes the restart of Three Mile Island Unit 1.
NIKE (NKE 86.52, +5.54, +6.8%) also made headlines by announcing that Elliott Hill will become President and CEO, effective October 14, 2024.
There was no notable US economic data released today.
Looking ahead to next week, the September Consumer Confidence Index will be released on Tuesday, the August New Home Sales report on Wednesday, the weekly jobless claims report on Thursday, and the August Personal Income and Spending report on Friday.
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Today's News
Intel (INTC, Financial) saw a 4% rise in its stock price following reports that Qualcomm (QCOM, Financial) has made a takeover approach. Qualcomm, on the other hand, experienced a 3.7% decline. The potential deal is still uncertain and would likely face scrutiny from antitrust regulators. To facilitate the acquisition, Qualcomm may consider selling parts of Intel to other buyers. Intel's market cap stands at $90 billion, while Qualcomm is valued at $194 billion.
Viking Therapeutics (VKTX, Financial), Structure Therapeutics (GPCR), and Terns Pharmaceuticals (TERN) saw their stock prices increase after disappointing results from Novo Nordisk's (NVO) weight loss drug. Viking, with its oral dual GLP-1/GIP agonist VK2735 in phase 2, rose 2%. Structure, which has the APJR agonist ANPA-0073 in phase 1, went up by ~5%. Terns, with TERN-601, an oral GLP-1R agonist in phase 1, increased by 1%. Conversely, Corbus Pharmaceuticals (CRBP) plummeted 60% due to its similar drug's poor performance.
Zoom Video Communications (ZM, Financial) is reducing the amount of stock-based compensation for its employees, as announced by CEO Eric Yuan. The company aims to cut down on high dilution levels caused by excessive equity grants. Zoom plans to phase out its annual performance equity plan over the next two fiscal years, starting in February. In return, some employees might receive higher cash bonuses. Zoom's stock gained 0.9% on Friday, closing at $67.53.
Johnson & Johnson's (JNJ, Financial) subsidiary, Red River Talc, filed for a voluntary prepackaged Chapter 11 bankruptcy to resolve claims related to its talc-based products. The settlement offer is ~$8 billion, to be paid over 25 years. This filing has the support of 83% of current claimants, surpassing the 75% threshold required by the U.S. Bankruptcy Code. This is J&J's third bankruptcy attempt, with the prior two being blocked.
CrowdStrike (CRWD, Financial) shares surged more than 6% following positive feedback from its cybersecurity event, Fal.Con. Analysts are optimistic about the company's long-term growth prospects, citing its continued innovation and strong customer retention rate of 98%. Baird analyst Shrenik Kothari has an Outperform rating and a $315 price target on CrowdStrike. The stock has gained more than 10% over the past month and nearly 37% since early August.
Goldman Sachs (GS) promoted Josh Schiffrin to chief strategy officer and head of financial risk for global banking and markets. Schiffrin, who joined Goldman in 2001, will now oversee the financial risk team, the FICC desk, and the prime risk strats team. He will also manage the strategy, investments, and partnerships team. Schiffrin was named managing director in 2009 and became a partner in 2012.
Constellation Energy (CEG) surged to an all-time high, up 18.2%, after announcing plans to restart its Three Mile Island nuclear plant in Pennsylvania. The company will invest ~$1.6 billion to revive the plant, which is expected to be operational by 2028. This move aims to support Microsoft's growing AI plans. The plant's license renewal would extend operations to at least 2054. Uranium producers like Cameco (CCJ) and Energy Fuels (UUUU) also saw gains following the announcement.
AvalonBay Communities (AVB) declared a quarterly dividend of $1.70 per share, maintaining its previous rate. The forward yield is 2.96%, with the dividend payable on October 15. Shareholders of record by September 30 will receive the dividend. AvalonBay's stock remains a subject of interest, with analysts debating its valuation and growth prospects.
FedEx (FDX) shares continue to decline after disappointing fiscal Q1 results and downbeat guidance. The company cited soft demand for premium delivery services and a challenging macro environment. CEO Raj Subramaniam highlighted the weak current environment, despite a recent 50-basis point interest rate cut by the Federal Reserve. Analysts expect ongoing secular headwinds to impact the company.
B. Riley (RILY) rose 7% after reports surfaced that it is in talks to sell its wealth management business to Stifel Financial (SF). Stifel approached B. Riley about the purchase, although a deal is not guaranteed. Another buyer could potentially come forward with an offer. B. Riley recently entered talks to sell a majority stake in the Great American Group.
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