Dow Jones Today: S&P 500, Nasdaq Rise as Stock Market Steadies After Sell-Off; Tesla Jumps 20% On Earnings
· InvestopediaMajor indexes were mixed in afternoon trading Thursday as the U.S. stock market looks to recover from a steep downturn yesterday, while investors digested a barrage of earnings reports from major companies.
The S&P 500 and Nasdaq Composite were up 0.2% and 0.7%, respectively, while the Dow Jones Industrial Average was off 0.3%. The Dow and S&P 500, which ended last week at record highs, have closed lower for three straight days, while the Nasdaq is coming off a 1.6% decline yesterday that snapped a five-session winning streak.
Tesla (TSLA) shares were leading S&P 500 gainers on Thursday, rising 21% after the EV maker reported better-than-expected earnings and said that plans for new, more-affordable models are "on track" for production to start next year.
Other large-cap tech stocks, which led the previous session's declines, were mixed Thursday afternoon. Alphabet (GOOGL), Meta Platforms (META) and Amazon (AMZN) were gaining ground, while Nvidia (NVDA), Microsoft (MSFT) and Apple (AAPL) inched lower.
Shares of United Parcel Service (UPS) were up nearly 5% after the package delivery giant reported better-than-expected results on the top and bottom lines.
Shares of Dow component Boeing (BA) fell 1.5% after the plane maker's machinists late Wednesday rejected a new contract offer and extended a crippling six-week strike. Fellow Dow member International Business Machines (IBM) was down 7% after reporting quarterly revenue that came in below analysts' expectations. Honeywell (HON), another Dow component, dropped 4.5% after reporting results.
Investors were also digesting several economic indicators that were released this morning. Weekly jobless claims numbers came in lower than expected, while new-home sales were higher than anticipated. Market participants are closely watching the data as they seek confirmation that the U.S. economy remains on sound footing and look for information that could inform the Federal Reserve's decisions on interest rates.
The yield on 10-year Treasurys, which is tightly correlated with expectations around interest rates, fell to 4.18% from 4.24% yesterday. The yield has been on the rise, hitting levels not seen since late July in recent days, as the market has recalibrated its expectations for how aggressive the Fed will be in easing policy in the coming months.
Gold futures were up slightly, at around $2,745 an ounce, after hitting an all-time high of just above $2,770 on Wednesday.
Tesla Jumps on Optimism About Outlook for 2025
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Tesla (TSLA) shares are roaring higher a day after the company’s third quarter results, which analysts at Wedbush called an “Aaron Judge-like performance.”
The firm noted Tesla’s prediction of 20% to 30% vehicle delivery growth next year, “compared to Street numbers in the 10%-12% heading into the print.” Wedbush maintained its Outperform rating and $300 price target, using the moment to liken Tesla to Judge—the slugger who put up mega-numbers for baseball's New York Yankees this season.
Not every analyst is buying it, though. JPMorgan called the results a return to "ebullient forecasts" from Musk, "which may or may not qualify as guidance."
The firm's own outlook is 12% growth. JPMorgan maintained its Underweight rating but upped its price target to $135 from $130.
The electric vehicle maker posted third-quarter net income of $2.17 billion or 62 cents per share, up from $1.85 billion or 53 cents per share a year ago. That result topped analysts' estimates as margins rose to 19.8% from 17.9%.
Shares of Tesla jumped 21% to around $258 as of Thursday afternoon, pushing the stock back into positive territory for 2024.
Honeywell Shares Drop as Company Lowers Outlook
2 hr 7 min ago
Honeywell International (HON) shares declined Thursday morning after the aviation and safety equipment manufacturer missed sales estimates and lowered its revenue guidance as demand for its industrial automation products slumped.
Honeywell reported third-quarter revenue rose almost 6% year-over-year to $9.73 billion, while analysts surveyed by Visible Alpha were looking for $9.89 billion. Adjusted earnings per share (EPS) of $2.58 exceeded forecasts.
Sales at its Industrial Automation segment declined 5% to $2.50 billion, which the company blamed on "volume softness in warehouse and workflow solutions and safety and sensing technologies."
CEO Vimal Kapur said that the company "executed through a challenging environment in the third quarter." Kapur added that it made significant progress this year "on the simplification and optimization of the Honeywell portfolio," which included the planned spinning off of its Advanced Materials division and the exiting of its personal protective equipment (PPE) business, as well closing on four acquisitions.
The company said that because of the closings of those purchases, along with third quarter-results and management's outlook for the rest of the year, it was lowering its 2024 sales forecast to a range of $38.6 billion to $3.88 billion from the earlier prediction $39.1 billion to $39.7 billion. It narrowed the range of adjusted EPS to $10.15 to $10.25 from $10.05 to $10.25.
Honeywell shares were down 4.5% in recent trading and were the second-biggest decliner in the Dow.
IBM Stock Sinks on Disappointing Revenue
3 hr 48 min ago
IBM (IBM) shares were down nearly 6% early Thursday and were the biggest Dow decliner after the company reported quarterly revenue that fell short of Wall Street estimates.
The company late Thursday reported third-quarter revenue of $14.97 billion, up 1% year-over-year and 2% in constant-currency terms but lower than the $15.07 billion consensus estimate of analysts polled by Visible Alpha. Infrastructure revenue fell 7% and consulting revenue remained flat.
IBM posted a net loss of $330 million, or $0.36 per share, due to a $2.7 billion pension-settlement charge. Analysts expected a profit of $1.72 billion, or $1.84 per share.
IBM Chief Executive Officer (CEO) Arvind Krishna said the group expects fourth-quarter revenue growth, in constant-currency terms, to be “consistent” with the third quarter, driven by strong software sales. Krishna said the firm's "AI book of business now stands at more than $3 billion, up more than $1 billion quarter to quarter."
Even after falling early Thursday, IBM shares are up nearly 35% this year.
UPS Shares Surge as Shipping Giant Returns to Growth
5 hr 2 min ago
United Parcel Service (UPS) shares jumped in premarket trading as the company reported third-quarter results that came in above analysts' expectations.
The shipping giant reported revenue of $22.2 billion, better than the $21.94 billion consensus estimate of analysts compiled by Visible Alpha. Net income came in at $1.54 billion, or $1.80 per share, above projections, which called for $1.36 billion and $1.59 per share.
Thursday's results mark the first time in nearly two years that UPS returned to posting year-over-year revenue and profit gains, after it and shipping rival FedEx (FDX) each reported declines following peaks in shipping demand during the pandemic.
UPS shares were up 9% at $143, trading at their highest level in three months.
-Aaron McDade
Futures Tied to Major Indexes Mixed
6 hr 17 min ago
Futures tied to the Dow Jones Industrial Average were down 0.2%.
S&P 500 futures were up 0.5%.
Nasdaq 100 futures were up 0.9%.