Market Overview
The stock market experienced selling pressure today, following six consecutive weeks of gains for the S&P 500, which declined by 0.2%. The index had closed at a record high on Friday, along with the Dow Jones Industrial Average, which fell by 0.8%. Today's downward trend is partly attributed to normal consolidation activity.
Interest Rates Impact
Rising market rates contributed to the selling pressure. The 10-year yield increased by 11 basis points to 4.18%, while the 2-year yield rose by seven basis points to 4.02%.
Nasdaq Composite Performance
The Nasdaq Composite outperformed other major indices, rising by 0.3% compared to Friday's close. This was driven by gains in mega-cap stocks, including NVIDIA (NVDA, Financial) at $143.71 (+4.1%), Microsoft (MSFT) at $418.78 (+0.2%), and Apple (AAPL, Financial) at $236.48 (+0.6%).
Sector Performance
- 23 of the 30 Dow components fell.
- Ten of the 11 S&P 500 sectors declined.
- The information technology sector rose by 0.9%, supported by its heavily-weighted components.
- The real estate sector, sensitive to interest rates, saw the largest decline at 2.1%.
- The health care sector dropped by 1.2%, affected by a significant decrease in Cigna (CI) shares, which fell by 4.7% following reports of talks to acquire Humana (HUM), which also declined by 2.5%.
Upcoming Earnings
The negative sentiment in equities also reflects a cautious approach ahead of a busy earnings week. Notable companies on the earnings calendar include Tesla (TSLA) at $218.85 (-0.8%), Boeing (BA) at $159.82 (+3.1%), and UPS (UPS) at $131.33 (-3.4%).
Year-to-Date Index Performance
- Nasdaq Composite: +23.5% YTD
- S&P 500: +22.7% YTD
- Dow Jones Industrial Average: +13.9% YTD
- S&P Midcap 400: +13.6% YTD
- Russell 2000: +10.5% YTD
Economic Data
Today's economic data review includes September Leading Indicators, which decreased by 0.5%, compared to a consensus of -0.3%. The prior figure was revised to -0.3% from -0.2%. There is no significant U.S. economic data expected on Tuesday.
Guru Stock Picks
Eaton Vance Worldwide Health Sciences Fund has made the following transactions:
Today's News
SAP (SAP, Financial) shares jumped 4% in extended trading following the release of its third-quarter results, which surpassed analyst expectations. The German software giant reported earnings of €1.23 per share, beating the consensus of €1.21, with revenue climbing 9% year-over-year to €8.47 billion. Cloud revenue reached €4.35 billion, contributing to a cloud and software revenue total of €7.43 billion. SAP's current cloud backlog grew by 29% in constant currency to €15.4 billion, and free cash flow surged 44% to €1.25 billion. The company increased its full-year cloud and software revenue guidance midpoint by €400 million.
The News Corp's (NWS, NWSA) Wall Street Journal and New York Post have filed a lawsuit against the AI startup Perplexity AI, backed by Nvidia (NVDA, Financial), for copyright infringement. The publishers accuse Perplexity of using their content to generate search engine answers without permission, seeking up to $150,000 per infringement. This lawsuit is the latest in a series targeting AI companies for using copyrighted material in model training.
AGNC Investment (AGNC, Financial) reported lower Q3 earnings, missing analyst estimates with a Non-GAAP EPS of $0.43. Despite the earnings decline, AGNC saw an increase in its tangible net book value per share to $8.82, resulting in a 9.3% economic return on tangible common equity. The stock edged up 0.1% in after-hours trading.
Micron Technology (MU, Financial) was identified as a new short idea by Hedgeye, leading to a 2% drop in its stock. Analysts expressed concerns over Micron's growth prospects for FY 2025, citing potential oversupply issues in high bandwidth memory and DRAM capacity.
Ares Capital (ARCC, Financial) extended its winning streak to eight sessions, closing 0.37% higher as it prepares for its Q3 earnings announcement. The company reported strong Q2 results with a 10% increase in net investment income quarter-over-quarter, maintaining a quarterly dividend of $0.48 per share.
Canadian Natural Resources (CNQ, Financial) expanded its capacity on the Trans Mountain pipeline by 75% through a 20-year contract takeover from a PetroChina unit. This move aligns with the company's strategy of increasing oil production, as demonstrated by its recent $6.5 billion acquisition of assets from Chevron.
General Motors (GM, Financial) declared a quarterly dividend of $0.12 per share, maintaining its forward yield at 0.98%. The dividend is payable on December 19 to shareholders on record as of December 6.
Johnson & Johnson (JNJ, Financial) saw its stock decline by 1.38%, ending a six-day gain streak. The stock is up 4% year-to-date, with analysts maintaining a Hold rating due to potential growth in oncology and MedTech segments offsetting declines in other areas.
Medpace (MEDP, Financial) reported Q3 GAAP EPS of $3.01, beating estimates by $0.23, though its revenue of $533.3 million missed expectations. The company continues to experience business growth despite headwinds in the biotech sector.
RH (RH) received an upgrade from Wedbush to Outperform, with a price target increase to $430. The company is capitalizing on new product introductions and market trends, positioning itself as a leader in the luxury furniture sector.
GuruFocus Stock Analysis
- Apple iPhone 16 Demand Shows Signs of Recovery: J.P. Morgan by Faizan Farooque
- Perplexity AI in Talks to Raise $500 Million, Valuation to Reach $8 Billion by Faizan Farooque
- Raymond James: Lumen's AI Partnership with Meta Unlikely to Move Stock by Faizan Farooque
- BofA Remains Bullish on Amazon Despite Project Kuiper Challenges by Faizan Farooque
- Monday.com Eyes 25% to 30% Growth in Upcoming Quarters, Piper Sandler Increases Price Target by Faizan Farooque
