Market Performance
The Dow Jones Industrial Average rose by 0.2%, and the S&P 500 increased by 0.3%, both extending into record territory. The Nasdaq Composite also settled 0.1% higher. However, the Russell 2000 underperformed, dropping 0.3% after recently outperforming its peers.
Market Breadth
Market breadth was mixed throughout the session, indicating a lack of conviction from either buyers or sellers after the recent big run. Advancers led decliners by a 3-to-2 margin at the NYSE, while decliners led advancers by a 4-to-3 margin at the Nasdaq.
Market Sentiment
Market participants remain optimistic about a soft landing scenario for the economy, but there's a growing sense that stocks are due for some consolidation.
Sector Performance
- Many semiconductor stocks settled higher, leading the PHLX Semiconductor Index (SOX) to close 0.5% above Friday's settlement. TSMC (TSM 174.76, +0.68, +0.4%) was notable after a Wall Street Journal report mentioned that TSMC and Samsung are considering new chip-making facilities in the United Arab Emirates.
- Boeing (BA 156.30, +3.01, +2.0%) turned sharply higher after confirming a substantial increase in the machinist contract offer to end the strike. This price action helped boost the S&P 500 industrial sector (+0.7%).
Other Outperforming Sectors
- Energy: +1.3%
- Consumer Discretionary: +1.3%
- Real Estate: +1.1%
- Utilities: +1.0%
Bond Market
The 10-year yield settled one basis point higher at 3.74%, and the 2-year yield also settled one basis point higher at 3.58%.
Guru Stock Picks
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Today's News
Morgan Stanley analysts identified quality stocks with positive EPS revisions and an overweight rating, predicting strong near-term performance. Analyst Michael J. Wilson emphasized that labor data will significantly influence equities through year-end. A drop in the unemployment rate could counter seasonal earnings weakness and election volatility, while a rise above 4.3% unemployment with weak payrolls could trigger risk-off price action. Notable stocks include Schlumberger Ltd (SLB) and Baker Hughes Co.
Novo Nordisk (NVO, Financial) CEO Lars Fruergaard Jørgensen is set to testify before a Senate Committee regarding the high prices of diabetes and weight loss drugs Ozempic and Wegovy. The hearing, chaired by Sen. Bernie Sanders, could be contentious, especially after Sanders suggested that Ozempic could be sold for $100 per month while still being profitable.
GameStop Corp. (GME, Financial) announced the completion of its at-the-market equity offering program, raising approximately $400 million. The company plans to use the proceeds for general corporate purposes, including potential acquisitions and investments. GameStop ended Q2 with $4.2 billion in cash and $12.4 million in long-term debt. The stock saw a 1.92% rise in regular trading and an additional 2.42% post-market.
Constellation Energy (CEG, Financial), Vistra (VST), and Public Service Enterprise Group (PEG) extended gains following Constellation's deal to supply power to Microsoft from a reopened Three Mile Island nuclear site. Constellation saw a 23% surge on Friday, its largest-ever percentage increase, continuing to rise on Monday.
Snowflake (SNOW, Financial) shares fell nearly 3% in extended trading after announcing a $2 billion convertible note offering. The company plans to use proceeds for repurchasing up to $575 million of common stock and general corporate purposes. Despite a 2.7% gain on Monday, Snowflake shares have lost 40% year-to-date.
California Attorney General Rob Bonta announced a lawsuit against Exxon Mobil (XOM, Financial) for misleading consumers about the recyclability of plastic products. The state concluded a two-year investigation, alleging that Exxon has falsely promoted that all plastic is recyclable, while 92% of plastic waste processed through its advanced recycling technology does not become recycled plastic.
Boeing (BA, Financial) shares rose 2.7% after the company improved its contract offer for 33,000 striking machinists. The new offer includes a 30% pay hike over four years and a doubled ratification bonus of $6,000. Boeing has faced significant cash flow constraints, leading to hiring freezes and furloughs.
Shopify (SHOP, Financial) extended its gains for the seventh straight session, closing 1.77% higher at $80.11. The stock has risen 10.02% over the last six sessions, buoyed by the Federal Reserve's 50 basis points rate cut. Shopify has delivered a 2,600% return since its 2015 IPO, with revenues growing at 49% annually.
Former President Donald J. Trump suggested a temporary cap on credit card interest rates at about 10% during a campaign speech. The current average credit card APR is 20.78%, and retail credit card APR is 30.45%. Consumers' credit card debt reached a record $1.14 trillion in Q2 2024.
UCB (OTCPK:UCBJY) received FDA approval for its drug Bimzelx for treating active psoriatic arthritis, ankylosing spondylitis, and non-radiographic axial spondyloarthritis. The drug will enter a crowded field, competing with medications from Johnson & Johnson (JNJ), AbbVie (ABBV), Amgen (AMGN, Financial), and others.
Regeneron Pharmaceuticals (REGN, Financial) dropped 4.5% after a judge denied its motion for a preliminary injunction to block Amgen's (AMGN, Financial) biosimilar version of Eylea. Regeneron plans to appeal the decision, while Amgen has not commented.
Tesla (TSLA, Financial) was among the biggest gainers in the S&P 500, with analysts optimistic about its Q3 deliveries report. Recent data shows strength in China offsetting weakness in Europe. Goldman Sachs, Wolfe Research, and Barclays issued forecasts around the consensus estimate of 461,000 deliveries.
Most of the Magnificent Seven stocks underperformed in Q3 but are now bouncing back. Meta Platforms (META), Apple (AAPL, Financial), Tesla (TSLA, Financial), Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL), and Nvidia (NVDA) have all shown recent gains, with Tesla up 9.02% over the last five days.
GuruFocus Stock Analysis
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