Tesla Stock Plummets; Stock Market Dips as Treasury Yields Reach Highest Levels of 2024

Tesla Stock Plummets; Stock Market Dips as Treasury Yields Reach Highest Levels of 2024

Equity Indexes Wrap: Energy Stocks Advance as Health Insurers, Apparel Makers, Homebuilders Sink

12 hr 1 min ago

The Dow

Dow Inc. (DOW) led the index, climbing 1.8% as investors shunned growth stocks in favor of value. 

Disney (DIS) ticks up 1.1% ahead of its annual meeting tomorrow at which shareholders will vote on a board of directors, bringing to a close a months-long proxy battle between CEO Bob Iger and activist investor Nelson Peltz.

UnitedHealth Group (UNH) slumped 6.4% after the government finalized a January proposal to raise payments to Medicare Advantage plans by 3.7% in 2025, a modest increase that analysts expect will crimp insurers’ profits. 

Honeywell (HON) slid 0.9% amid a report from Bloomberg that the industrial conglomerate was exploring a sale of its personal protective equipment unit. 

The S&P 500

Oil refiners led the index amid a surge in oil prices ahead of tomorrow’s OPEC+ meeting. Phillips 66 (PSX) and Marathon Petroleum (MPC) rose 3.8% and 3.4%, respectively, while Valero (VLO) advanced 2.7%. 

Food and grocery stocks also gained as investors sought the safety of staples. McCormick & Co. (MKC) gained 2.1%, while Kroger (KR) added 1.5% and Kellanova (K) rose 1.1%. 

Humana (HUM) led declining health insurer stocks, plummeting 13.4% following the government’s Medicare Advantage rate decision. Competitors CVS Health (CVS) and Centene (CNC) fell 7.2% and 6.8%, respectively. 

V.F. Corp (VFC) slumped 6.7% after apparel peer PVH (PVH) forecast weaker-than-expected current-quarter sales and earnings. Ralph Lauren (RL) and Tapestry (TPR) dropped 4.6% and 4.2%, respectively. 

Homebuilder D.R. Horton (DHI) slid 3.9% as Treasury yields climbed, raising concerns mortgage rates will climb and dampen home buying activity right as the housing market enters its busy spring season. Home retailers Lowe’s (LOW) and Home Depot (HD) also declined.  

SLB (SLB) slid 1% after the oilfield services provider said it would buy competitor ChampionX (CHX) for $7.8 billion. 

The Nasdaq 100

Tesla (TSLA) fell 4.9% after the electric vehicle maker reported its first year-over-year decline in deliveries in nearly 4 years last quarter. 

High-flying semiconductor stocks, boosted in the first-quarter by excitement around artificial intelligence investment, lost ground. ASML Holding (ASML) and Advanced Micro Devices (AMD) each fell 2.6%, while Nvidia (NVDA) slid 1%.

Microsoft-Backed Rubrik Files for IPO

12 hr 40 min ago

Rubrik, a cybersecurity company backed by Microsoft (MSFT), filed for an initial public offering (IPO) and is set to trade under the ticker symbol “RBRK.” The company is the latest to go public after a flurry of recent tech IPOs, including Reddit (RDDT) and Astera Labs (ALAB).

The company did not announce the number of shares that will be offered or their pricing, though Bloomberg reported Rubrik could aim to raise between $500 million to $700 million.

In its S-1 filing, the company reported a net loss for the 2024 fiscal year of $354.2 million, widening from a loss of $277.7 million in fiscal 2023. Rubrik said that the losses were a result of the company’s “invest[ments] in growing [its] business and advancing [its] solutions to capitalize on [its] market opportunity.”

Rubrik reported total revenue of $627.9 million in fiscal 2024, up from $599.8 million in 2023. The company said it has “experienced rapid growth” as businesses seek solutions “in the face of cyberattacks, malicious insiders, and operational disruptions.”

Read more about Rubrik’s IPO here.

Naomi Buchanan

Oil Prices Approach Six-Month Highs Ahead of Wednesday’s OPEC+ Meeting

13 hr 39 min ago

Global oil prices continued surging Tuesday amid a combination of supply and demand considerations that threaten to push Brent crude beyond $90 per barrel for the first time in six months.

On the eve of the latest meeting Wednesday of the Organization of Petroleum Exporting Countries and other countries, known as OPEC+, Brent for May delivery rose as high as $89.06.

Oil prices have increased about 15% so far this year, reflecting several market factors. Recently, those include continuing turmoil in the Middle East, Ukrainian drone strikes on Russian refineries, and Mexico’s decision to halt some crude exports as it prepares to open a new refinery.

Underlying those factors: OPEC+ production cuts enacted last year. Wednesday’s meeting likely won’t change those reductions after the organization last month extended them to June. Some analysts say the cuts will remain in place for the remainder of the year.

Lyle Niedens

SLB Buys ChampionX for $7.8 Billion To Expand Its Oilfield Services Offerings

14 hr 56 min ago

Shares of ChampionX (CHX) jumped Tuesday after SLB (SLB) agreed to buy the rival oilfield services provider in an all-stock transaction valued at about $7.8 billion.

SLB announced that ChampionX investors would receive 0.735 share of SLB for every share of ChampionX they owned. That works out to be $40.59 per share, a 14.7% premium over ChampionX’s closing price Monday.

It was the second major purchase by SLB in a week. Last Wednesday, it announced a $380 million deal to acquire a majority stake in Norway’s Aker Carbon Capture.

SLB noted that the ChampionX transaction is expected to close by the end of this year.

ChampionX shares were up nearly 8% at $38.19, their highest level in nearly five years, Tuesday afternoon. Shares of SLB fell 2.7% to $53.73.

Bill McColl

U.S. IPO Market Staged Long-Awaited Comeback in Q1

15 hr 30 min ago

U.S. initial public offerings are finally back after a nearly 2-year drought. 

In the first quarter of 2024, 30 IPOs raised a combined $7.8 billion, according to data from Renaissance Capital. While the number of deals was little changed from the same quarter in 2023, the funds raised tripled thanks to the comeback of large tech offerings like Reddit (RDDT) and Astera Labs (ALAB).

Half of last quarter’s IPOs raised more than $100 million, the most of any quarter since 2021, and two offerings topped $1 billion: Finnish sporting goods maker Amer Sports (AS) and Kazakh fintech Kaspi.kz (KSPI).

Renaissance sees “a clear IPO pickup through the spring and into the summer,” in part because the first quarter’s entrants have traded well since their debuts. Reddit surged nearly 50% in its first day of trading and gained 45% in its first week. The Renaissance IPO Index gained 10.1% over the quarter, just missing the S&P 500’s 10.6% return. The biggest offerings (>$100 million) averaged a 24% return over the quarter.

PVH Stock Plunges After Luxury Apparel Maker Issues Soft Outlook

16 hr 12 min ago

PVH (PVH) shares plunged after it reported tepid fourth-quarter revenue growth and issued weaker-than-expected current-quarter and full-year sales outlooks, as the luxury apparel maker cited cautious wholesale customers and challenging conditions in its European business.

For the quarter ending Feb. 2, the company behind popular brands including Calvin Klein and Tommy Hilfiger posted adjusted earnings of $3.72 per share on flat revenue of $2.49 billion. Analysts had expected earnings of $3.53 a share on sales of $2.42 billion.

The New York-based apparel maker projects current-quarter revenue to decline 11% to $1.92 billion, falling short of the $2.08 billion estimate modeled by analysts. For the full year, PVH sees sales contracting between 6% and 7% to around $8.62 billion, below the $9.15 billion Street expectation.

PVH shares tumbled more than 22% to $107.83 Tuesday morning, plunging the stock into negative territory (-12%) for the year.

Timothy Smith

What You Need To Know Ahead of Disney’s Shareholder Meeting Wednesday

17 hr 25 min ago

Disney (DIS) is set to hold its annual shareholder meeting on Wednesday, with market participants watching closely for updates on the proxy battle between the company and activist investors, as well as possible details on its parks segment and its streaming strategy.

Ahead of the shareholder meeting, analysts at Bank of America and UBS increased their price targets for the stock, citing momentum on strategic priorities for Disney and robust theme park demand.

At the meeting, shareholders will vote on board directors as the months-long proxy battle between Disney and activist investors Trian Group and Blackwells Group comes to a head.

Disney has recommended investors vote for the 12 people it nominated, including CEO Bob Iger, while Trian Group nominated Nelson Peltz and Jay Rasulo to the board, and Blackwells Group nominated three other board candidates.

During the shareholder meeting, company executives could also provide investors a closer look at Disney’s parks segment, which analysts expect to contribute to strong earnings in its second quarter.

Read more about what to expect from Wednesday’s shareholder meeting.

Naomi Buchanan

Humana Stock Slides as Medicare Advantage Rates Disappoint

18 hr 2 min ago

Humana (HUM) led declines in health care stocks Tuesday morning after the Centers for Medicare & Medicaid Services (CMS) announced that federal payments to Medicare Advantage plans will match the initial proposal outlined in January, effectively crimping health insurers’ profit margins amid rising medical costs.

The CMS said Medicare Advantage plans will receive an average payment increase of 3.7%, or over $16 billion, from 2024 to 2025—the same percentage increase proposed in January.

The payment revision, after excluding the estimated growth in patient risk scores, represents a 0.16% decline, which led health insurers to lobby for a larger increase after January’s initial proposal.

Shares of Humana, which had warned in January that higher-than-expected medical costs to cover Medicare Advantage patients would hurt its full-year profit, were hit hardest among health care stocks. Shares fell 13.3% to $304.56 Tuesday morning, putting it at levels not seen since the early days of the pandemic.

CVS Health (CVS), UnitedHealth Group (UNH), and Centene (CNC) also tumbled following the news, losing 8.6%, 6.1%, and 5%, respectively.

Timothy Smith

Tesla Tumbles on First Quarterly Delivery Decline Since 2020

18 hr 53 min ago

Shares of Tesla (TSLA) tumbled in premarket trading on Tuesday after the electric vehicle maker’s first-quarter delivery numbers fell far short of analyst estimates. 

Tesla delivered 386,810 cars in the first three months of the year, a 9% decrease from the year-ago quarter and its first year-over-year decline since the second quarter of 2020. The company produced 433,371, a more modest 2% slowdown from the same quarter in 2023.

According to FactSet data, analysts were on average expecting deliveries of 457,000 vehicles.

Shares were down 6.6% at $163.75 shortly before markets opened on Wednesday, bringing their year-to-date decline to 34%.

Stocks Making the Biggest Moves Premarket

19 hr 12 min ago

Gains:

  • ChampionX Corp. (CHX): Shares jumped nearly 10% after SLB (SLB), formerly Schlumberger, offered to buy the specialty chemicals company for about $8 billion in an all-stock transaction. 
  • Estée Lauder Co. (EL): Shares of the cosmetics giant rose about 2% after Citi upgraded the stock to “buy,” citing a likely improvement in the Asian market. 
  • BP Plc (BP): Shares of the oil company rose more than 1%, following oil prices higher amid reports OPEC+ was unlikely to change its production plans at its next meeting on Wednesday. 

Losses:

  • PVH Corp. (PVH): Shares of the apparel company tumbled 22% after reporting disappointing fourth-quarter revenue growth and issuing weaker-than-expected current-quarter guidance amid headwinds in Europe.
  • Humana Inc. (HUM): Shares of the health insurer dropped more than 9% after the government stuck with an earlier proposal to raise payments to Medicare Advantage plans by an average of 3.7% next year, disappointing investors concerned about rising health care costs. Peers CVS Health (CVS) and UnitedHealth Group (UNH) also fell premarket. 
  • Trump Media & Technology Group (DJT): Shares of former President Donald Trump’s social media company fell 2%, continuing to slide after yesterday reporting a $58 million net loss in 2023. 

Stock Futures Slip As Treasury Yields Climb to 2024 Highs

19 hr 50 min ago

Futures contracts connected to the Dow Jones Industrial Average were down 0.6% in premarket trading on Tuesday.

S&P 500 futures fell 0.4%.

Nasdaq 100 futures also traded 0.5% lower about an hour before markets opened.

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