Market Overview
The stock market maintained stability at the index level. The S&P 500 slightly declined by 0.1%, recovering from its opening low and settling near its intraday high. The Nasdaq Composite gained 0.2%, while the Dow Jones Industrial Average remained largely unchanged. Mega caps played a crucial role in supporting index performance, with Microsoft (MSFT, Financial) rising 2.1% to $427.51 and Meta Platforms (META, Financial) increasing 1.2% to $582.01.
Market Breadth and Sector Performance
Despite some gains, many stocks continued to decline as part of a consolidation trend. Decliners outpaced advancers by a 3-to-2 margin on the NYSE and by a 4-to-3 margin on the Nasdaq. The equal-weighted S&P 500 fell 0.5%, with six sectors declining. The industrial sector was the worst performer, dropping 1.2%, while the consumer staples sector recorded the largest gain, up 0.9%.
Interest Rates
Rising market rates added to the downside pressure on equities. The 10-year yield increased by two basis points to 4.20%, which is 13 basis points higher than Friday's close. The 2-year yield moved up by one basis point today and nine basis points this week, settling at 4.04%.
Earnings Highlights
Recent earnings announcements received mostly negative reactions despite some positive results from blue-chip companies. Notable declines were seen in Dow components Verizon (VZ), down 5.0% to $41.50, and 3M (MMM), down 2.3% to $131.73. GE Aerospace (GE) and Lockheed Martin (LMT) also saw significant drops, falling 9.1% to $176.66 and 6.1% to $576.98, respectively. Conversely, General Motors (GM, Financial) rose sharply by 9.8% to $53.73, following better-than-expected earnings and guidance.
Year-to-Date Performance
- Nasdaq Composite: +23.7% YTD
- S&P 500: +22.7% YTD
- Dow Jones Industrial Average: +13.9% YTD
- S&P Midcap 400: +12.9% YTD
- Russell 2000: +10.1% YTD
Economic Data and Global Markets
No significant U.S. economic data was released today. Upcoming data on Wednesday includes:
- 7:00 a.m. ET: Weekly MBA Mortgage Applications Index
- 10:00 a.m. ET: September Existing Home Sales
- 10:30 a.m. ET: EIA Crude Oil Inventories
- 2:00 p.m. ET: October Beige Book
Overseas markets showed mixed results:
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Today's News
Texas Instruments (TXN, Financial) shares saw a 1% increase in after-hours trading despite issuing a fourth-quarter guidance that fell short of expectations. The company's revenue for the quarter ending September 30 decreased by 8.4% year-over-year to $4.15 billion, with analog revenue falling 4% and embedded processing revenue dropping 27%. Despite the decline, cash flow from operations was robust at $6.2 billion over the past 12 months. Other analog chipmakers, including Analog Devices (ADI, Financial) and NXP Semiconductors (NXPI, Financial), also experienced modest gains in late trading.
General Motors (GM, Financial) reported a strong third quarter, surpassing expectations and driving shares to their highest level since early 2022. The company saw significant growth in its electric vehicle market share, which rose to nearly 10%, up from 7.1% in the previous quarter. This performance was attributed to effective inventory management and a strategic focus on high-demand vehicles, marking a positive turnaround for the automaker.
BlackRock (BLK, Financial) expanded its exchange-traded fund offerings with the introduction of two new actively managed funds focusing on technology growth and artificial intelligence. This move underscores BlackRock's belief in the transformative potential of AI, which it sees as a profound long-term opportunity. Among the top holdings in these funds are Nvidia (NVDA), Meta Platforms (META, Financial), and Microsoft (MSFT, Financial).
Enphase Energy (ENPH, Financial) reported a third-quarter non-GAAP EPS of $0.65, missing expectations by $0.13. The company's revenue for the quarter was $380.87 million, a 30.9% year-over-year decline, also falling short of forecasts. Enphase provided a conservative revenue outlook for the fourth quarter, anticipating a range between $360 million and $400 million, below the consensus estimate of $435.21 million.
Seagate Technology (STX, Financial) announced a first-quarter non-GAAP EPS of $1.58, exceeding expectations by $0.12, with revenue reaching $2.17 billion, a significant 49.7% year-over-year increase. Despite these positive results, shares dipped by 2.57% as the company provided a cautious revenue outlook for the second quarter.
Verizon (VZ) announced plans to increase its capital expenditures for 2025, projecting a range between $17.5 billion and $18.5 billion, surpassing market expectations. The announcement did not significantly impact telecom equipment stocks, as investors weighed the potential benefits against the company's strategic priorities and shareholder returns.
Starbucks (SBUX, Financial) shares fell sharply in postmarket trading after the company reported a 7% decline in global comparable store sales for the fourth quarter. The company's consolidated net revenue also fell by 3% to $9.1 billion, missing the consensus estimate. The decline was attributed to reduced sales in North America and a significant drop in China, despite efforts to boost customer engagement through promotions.
Spotify (SPOT, Financial) is reportedly testing an ad exchange in collaboration with The Trade Desk (TTD) to enhance its automated ad offerings. This initiative, called Spotify Ad Exchange (SAX), aims to connect Trade Desk's advertising clients with Spotify's video ad inventory, with plans to expand to audio ads. This move positions Spotify to compete more effectively against larger platforms like Meta and Google for ad revenue.
GuruFocus Stock Analysis
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