Nasdaq, S&P 500 Advance as Dow Slips; Bitcoin Soars Above $57K

Equity Indexes Wrap: Cruise Stocks Soar on Norwegian Earnings; Hess, Chevron Slump With Deal in Jeopardy

3 hr 39 min ago

The Dow

Apple (AAPL) rose 0.8% amid reports it would call off its decade-long effort to develop an electric vehicle. 

Chevron (CVX) lost 1.4% after warning a dispute with ExxonMobil (XOM) and China’s CNOOC over the rights to a massive oilfield off the coast of Guyana could jeopardize its acquisition of Hess. 

Microsoft (MSFT) finished flat as European antitrust regulators said they would look into the tech giant’s investment in AI startup Mistral.

The S&P 500

Norwegian Cruise Line Holdings (NCLH) rose 19.9% after it topped estimates with its fourth-quarter earnings and forecast a strong 2024. Peers Carnival Corp. (CCL) and Royal Caribbean (RCL) rose 7.7% and 3%, respectively. 

Autozone (AZO) climbed 6.6% after its quarterly earnings and revenue came in ahead of Wall Street’s estimates. 

Lowe’s (LOW) added 1.9% after beating estimates with its fourth-quarter earnings.

Shares of medical goods distributor Henry Schein (HSIC) dropped 3.4% after it forecast lower-than-expected full-year earnings as the company deals with the fallout of an October cyberattack.

Hess Corp. (HES) fell 3.1% amid concerns about its acquisition by Chevron. 

J.M. Smuckers (SJM) shares fell 2% despite reporting sales volumes increased in the fourth quarter. 

The Nasdaq 100

Constellation Energy Corp. (CEG) jumped 16.9% after it swung to a $1.1 billion profit in 2023 from a $160 million loss the year prior. 

Cybersecurity stocks gained ground, led by Palo Alto Networks (PANW), up 4%, and Fortinet (FTNT), up 2.3%. 

Warner Bros. Discovery (WBD) rose 1.8% amid reports it had called off merger talks with competitor Paramount Global. 

Workday (WDAY) shares fell 4% after it beat fourth-quarter earnings expectations, but left its full-year guidance unchanged. 

Chevron Says Its $53B Purchase of Hess Could Be Jeopardized by Oil Field Agreement

4 hr 14 min ago

Chevron (CVX) shares fell about 2% in intraday trading Tuesday after the energy giant warned its planned $53 billion purchase of Hess (HES) could be jeopardized by a challenge from ExxonMobil (XOM) and China National Offshore Oil Corporation (CNOOC).

The dispute centers on a joint operating agreement (JOA) signed more than a decade ago relating to the Stabroek Block offshore oil field in Guyana. Hess entered the deal in 2014 when it bought the stake owned by Shell (SHEL), giving it 30% of the ExxonMobil-run consortium. A stipulation in the JOA allowed existing partners, such as ExxonMobil and CNOOC, to participate in any changes in ownership.

Chevron said in a regulatory filing Tuesday that it is in discussions with the two firms regarding their right of first refusal in the JOA. It said that if the talks don’t result in an acceptable resolution and, if pursued, arbitration, “then there would be a failure of a closing condition under the Merger Agreement, in which case the merger would not close.”

Chevron announced it was buying Hess in October, and getting access to the Guyana site was a key factor in the sale.

–Bill McColl

Apple Stock Pops on Report It Will End Self-Driving, Electric Car Project

4 hr 38 min ago

Apple (AAPL) shares popped Tuesday afternoon following reports the company had called off Project Titan, its effort to develop an electric vehicle. 

Employees were informed of the decision by executives on Tuesday and were told many of them would be transferred to work on the company’s artificial intelligence initiatives, according to Bloomberg. 

Apple had reportedly been working on the car, which it hoped would be fully autonomous, since 2014. 

Shares, trading down 0.6% at $180 shortly before the Bloomberg report, jumped on the news. With an hour left in the session, Apple shares were up 0.9% at $182.72.

Lowe’s 4Q Earnings Beat Expectations But 2024 Outlook Remains Bleak

4 hr 58 min ago

Lowe’s Companies Inc. (LOW) reported fourth-quarter earnings that beat expectations Tuesday but issued weaker-than-expected full-year 2024 guidance as consumers pull back on home improvement spending.

The retailer posted diluted earnings per share (EPS) of $1.77 for the recent quarter, up from $1.58 in the fourth quarter of 2022. Quarterly revenue of $18.6 billion was down from $22.4 billion a year prior but a tick above market expectations.

However, Lowe’s full-year 2024 guidance showed a tough path ahead, with earnings forecast to be in a range of $12 to $12.30 a share, lower than expectations. Management expects comparable sales to be 2% to 3% lower than the previous year, also below analysts’ consensus view.

Lowe’s shares, which rose as much as 3.3% Tuesday morning, flagged throughout the day and traded up about 1.1% with a little over an hour left in the session.

–Kevin George

Macy’s Plans 150 Store Closures in New Strategy, as Chain Faces Proxy Fight

5 hr 53 min ago

Macy’s (M) shares rose nearly 5% in intraday trading Tuesday after it announced 150 store closures in yet another turnaround plan, as the U.S. department store chain tries to shore up its finances and keep an activist investor at bay.

While it is closing Macy’s stores, the company is also prioritizing its luxury offerings. It plans to add 15 Bloomingdale’s locations and 30 Bluemercury stores, with other locations at the beauty chain set to be remodeled.

The new plan comes a week Arkhouse Management launched a proxy fight for Macy’s, nominating nine members to the board after the department store company rejected a $5.8 billion buyout offer by the investor and partner Brigade Capital Management.

Along with the new strategy, Macy’s reported adjusted fourth-quarter profit of $2.45 per share, with sales falling 1.7% to $8.12 billion. Both exceeded estimates.

Macy’s shares were trading up nearly 5% at about 12:30 p.m. ET, and are up 35% in the last three months.

–Bill McColl

Cava Stock Surges as Fast-Casual Chain Swings to Annual Profit

7 hr 1 min ago

Shares of fast-casual chain Cava Group (CAVA) surged Tuesday after the company reported better-than-expected fourth-quarter earnings on increased foot traffic and higher prices. 

Cava reported a fourth-quarter net income of $2 million, swinging to a profit from a $18.8 million loss in the prior-year quarter. For the full year, Cava reported a $13.3 million profit after recording a $59 million loss in 2022. Same-restaurant sales, an important metric that controls for the opening of new restaurants, increased 11.4% in the fourth quarter, with the growth coming from both increased traffic and higher menu prices.

The company forecast same-restaurant sales to grow between 3% and 5% in 2024, a deceleration from 2023’s rate of 17.9%. It also anticipates restaurant-level profit margins to contract to a range of between 22.7% and 23.3% this year from 24.8% in 2023. 

Shares surged more than 12% to $56.70 on Tuesday, putting them up 29% from their June IPO price. 

Unity Software Stock Drops After Games Company Issues Soft Guidance

7 hr 38 min ago

Unity Software (U) issued current-quarter guidance well below Wall Street’s estimates as the game development company undergoes a portfolio and cost structure reset, sending its shares tumbling 8% in intraday trading on Tuesday.

The company said it expects to generate revenue in the March quarter between $415 million and $420 million, with the high end of that range falling considerably short of the $534 million analysts had forecast.

Unity’s bottom-line current-quarter guidance of $45 million to $50 million also came in significantly below expectations, which Wall Street had pegged at $113 million.

Apart from several minor breaches, Unity’s share price has oscillated within a multi-year trading range stretching back to mid-2022. Over that period, the 50-day moving average has crossed the 200-day moving average multiple times, confirming the stock’s lack of direction.

If an earnings-driven sell-off accelerates, monitor if buyers can defend the range’s lower trendline, which sits just below $25. A volume-backed breakdown could mark the start of another leg lower, while a reversal from this closely watched chart level could see range-bound conditions continue.

–Timothy Smith

Cruise Stocks Rally on Norwegian Earnings

8 hr 45 min ago

Cruise stocks rallied in early trading Tuesday after a strong earnings report and forecast from Norwegian Cruise Line Holdings (NCLH). 

Norwegian reported a full-year net income of $166 million, or 39 cents per share, its first annual profit since 2019. Revenue totaled $8.5 billion, a 76% increase from 2022 and 32% higher than in 2019.

Norwegian also said it’s expecting another strong year ahead, with 2024 bookings and prices at all-time highs. The company forecast a full-year net income of $635 million, or $1.23 per share, a year-over-year increase of 76%. 

Norwegian shares jumped 14% Tuesday morning, putting the stock on track to have its best day in more than a year. With Tuesday’s gains, the stock has risen about 10% in the past year. 

Cruise operators were hit hard by the COVID-19 pandemic and resulting shutdowns. The businesses hemorrhaged money for years as restrictions kept cruise ships docked for a time and then dramatically limited occupancy once operations resumed.

Of the three major providers, only Royal Caribbean’s stock has recovered from its COVID-19 losses. Carnival and Norwegian stocks are both about 50% off their prices at the beginning of March 2020.

Norwegian’s stock has trailed its larger competitors Royal Caribbean (RCL) and Carnival Corp. (CCL) over the last year. Royal Caribbean stock rose more than 3% Tuesday after Norwegian’s earnings, bringing its 12-month return to more than 70%. Carnival shares climbed 6% Tuesday and have risen 45% in the past year. 

Zoom Video Stock Soars as Company Issues Upbeat Earnings Guidance

9 hr 51 min ago

Zoom Video (ZM) shares rose more than 5% Tuesday morning after the company topped analysts’ quarterly estimates and issued better-than-expected current-quarter and full-year earnings guidance amid growing demand for its expanding AI-enhanced product range.

The company, which rose to prominence during the pandemic for its video conferencing software, disclosed fiscal fourth-quarter adjusted earnings of $1.22 per share on revenue of $1.15 billion. Wall Street had expected earnings of $1.15 a share on sales of $1.13 billion.

Looking ahead to the current quarter, the San Jose, California-based company projects adjusted earnings per share to range between $1.18 and $1.20, with the lower end of that forecast comfortably topping analysts’ expectations of $1.13 a share.

Zoom shares have oscillated roughly within a 14-point trading range over the past 10 months, helping to establish clear support and resistance levels on the chart. More recently, the price has bounced from the pattern’s lower trendline on increased volume leading into the company’s earnings release. Amid further upside, monitor the range’s top trendline around $74.50 as a potential area of resistance.

–Timothy Smith

Stocks Making the Biggest Moves Premarket

10 hr 53 min ago

Gains:

• Norwegian Cruise Line Holdings Ltd. (NCLH): Shares of the cruise operator gained 9% after it surprised analysts by forecasting a profit in the current quarter amid strong demand.
• Zoom Video Communications Inc. (ZM): Shares of the video conferencing software company jumped more than 8% after it beat analyst estimates with its fourth-quarter earnings and current-quarter guidance. 
• Coinbase Global Inc. (COIN): Shares of the cryptocurrency exchange climbed more than 6% as the price of Bitcoin soared above $57,000, its highest price in more than 2 years. 

Losses:

• Unity Software Inc. (U): Shares of the game development software maker plummeted more than 13% after it offered weaker-than-expected current-quarter guidance.
• Hess Corp. (HES): Shares slipped 3% after Chevron (CVX) said in a regulatory filing that a dispute with Exxon Mobil (XOM) and Chinese oil giant CNOOC over rights to develop a high-profile oil field in Guyana could derail its planned $53 billion acquisition of the oil producer. 
• Lowe’s Companies Inc. (LOW): Shares of the home goods retailer slipped 1% after it warned sales would decline in 2024 amid continued softness in DIY spending. 

Stock Futures Up But Headed Lower Premarket

11 hr 23 min ago

Futures contracts connected to the Dow Jones Industrial Average were effectively flat about an hour before markets opened after giving up earlier gains.

S&P 500 futures were up 0.1%.

Nasdaq 100 futures gained 0.2%.