Stock market news for May 29, 2024

The three major indexes ended Wednesday’s session down.

The Dow finished lower by just over 1%. The S&P 500 shed 0.7%, while the Nasdaq Composite slipped 0.6%.

— Alex Harring

Hopes are high on Wall Street for Insmed’s brensocatib, an experimental treatment for patients with a type of chronic inflammatory lung disease.

Analysts rate the stock a buy or outperform across the board and many have said the recently released data from a final-phase trial support the idea that the drug is not only effective for its lead indication, noncystic fibrosis bronchiectasis, but it also could be used for other conditions, including cystic fibrosis, asthma and some types of chronic obstructive pulmonary disease.

Bank of America analyst Jason Zemansky said he would “continue to put money to work” in the stock as there is not sufficient recognition of its opportunities yet.

The stock more than doubled on Tuesday on the trial results, but shares opened lower on Wednesday.

The average price target has moved up to $58.44, according to FactSet, which implies more than 21% upside ahead.

— Christina Cheddar Berk

Recent economic data releases that have eased stagflation concerns may have contributed to equity volatility sinking to near post-Covid lows, according to Barclays head of European equity strategy Emmanuel Cau.

As the market approaches a seasonally low volatility period, equity volatility is likely to remain depressed, Cau wrote in a Wednesday note.

“Importantly, should low vol levels persist, they are likely to lend further support to equities, via potential buying from systematic investors,” said Cau.

The strategist added, “With equities near highs, elevated policy uncertainty and lingering geopolitical risks, we like using extremely low cost of optionality for equity replacement (buying calls or call spreads instead of being outright long equities) or using downside hedges to protect existing longs.”

— Hakyung Kim

The U.S. economy grew unevenly over the past six weeks while consumers recoiled against higher prices, the Federal Reserve reported Wednesday.

As part of its periodic “Beige Book” economic look, the Fed noted that the economy “continued to expand” during the period, though “conditions varied” among the 12 central bank districts.

On inflation, the report said prices rose at a “modest” pace while “consumers pushed back against additional price increases, which led to smaller profit margins as input prices rose on average.” Retailers reported offering incentives to shoppers as “price growth is expected to continue at a modest pace in the near term.”

— Jeff Cox

Canaccord Genuity’s Tony Dwyer said Tuesday he is stepping down from his role as chief market strategist at the firm, where he had been since 2012.

“It is with great gratitude that I would like to announce after 14 years with the firm, I have made the decision to step away from my day-to-day role as the Chief Market Strategist at Canaccord Genuity,” Dwyer wrote Tuesday to clients. “I am looking to spend more time with my family and be much more involved in my son’s Health Care-based Software business.”

The strategist said he will remain a market strategy consultant for the firm, a role that will include making keynotes at the firm’s conferences and providing client webinars. Mike Welch will remain at the firm as a market analyst, the note read.

Dwyer, who has been in the industry for 37 years, previously worked at Collins Stewart prior to its acquisition by Canaccord Genuity. At Collins Stewart, he was senior managing director and chief equity strategist.

— Sarah Min

These are some of the companies making headlines in midday trading:

• Abercrombie & Fitch — Shares popped 22% after the apparel retailer posted fiscal first-quarter sales that grew 22% from a year earlier. Abercrombie’s profit during the period was nearly seven times compared to the year-ago period and came in ahead of Wall Street’s estimates.
• Netflix — Morgan Stanley reiterated its overweight rating on the streaming stock, leading shares 2% higher. According to the firm, Netflix can see strong double-digit revenue growth that should extend beyond the benefits it is seeing from its paid-sharing initiative.
• American Airlines — The travel stock sank 14% after a guidance cut for the second quarter. The company said it now sees unit revenues falling as much as 6% during the period compared to a year ago. Prior guidance said the decline would not be greater than 3%.

For the full list, read here.

— Pia Singh

Stocks could be in for a choppy summer even with the major benchmarks on pace to end the month on a high note, according to Wolfe Research.

“While we are not turning intermediate-term bearish, we expect trading to become much choppier over the summer into a combination of softer-than-expected economic readings, reaccelerating inflation surprises, overbought technical conditions, and extended investor sentiment,” chief investment strategist Chris Senyek wrote Wednesday.

Given this, the strategist expects the trend of large-cap tech stocks continuing to outperform will hold. This month, information technology stocks have outpaced all other S&P 500 sectors, up more than 13%. Nvidia alone has advanced more than 30% in May.

“If we’re correct and trading becomes choppier, our sense is that investors are likely to stick with what has worked so far this year,” Senyek wrote. “Said differently, our sense is that the “Mag 7,” Secular Growers, and Momentum stocks will outperform over the summer,” he added.

— Sarah Min

Shares of Marathon Oil jumped more than 8% Wednesday after the announcement that ConocoPhillips had agreed to buy the smaller energy company in an all-stock deal.

That big move for the stock is a win for a new artificial intelligence-based investment company. Marathon Oil was the top idea of iFi AI on May 20, with the computer model projecting a 19% upside for the stock over the next 30 days. The stock was little changed in the intervening period before Wednesday’s announcement.

IFi AI, which is powered by IBM’s Watsonx, does take in news for a company as well as company fundamentals and economic data. It is possible that the recent flurry of deal activity in the energy sector contributed to the program’s optimism about Marathon Oil.

The CEO of iFi AI is CNBC senior analyst and commentator Ron Insana. 

— Jesse Pound

Bank of America upgraded Dick’s Sporting Goods to buy from neutral on the back of its “blowout” quarter. It also raised its price target to $240 per share, up from $225, implying 15% upside from Tuesday’s close.

The sporting goods retailer posted an earnings and revenue beat for its fiscal first quarter, with earnings per share coming in at $3.30. Bank of America had estimated earnings per share of $2.85. Dick’s also boosted its full-year earnings per share guidance to between $13.35 and $13.75, up from its prior range of $12.85 to $13.25.

As a result, Bank of America raised its full-year earnings per share estimate to $13.75 from $13.20.

Dick’s “omni-channel execution is well ahead of peers and key brand partnerships are at all-time highs,” analyst Robert Ohmes wrote in a note Wednesday. “DKS is repositioning its retail portfolio to House of Sport stores (+75-100 by 2027) and Next Generation stores (+16 in 2024) which operate at higher sales & profitability levels vs. legacy stores.”

In addition, Dick’s is seeing momentum in its vertical apparel brands Calia, VSRT and DSG, he added.

Shares of Dick’s were up 15% during midday trading.

— Michelle Fox

More than 82% of all New York Stock Exchange issues are falling Wednesday as decliners swamp advancers 2,291 to 355, according to FactSet data. Similarly, declining volume accounts for nearly 81% of the day’s total trading while advancing volume is just 18.1%.

New NYSE 52-week lows total 78 versus just 30 new 52-week highs.

Over on the Nasdaq, more than 65% of stocks are lower Wednesday, while the declining volume of shares equals some 64% of the total against about 35% of volume advancing. New 52-week lows on Nasdaq overwhelm new highs 126 to 45.

— Scott Schnipper

A postearnings rally in Dick’s Sporting Goods shares put the retailer’s stock on track to notch its best day in about three years.

Dick’s shares jumped more than 16% in late-morning trading during Wednesday’s session. If that holds through session close, it will mark the best day since May 26, 2021, when shares surged slightly under 17%.

The jump follows a better-than-expected earnings report and hiked guidance.

Amid all the concerns about the consumer and Americans scrutinizing their spending, two retailers said they are not having to rely on heavy promotional activity to spur sales.

After reporting same-store sales that more than doubled the Street’s expectations, Dick’s Sporting Goods executives told analysts this morning that they “didn’t see an unusually promotional environment in Q1” and that “certainly, the industry overall is in a better place than it was at the end of last year.”

At the same time, Abercrombie & Fitch‘s much stronger-than-expected sales growth figures were not a result of promotions drawing in traffic. Demand has been so strong for the teen retailer’s namesake brand that executives told analysts they “were able to pull back on some promotions and then reduce that clearance selling,” which boosted profit margins in the latest quarter.

— Robert Hum

ConocoPhillips has agreed to buy Marathon Oil in an all-stock transaction worth $17 billion, bolstering the company’s shale assets as the broader oil and gas industry undergoes a major wave of consolidation.

The deal will add two billion barrels of resources to ConocoPhillips’ inventory in the U.S., extending the company’s reach across shale fields in Texas, New Mexico and North Dakota.

ConocoPhillips’ stock was down more than 3% in morning trading following the announcement as Marathon Oil shares surged more than 8%.

ConocoPhillips’ purchase of Marathon Oil follows blockbuster deals announced last fall by its two bigger rivals, Exxon Mobil and Chevron, as the industry undergoes a transformational wave of consolidation.

The Marathon Oil transaction, which is expected to close in the fourth quarter, would grow ConocoPhillips’ earnings, cash flow and shareholder returns after the deal closes in the fourth quarter, CEO Ryan Lance said. ConocoPhillips expects share buybacks worth $7 billion in the first year after the deal is completed and $20 billion in the first three years.

— Spencer Kimball

JPMorgan Chase Chair and CEO Jamie Dimon stood by comments from last week that his retirement from the storied Wall Street firm could be less than five years away.

“[T]he timetable is less than five years, and you know, that could be four, be three, be three and a half, four and a half, it could be two and a half. It’s up to the board,” Dimon said in response to questions at Bernstein’s Strategic Decisions Conference on Wednesday. “The board will decide, we’ve got some great succession. You will know them all. So you should evaluate that yourself.”

— Ritika Shah, Brian Evans

Stocks kicked off Wednesday’s session down.

The Dow slipped 0.9% shortly after 9:30 a.m. ET. The S&P 500 and Nasdaq Composite each slipped 0.7%.

— Alex Harring

It has been a good earnings season for apparel retailers. Abercrombie & Fitch is the latest example, with its outstanding report this morning — and it is a clear sign that the company’s namesake brand is back in favor.

Sales in the latest quarter topped $1 billion, soaring 22% from a year ago, far more than the 15% growth Wall Street expected. The company said it was the highest first-quarter sales it has ever reported, and it blew away the previous record from more than a decade ago.

But here is what’s even more compelling about Abercrombie’s report. While most retailers have given tepid second-quarter guidance over the past couple of weeks, Abercrombie is bucking the trend. The teen retailer is expecting sales to grow at a mid-teens rate in the current quarter, far better than the 9% growth Wall Street has forecast. All this comes before the critical back-to-school selling season in the third quarter.

Dick’s Sporting Goods popped more than 7% in premarket trading Wednesday after first-quarter earnings came in strong, with shoppers shelling out for athletic gear and shoes.

The retailer earned $3.30 per share on $3.02 billion in revenue, while analysts polled by LSEG forecast $2.95 a share and $2.94 billion in revenue. Given the strong quarter, the company raised its full-year outlook.

Shares have climbed more than 32% in 2024.

— Alex Harring, Gabrielle Fonrouge

ConocoPhillips is in talks to take over Marathon Oil in an all-stock deal that values the energy company just north of $15 billion, the Financial Times reported.

The report, which cites people briefed on the matter, said a deal appeared to be imminent late Tuesday, but added there was a chance the talks would fall apart.

Marathon Oil shares jumped 5.8% while ConocoPhillips slipped 0.7%.