Markets News, May 29, 2024: Dow Sheds 400 Points as Treasury Yields Rise; Marathon Oil Gains

Markets News, May 29, 2024: Dow Sheds 400 Points as Treasury Yields Rise; Marathon Oil Gains

Stock Indexes Wrap: Stocks Decline in Broad Sell-0ff

12 hr 57 min ago

The Dow

Salesforce (CRM) rose 0.7% ahead of its earnings report after the bell. 

UnitedHealth (UNH) led the Dow lower, falling 3.8% after CEO Andrew Witty said at a conference he expected some “disturbance” in the company’s Medicaid profitability models from the resumption of eligibility reviews following the lifting of the Covid-19 emergency declaration. 

The S&P 500

Marathon Oil (MRO) jumped 8.4% after ConocoPhillips announced it would acquire the oil producer in an all-stock deal valued at more than $22 billion. ConocoPhillips (COP) slid 3.1%. 

Nvidia (NVDA) edged up 0.8%, recovering from early losses to close at another record high. 

American Airlines (AAL) tumbled 13.5% after unexpectedly cutting its current-quarter outlook.

Two of Wall Street’s favorite AI stocks, Super Micro Computer (SMCI) and Advanced Micro Devices (AMD), fell 4% and 3.8%, respectively.

Healthcare plan provider Centene (CNC) followed UnitedHealth lower, falling 3.1%. UnitedHealth’s insurance industry peers Elevance Health (ELV) and Humana (HUM) shed 2.6% and 1.1%, respectively. 

The Nasdaq 100

Consumer brands and retailers may have gotten a boost from a string of better-than-expected earnings reports from the likes of Abercrombie & Fitch (ANF), Dick’s Sporting Goods (DKS), and Chewy (CHWY). Lululemon (LULU) and Ross Stores (ROST) each rose 1.1%, while Dollar Tree (DLTR) advanced 0.7%. 

Marvell Technology (MRVL) slid 3.3% ahead of its quarterly earnings report before markets open tomorrow. 

Most other semiconductor stocks were lower, with ASML (ASML) losing 3.4% and Qualcomm (QCOM) off 2.3%.

Abercrombie & Fitch Stock Hits Record on Booming Sales and Higher Guidance

13 hr 30 min ago

Abercrombie & Fitch (ANF) shares soared to an all-time high Wednesday as the clothing retailer’s first-quarter results easily exceeded estimates and it raised its outlook as sales rose for all regions and brands.

The company reported quarterly net income of $113.9 million—nearly seven times greater than a year ago—with earnings per share (EPS) of $2.14, up from $0.32 in 2023. Revenue jumped 22% year-over-year to $1.02 billion, a first-quarter record. Profit and revenue topped forecasts.

Sales of its Abercrombie brand climbed 31% to $571.5 million, and Hollister brand sales rose 12% to $449.2 million. They were up 23% to $820.1 million in the Americas; 19% to $164.8 million in Europe, the Middle East, and Africa; and 10% to $35.8 million in the Asia-Pacific region. 

Abercrombie now expects full-year sales to rise about 10% from $4.3 billion in fiscal 2023, up from its previous outlook of a 4% to 6% gain. It sees operating margin of approximately 14% compared with the earlier prediction of about 12%. 

Shares of Abercrombie & Fitch were up more than 23% shortly before markets closed on Wednesday. They have more than doubled this year and risen sixfold in the past 12 months.

Bill McColl

Dick’s Sporting Goods Stock Soars as Shoppers Increase, Spend More

14 hr 34 min ago

Shares of Dick’s Sporting Goods (DKS) surged Wednesday after the sports and recreation equipment retailer posted better-than-anticipated results and boosted its guidance as its stores saw an increase in shoppers who spent more.

The company reported first-quarter earnings per share (EPS) of $3.30, with net sales up 6% year-over-year to $3.02 billion. Both exceeded estimates.

Comparable store sales jumped 5.3%, up from 3.6% a year ago. Dick’s said that was driven by growth in transactions and average ticket. Earnings before taxes (EBT) margin came in at 11.3%.

The company now sees 2024 EPS in a range of $13.35 to $13.75, up from the previous outlook of $12.85 to $13.25. It predicts a comparable store sales gain of 2.0% to 3.0%, compared with the earlier view of a 1.0% to 2.0% rise.

Dick’s Sporting Goods shares were up 16% at $226.29 Wednesday after hitting an all-time high of $229.56 earlier in the session. They have gained more than 50% in 2024.

Bill McColl

Marathon Oil Stock Jumps on $22.5B Acquisition by ConocoPhillips

15 hr 42 min ago

Marathon Oil (MRO) stock jumped Wednesday after ConocoPhillips (COP) announced that it would acquire its fellow Houston-based energy firm in an all-stock deal valued at $22.5 billion, inclusive of $5.4 billion of net debt.

Marathon shareholders will receive 0.255 shares of ConocoPhillips stock for each share of Marathon they own, a premium of nearly 15% to Marathon’s Tuesday closing price of $26.45.

ConocoPhillips said the acquisition will be “immediately accretive” to its earnings and cash flow, and expects to generate “at least $500 million of run rate cost and capital savings within the first full year following the closing of the transaction,” which it believes will occur in the fourth quarter of 2024.

Marathon shares were up 7.8% Wednesday afternoon, and have gained 18% so far this year.

Aaron McDade

American Airlines Stock Drops After Company Lowers Outlook, Key Executive Departs

16 hr 36 min ago

American Airlines (AAL) shares plummeted Wednesday after the full-service carrier slashed its current-quarter outlook and announced the sudden departure of its chief commercial officer, Vasu Raja.

American, the world’s largest airline by fleet size, said it now sees second-quarter unit revenue declining between 5% and 6%, down from its earlier forecast of a 1% to 3% contraction. The airline also trimmed its bottom-line guidance for the period, saying it expects adjusted earnings to range between $1 and $1.15 per share, below its prior projection of $1.15 to $1.45 per share.

The airline’s soft guidance for the current quarter, which includes the busy summer season, comes as travel demand over the period is expected to reach record levels.

In a separate statement late Tuesday, American said Chief Commercial Officer Vasu Raja, who had assumed the role a little over two years ago, will be stepping down next month and temporarily replaced by Vice Chair and Chief Strategy Officer Stephen Johnson.

American Airlines shares were down more than 14% early Wednesday afternoon, bringing their year-to-date decline to about 16%.

Timothy Smith

Chewy Stock Soars on Earnings Beat as Auto Delivery Sales Jump

17 hr 16 min ago

Chewy (CHWY) shares skyrocketed Wednesday after the e-commerce pet food and supplies retailer reported results that topped forecasts and announced a new stock buyback plan as its automatic delivery sales jumped.

Chewy posted first-quarter revenue of $2.88 billion, rising 3.1% from a year ago and beating analysts’ estimates compiled by Visible Alpha. Net income of $66.9 million nearly tripled from $22.86 million in the year-ago period, far exceeding expectations, while Chewy said its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) tripled year-over-year to a record $162.9 million. Diluted earnings per share came in at 15 cents, up 10 cents from a year ago.

The company’s active customers declined 2.1% to 20 million, but net sales per active customer jumped 9.6% to $562. In addition, Chewy’s autoship customer sales increased 6.4% to $2.23 billion, and made up 77.6% of total sales, compared to 75.2% a year earlier. 

Chewy also said its board approved an up to $500 million share repurchase program with no expiration date. 

Shares of Chewy were up 29% Wednesday morning, gaining around 8% so far in 2024.

Bill McColl

Stocks Making the Biggest Moves in Early Trading

18 hr 30 min ago

Gains:

  • Marathon Oil (MRO): Shares surged after ConocoPhillips (COP) said it has agreed to acquire its fellow Houston-based energy firm in a $22.5 billion all-stock deal.
  • Dick’s Sporting Goods (DKS): Shares jumped the sports-wear firm posted better-than-anticipated results and boosted its guidance as its stores saw an increase in shoppers who spent more.
  • Robinhood (HOOD): Shares rose after the online discount brokerage firm unveiled a $1 billion stock buyback program, signaling its coming of age as a mature financial services provider.
  • Abercrombie & Fitch Co. (ANF): Shares of the retailer surged after the company’s first-quarter earnings beat forecasts.

Losses:

  • American Airlines (AAL): Shares slumped after the airline lowered its second-quarter guidance and said a key executive was departing. 
  • Cava Group (CAVA): Shares fell as lower same-store sales at the restaurant chain offset higher-than-forecast earnings and a swing into profitability.

US Stock Futures Decline

20 hr 18 min ago

Dow futures were down 0.6% in premarket trading Wednesday.

S&P futures were down 0.6%.

Nasdaq futures were down 0.6%.

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