Stocks Finish Lower on Mixed Economic News and Tech Stock Weakness

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The S&P 500 Index Wednesday closed down -0.38%, the Dow Jones Industrials Index closed down -0.31%, and the Nasdaq 100 Index closed down -0.85%.

Stocks on Wednesday settled moderately lower, with the Dow Jones Industrials falling back from a new all-time high. Some negative corporate news on Wednesday weighed on the broader market. Dell Technologies closed down more than -12% after reporting weaker-than-expected Q3 total net revenue. Also, HP Inc. closed down more than -11% after forecasting Q1 adjusted EPS below consensus. In addition, Symbotic plunged more than -38 % after saying it could not file its annual Form 10-K for the fiscal year ended September 28, 2024, on time because it needs to assess the financial impacts of an error related to system revenue recognition. Finally, the weakness in chip stocks weighed on technology stocks and the overall market.

However, stocks found some support on mixed US economic news that knocked T-note yields lower, as the 10-year T-note yield fell to a 3-1/2 week low. Oct capital goods orders nondefense ex-aircraft and parts, a proxy for capital spending, unexpectedly fell, and Q3 GDP personal consumption was revised lower. Weekly jobless claims news was mixed as initial unemployment claims unexpectedly fell to a 7-month low, but continuing claims unexpectedly rose to a 3-year high.

US MBA mortgage applications rose +6.3% in the week ended November 22, with the purchase mortgage sub-index up +12.4% and the refinancing sub-index down -2.6%. The average 30-year fixed rate mortgage fell -4 bp to 6.86% from 6.90% in the prior week.

US Q3 GDP was unrevised at 2.8% (q/q annualized), right on expectations, although Q3 personal consumption was revised downward by -0.2 to 3.5% from 3.7%.

US Oct capital goods orders nondefense ex-aircraft and parts, a proxy for capital spending, unexpectedly fell -0.2% m/m, weaker than expectations of a +0.1% m/m increase.

US weekly initial unemployment claims unexpectedly fell -2,000 to a 7-month low of 213,000, showing a stronger labor market than expectations of 215,000. However, weekly continuing claims unexpectedly rose +9,000 to a 3-year high of 1.907 million, showing a weaker labor market than expectations of a decline to 1.892 million.

The US Nov MNI Chicago PMI unexpectedly fell -1.4 to 40.2, weaker than expectations of an increase to 45.0 and the steepest pace of contraction in 6 months.

US Oct personal spending rose +0.4% m/m, right on expectations. Oct personal income rose +0.6% m/m, stronger than expectations of +0.3% m/m.

The US Oct core PCE price index, the Fed's preferred inflation gauge, rose +0.3% m/m and +2.8% y/y, right on expectations.

US Oct pending home sales unexpectedly rose +2.0% m/m, stronger than expectations of a -2.0% m/m decline.

The markets are discounting the chances at 67% for a -25 bp rate cut at the December 17-18 FOMC meeting.

Overseas stock markets Wednesday settled mixed. The Euro Stoxx 50 closed down -0.61%. China's Shanghai Composite Index recovered from a 5-week low and closed up by +1.53%. Japan's Nikkei Stock 225 closed down -0.80%.

Interest Rates

December 10-year T-notes (ZNZ24) Wednesday closed up +13 ticks. The 10-year T-note yield fell -5.0 bp to 4.246%. Dec T-notes Wednesday rallied to a 3-1/2 week high, and the 10-year T-note yield fell to a 3-1/2 week low of 4.225%. T-notes rose Wednesday on carryover support from strength in European government bonds. Also, a downward revision to the US Q3 core PCE price index supported T-notes. In addition, a decline in inflation expectations was bullish for T-notes after the 10-year breakeven inflation rate dropped to a 6-week low Wednesday at 2.266%. Finally, strong demand for the Treasury’s $44 billion auction of 7-year T-notes lifted T-note prices as the auction had a bid-to-cover ratio of 2.71, well above the 10-auction average of 2.58.

European government bond yields Wednesday moved lower. The 10-year German bund yield fell to a 1-3/4 month low of 2.135% and finished down -2.7 bp to 2.160%. The 10-year UK gilt yield fell to a 4-week low of 4.287% and finished down -5.8 bp to 4.295%.

The German Dec GfK consumer confidence index fell -4.9 to a 7-month low of -23.3, weaker than expectations of -18.8.

ECB Executive Board member Schnabel said the ECB needs to be wary of cutting interest rates too far as borrowing costs are already near the neutral threshold, and going lower could backfire.

Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its December 12 policy meeting and at 16% for a -50 bp rate cut at the same meeting.

US Stock Movers

Dell Technologies closed down more than -12% to lead losers in the S&P 500 after reporting Q3 total net revenue of $24.37 billion, weaker than the consensus of $24.59 billion.

HP Inc is down more than -13% after forecasting Q1 adjusted EPS of 70 cents-76 cents, below the consensus of 86 cents.

Autodesk closed down more than -8% to lead losers in the Nasdaq 100 after reporting Q3 adjusted operating margin of 36.0%, below the consensus of 36.1%.

Workday closed down more than -5% after cutting its 2025 subscription revenue estimate to $7.70 billion from a previous estimate of $7.70 billion-$7.73 billion, weaker than the consensus of $7.72 billion.

Chip stocks retreated Wednesday to weigh on the overall market. Micron Technology , Broadcom , and Marvell Technology closed down more than -3%. Also, GlobalFoundries , ARM Holdings , and Intel closed down more than -2%. In addition, Nvidia , Lam Research , Advanced Micro Devices , Applied Materials , and Texas Instruments closed down more than -1%.

Symbotic closed down more than -38% after saying it is unable to file its annual Form 10-K for the fiscal year ended September 28, 2024, on time because it needs to assess the financial impacts of an error related to system revenue recognition.

Guess? closed down more than -5% after reporting Q3 net revenue of $738.5 million, weaker than the consensus of $749.5 million, and cutting its 2024 revenue estimate in dollars to +7.1% to +8.1% from a previous estimate of +9.5% to +11%.

Crowdstrike Holdings closed down more than -5% after forecasting Q4 adjusted EPS of 84 cents-86 cents, weaker than the consensus of 87 cents.

Ulta Beauty closed up more than +4% after D.A. Davidson said competitive pressures on the company are “showing some signs of alleviation.”

VeriSign closed up more than +3% after the Internet Corporation for Assigned Names and Numbers (ICANN) renewed the .com registry agreement to the company with no changes to the provision governing the price that VeriSign charges for domain names.

Urban Outfitters closed up more than +17% after reporting Q3 net sales of $1.36 billion, above the consensus of $1.33 billion.

Embecta closed up more than +9% after BTIG LLC upgraded the stock to buy from neutral with a price target of $26.

Ambarella closed up more than +5% after reporting Q3 adjusted EPS of 11 cents, well above the consensus of 4 cents.

Foot Locker closed up +3% after Williams Trading upgraded the stock to hold from sell, citing its improved product lineup.

Paramount Global closed up +0.84% after CFRA upgraded the stock to buy from hold with a price target of $13.

Earnings Reports (11/29/2024)

Cleanspark Inc (CLSK), iLearningEngines Holdings Inc (AILE), Ingles Markets Inc (IMKTA), Nordic American Tankers Ltd (NAT), Patterson Cos Inc (PDCO), Renovaro Inc (RENB), Zuora Inc (ZUO).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.

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Dow, S&P 500 Retreat From Record High Closings

MT Newswires

US benchmark equity indexes fell Wednesday, with the Dow Jones Industrial Average and the S&P 500 retreating from the previous session's record highs as markets assessed the latest economic data.

The Nasdaq Composite dropped 0.6% to 19,060.5, while the S&P 500 lost 0.4% to 5,998.7. The Dow decreased 0.3% to 44,722.1. Technology saw the steepest decline among sectors, while real estate led the gainers.

Markets will be closed Thursday for the Thanksgiving holiday.

In economic news, US consumer spending growth slowed as expected in October, while the Federal Reserve's preferred inflation metric accelerated at the annual level, government data showed.

"Today's report underscores the ongoing resilience of US consumers with a large income gain and solid consumer spending in October," TD Economics said in a report. "On the flip side, inflation has also remained firm, chipping away at the real gains."

The odds that the Federal Open Market Committee will lower its benchmark lending rate by 25 basis points next month jumped to 67% Wednesday from 59% Tuesday, according to the CME FedWatch tool. The probability of rates remaining unchanged fell to 33% from 41%.

The US economic growth rate in Q3 held steady with an initial forecast at 2.8%, while consumer spending saw a surprise downward revision, according to a second estimate by the Bureau of Economic Analysis.

Pending home sales in the US unexpectedly rose on a sequential basis in October amid gains across all regions of the country, the National Association of Realtors said.

"Home-buying momentum is building after nearly two years of suppressed home sales," NAR Chief Economist Lawrence Yun said.

US durable goods orders rose less than projected in October even as transportation equipment rebounded, government data showed.

The US 10-year yield fell 5.4 basis points to 4.25% Wednesday, while the two-year rate dropped 3.1 basis points to 4.22%.

In company news, Dell Technologies shares plunged 12%, the steepest decline on the S&P 500. Late Tuesday, the computer manufacturer reported weaker-than-expected revenue for its fiscal Q3 amid a drop in its client solutions division and offered a conservative guidance that Morgan Stanley said spooked the market.

Autodesk was the worst Nasdaq performer and among the worst on the S&P 500 Wednesday, down 8.6%. The company logged better-than-projected fiscal Q3 results and appointed Janesh Moorjani as chief financial officer late Tuesday.

Walt Disney has agreed to pay $43.3 million to settle a lawsuit alleging that its female workers in California were paid $150 million less than their male counterparts over an eight-year period, Reuters reported Tuesday, citing a statement by the plaintiffs' lawyers. The media and entertainment giant's shares rose 1.9% Wednesday, the top gainer on the Dow.

West Texas Intermediate crude oil was little changed at $68.75 a barrel. Commercial crude stockpiles in the US fell more than projected last week, government data showed.

Gold rose 0.6% to $2,636.90 per troy ounce, while silver dropped 0.9% to $30.14 per ounce.

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Urban Outfitters Stock Surged Wednesday: What Happened?

Benzinga

Urban Outfitters

+18.31%

Urban Outfitters, Inc. shares traded higher on Wednesday following the release of the company’s third-quarter earnings report, which exceeded expectations. Here’s what you need to know.

What To Know: Urban Outfitters reported third-quarter earnings per share of $1.10, beating estimates of 89 cents. Revenue came in at $1.36 billion, up 6.3% year-over-year and ahead of the consensus estimate of $1.32 billion.

The company posted net income of $102.9 million for the quarter, compared to $83 million a year ago. Retail net sales rose 3.2%, with comparable retail sales up 1.5%. Anthropologie and Free People brands reported comparable sales growth of 5.8% and 5.3%, respectively, while Urban Outfitters brand sales fell 8.9%.

See More: These Analysts Increase Their Forecasts On Urban Outfitters After Q3 Results

Nuuly, the company's subscription rental service, grew sales by 48.4%, supported by a 51% increase in active subscribers. Wholesale revenue increased 17.4%, driven by a 20.3% rise in Free People wholesale sales, partially offset by declining Urban Outfitters wholesale revenue.

Gross profit for the quarter rose 9.4% to $497.3 million, with a 105-basis-point improvement in gross margin due to higher merchandise markups and fewer markdowns at Urban Outfitters. Operating expenses increased 6.7%, reflecting higher marketing and store payroll costs.

“These results were driven by outperformance across all three business segments – Retail, Subscription and Wholesale. Additionally, we’re optimistic about the outlook for Holiday demand and believe total comparable sales could be similar to our third quarter results,” said Richard Hayne, CEO of Urban Outfitters.

The company ended the quarter with $182.5 million in cash, $340.4 million in marketable securities and a 10% inventory increase, largely due to early holiday merchandise shipments and higher sales expectations.

Following the print, several analysts raised price targets, which appears to have helped push shares higher on Wednesday.

Citigroup analyst Paul Lejuez upgraded Urban Outfitters from Neutral to Buy and raised the price target from $42 to $59.
Telsey Advisory Group analyst Dana Telsey maintained a Market Perform and raised the price target from $44 to $46.
BofA Securities analyst Lorraine Hutchinson maintained a Buy and raised the price target from $46 to $53.
Barclays analyst Adrienne Yih maintained an Overweight and raised the price target from $43 to $51.
Wells Fargo analyst Ike Boruchow maintained an Equal-Weight and raised the price target from $40 to $48.

URBN Price Action: Urban Outfitters shares closed Wednesday up 18.3% at $47.49, according to Benzinga Pro.

Read Next:

Boeing Faces Heat From ‘Frustrated’ Emirates Over $52 Billion Aircraft Delays

Image Via Shutterstock.

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2025 Stock Playbook: Tap Into AI's $1 Trillion Potential, US Growth Opportunities

Benzinga

Wall Street eyes 2025 with confidence as JPMorgan declares the U.S. will remain the global growth leader.

While Europe wrestles with structural woes, the emerging markets face headwinds from high interest rates and a strong dollar. Meanwhile, the U.S. is powering ahead, fueled by an AI-driven spending spree and robust capital market activity.

AI Spending: A $1 Trillion Juggernaut

Artificial intelligence is sparking a capital expenditure boom that dwarfs anything seen in decades. The Magnificent 7 — Amazon.com Inc , Microsoft Corp , Meta Platforms Inc , NVIDIA Corp , Alphabet Inc , Tesla Inc and Apple Inc — plan to invest over $500 billion into capex and R&D next year, roughly 25% of their combined sales.

JPMorgan estimates the broader AI ecosystem could surpass $1 trillion in spending by the end of the year. This includes costs for infrastructure, engineering talent and data center upkeep.

While this AI frenzy promises to drive earnings growth, JPMorgan analysts warn of potential pitfalls. Capital misallocation and lofty growth expectations could draw investor skepticism by late 2025.

Still, the long-term AI opportunity is undeniable, and JPMorgan sees key players poised to capitalize.

A Broad Earnings Recovery

JPMorgan projects a bounce-back year for earnings growth in 2025. S&P 500 companies are projected to achieve an 11.4% earnings increase with all 11 sectors turning positive after 2024’s uneven performance.

Meanwhile, small-cap Russell 2000 firms should see rebounding with double-digit earnings growth after enduring two years of declines.

Even the Magnificent 7 are expected to sustain a 15% growth rate.

JPMorgan analysts note a surprising upside could emerge if borrowing costs or the U.S. dollar ease. This should boost S&P 500 earnings by 1% for every 2% drop in the dollar.

Stock Picks: Who's In JPMorgan's Cart?

Here are a few of the top picks per theme, from JPMorgan’s 2025 outlook, which the firm has an Overweight (OW) rating on:

AI Winners: Amazon, Microsoft, Nvidia, Alphabet, Meta, Qualcomm Inc , Salesforce Inc .
Deregulation Darlings: Apple, ExxonMobil Corp , Baker Hughes Co , Bank of America Corp .
America First Beneficiaries: Boeing Co , Lockheed Martin Corp , General Motors Co , Ford Motor Co , Caterpillar Inc , and more.

With an AI boom, a broad earnings recovery, and pro-American policies potentially reshaping the landscape, JPMorgan's 2025 vision sets a bold tone for the year ahead.

Read Next:

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Photo: Sutthiphong Chandaeng via Shutterstock

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Should You Buy Autodesk Stock After Earnings?

Zacks

Autodesk

-8.59%

The last week or so I’ve seen a ton of earnings reports that hit the mark, yet somehow still disappoint investors. This happens a lot more often than most investors would believe. You get a beat and raise quarter along with a 10% dump, or worse. What gives?

I like to use a line an old pit trader told me, Danny Riley aka D Boy. He says that sometimes the guys with the better seats make their moves ahead of you. Meaning, big, institutional money has an agenda you don’t realize, and they are moving on that agenda.

The latest short-term victim of this is Autodesk (ADSK) after the bell Tuesday. The company reported EPS of $2.17 on revenues of $1.57 billion. It also raised guidance for the FY and next quarter. When a stock’s ran up from under $200 to $317 in four months, the expectations can really swell. In this case, it just feels like the bar was set way too high for the guide Wall Street, or the guys with the better seats, wanted to see.

Moving Averages: Bartosiak starts by examining the stock's moving averages, such as the 50-day and 200-day moving averages. He points out the significance of crossovers and divergences between these averages, which can indicate potential trend changes.

Support and Resistance Levels: Bartosiak identifies key support and resistance levels on the chart. These levels act as barriers that the stock price must breach or hold above, providing traders with critical decision points.

Chart Patterns: He discusses chart patterns like head and shoulders, cup and handle, or flags, and their relevance in predicting future price movements. These patterns can offer valuable insights into potential bullish or bearish trends.

Volume Analysis: He emphasizes the importance of volume analysis in confirming price trends. An increase in trading volume during a breakout or breakdown can validate the significance of a price move.

Dave Bartosiak's technical analysis approach adds depth to our understanding Autodesk’s stock chart. By paying attention to moving averages, support and resistance levels, chart patterns, technical indicators, and volume, he equips investors with a comprehensive toolkit for making well-informed decisions in the stock market. Remember, while technical analysis is a valuable tool, it's important to consider other factors like fundamental analysis and market sentiment before making investment choices.

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