Traders work on the floor at the New York Stock Exchange on Sept. 19, 2024.
Brendan McDermid | Reuters
S&P 500 futures rose on Wednesday, boosted by strong results from Alphabet, as traders prepared for additional reports from major tech companies and looked ahead to a key reading on the U.S. economy’s growth.
Futures tied to the broad market index added 0.1% along with Nasdaq 100 futures. Dow Jones Industrial Average futures dipped 81 points, or 0.2%.
Alphabet kicked off a major week for megacap tech earnings. The Google parent exceeded analysts’ expectations as the company saw strong quarterly revenue growth from its cloud business. Shares surged more than 5% in extended trading.
Chipmaker AMD slid 8% in the premarket, as its fourth-quarter revenue guidance failed to impress investors.
Tech titans Meta Platforms and Microsoft are set to report on Wednesday, while Apple and Amazon are due Thursday.
On the economic front, investors are anticipating the first preliminary reading of the gross domestic product out on Wednesday. The report is expected to show that GDP grew at a 3.1% annualized pace in the third quarter, according to the Dow Jones consensus forecast. That would be just 0.1 percentage point above the previous period if accurate, and would be the 10th straight quarter of expansion. It’s also expected to show inflation moving closer to or coming out below the Federal Reserve’s 2% inflation target.
The S&P 500 and Nasdaq netted a winning session on Tuesday ahead of the Big Tech releases. The Dow, lagged, however, falling slightly.
“Growth-oriented stocks, like the NASDAQ 100, returned to leadership,” on Tuesday, Rob Haworth, senior investment strategist at U.S. Bank Asset Management, said. “We are closely monitoring tech earnings releases to ensure businesses investment in artificial intelligence and other productivity enhancing tools remains robust to support strong future earnings growth.”
Caterpillar shares fall after earnings miss
Caterpillar shares fell more than 5% in the premarket after the industrial giant reported weaker-than-expected earnings for the third quarter.
The company posted a profit of $5.17 per share, while analysts polled by LSEG had forecast earnings of $5.34 per share. Revenue also fell 4% year over year to $16.11 billion.
Construction revenue fell 9% to $6.345 billion. “The decrease was primarily due to lower sales volume of $458 million and unfavorable price realization of $147 million. The decrease in sales volume was mainly driven by lower sales of equipment,” Caterpillar said.
— Fred Imbert
Raymond James downgrades Qorvo to market perform
There’s a bad time ahead for Qorvo, according to Raymond James.
The firm downgraded shares of the semiconductor solutions provider to market perform from outperform. Analyst Srini Pajjuri accompanied the rating change by removing his target price for the stock.
Pajjuri pointed to weak forward guidance as a reason for the downgrade.
“The company’s Dec-24Q outlook fell well short of our and consensus estimates which the management attributed to 1) unfavorable mix in premium phones, which is impacting the company’s RF content and 2) mix shift away from mid-tier to entry-tier in Android, where the company has limited to no presence,” the analyst wrote.
He added that mounting China competition and price pressures may also be exacerbating Qorvo’s woes. The company plans to reduce its expenses while scaling back from the mainstream Android market.
“While we remain optimistic about QRVO’s content opportunity in premium phones longer term, we expect mix headwinds to persist for the next few quarters and do not see many immediate catalysts for the stock despite reasonable valuation,” Pajjuri said.
Shares of Qorvo have slipped nearly 11% in 2024.
QRVO YTD chart
— Lisa Kailai Han
Chipotle drops after revenue miss
Chipotle shares were down about 6% after the fast casual chain reported weaker-than-expected revenue for the third quarter and disappointing same-store sales figures.
The company’s top line came in at $2.79 billion. Analysts polled by LSEG expected revenue of $2.82 billion. Same-store sales, a key metric for restaurants, increased by 6%, while analysts polled by StreetAccount expected growth of 6.3%.
— Fred Imbert
Asia-Pacific markets mostly fall; Australia inflation hits lowest since 2021
Asia-Pacific markets mostly fell Wednesday as traders assessed consumer price data out of Australia.
Hong Kong’s Hang Seng index was down 1.65% at 20,358 as of its final hour of trading, while mainland China’s CSI 300 closed 0.90% lower at 3,889.45.
Japan’s Nikkei 225 rose 0.96% to end the day at 39,277.39. Meanwhile, the Topix advanced 0.81% to close at 2,703.72.
South Korea’s Kospi fell 0.92% to 2,593.79, while the small-cap Kosdaq dropped 0.80% to 738.19.
Australia’s headline inflation for the September quarter rose 2.8% year on year, its lowest rate since the first quarter of 2021. The S&P/ASX 200 ended the day down 0.83% at 8,180.4.
— Dylan Butts
Europe markets open lower
European stocks were lower on Wednesday as investors reacted to a slew of corporate earnings.
The pan-European Stoxx 600 traded down around 0.45% shortly after the opening bell, with most sectors in negative territory.
— Sam Meredith
Chewy shares slide after Keith Gill announces sale
Chewy shares slipped nearly 2% in extended trading on Tuesday after Keith Gill — the man known online as meme stock leader Roaring Kitty — dissolved his passive stake in the pet-focused ecommerce retailer.
Gill said in a regulatory filling that he zeroed out his position. The trader, who’s credited with helping drive 2021’s iconic short squeeze, had a 6.6% holding in the company as of a July 1 filling.
Meme stock enthusiasts have followed Gill’s moves since his return to the internet earlier this year. Before his reappearance, Gill had not been seen online for about three years.
Chewy shares have climbed about 13% in 2024, putting the stock on track for its first positive year since 2020.
— Alex Harring
Alphabet, Chipotle, Visa among stocks making biggest moves after close
Check out the companies making headlines in after-hours trading:
- Chipotle Mexican Grill — The burrito chain reported mixed quarterly results and shares dipped 3%. Chipotle reported adjusted earnings of 27 cents per share, exceeding expectations of 25 cents a share from analysts polled by LSEG. Revenue came out at $2.79 billion for the period, just shy of analysts’ forecast of $2.82 billion. The company’s same-store sales rose 6% for the quarterly period, also falling short of estimates.
- Alphabet — Shares of the Google parent added 4% after the company exceeded Wall Street’s top- and bottom-line estimates. Alphabet posted earnings of $2.12 per share on revenue of $88.27 billion, while analysts polled by LSEG expected earnings of $1.85 per share on $86.30 billion in revenue. The megacap tech titan saw its revenue grow 15% year over year, stronger than the same quarter last year, as Google Cloud revenue beat expectations.
- Visa — The global payments company beat earnings and revenue expectations for the fiscal fourth quarter, driving shares up about 1.5%. Visa posted adjusted earnings of $2.71 per share on revenue of $9.62 billion. Analysts polled by LSEG expected earnings of $2.58 per share on revenue of $9.49 billion. The company also increased its quarterly dividend by 13% to 59 cents.
For the full list, read here.
— Pia Singh