S&P 500, Dow Close at Record Highs as Bank Earnings, Inflation Data Give Stocks a Boost

Biggest S&P 500 Movers on Friday

3 hr 48 min ago

Advancers

• Fastenal (FAST), a producer of nuts, bolts, screws, and other industrial supplies, topped analysts’ estimates with its sales and profit results for the third quarter. Solid demand for the company’s safety products helped drive the strong results, even as Hurricane Helene caused a disruption to sales. Fastenal shares ended 9.8% higher on Friday.
• Shares of industrial maintenance, repair, and operation supplier W.W. Grainger (GWW) popped 5.8% to reach an all-time high. In its most recent earnings report, released in August, Grainger reported year-over-year sales growth, boosted by strength in its High-Touch Solutions and Endless Assortment segments.
• Bank earnings season kicked off on Friday as two of the country’s largest financial institutions released quarterly results, with more companies set to follow suit next week. Wells Fargo (WFC) shares jumped 5.6% after the bank reported better-than-expected revenue and net income for the third quarter.
• JPMorgan Chase (JPM), the world’s largest bank by market capitalization, also beat top- and bottom-line forecasts while reporting year-over-year gains in net interest income (NII), and its shares added 4.4%. Shares of Bank of America (BAC), which is set to release results on Tuesday, were up 5.0%.

Decliners

• A.O. Smith (AOS) shares dropped 6.3% after the water heater and boiler manufacturer reported lackluster preliminary results for the third quarter, predicting sales and earnings per share (EPS) to come in below consensus estimates. The company also reduced its full-year profit guidance, citing weak demand for residential and commercial water heaters in North America as well as a cautious outlook for Chinese markets during the second half of the year.
• Shares of Align Technology (ALGN), maker of orthodontics products, fell 3.3% after Stifel cut its price target on the stock. Analysts also lowered their full-year revenue and earnings estimates, indicating that they do not expect Align to reach an inflection point in the near term.

–Michael Bromberg

How Rising Treasury Yields Could Affect Stocks

4 hr 48 min ago

The yield on 10-year Treasurys crossed 4.1% for the first time since July this week, extending an ascent that has paradoxically coincided with the beginning of a rate-cutting cycle.

The yield on the 10-year Treasury has risen by about half a percentage point since dipping below 3.6% on Sept. 17, the day before the Federal Reserve lowered its benchmark federal funds rate from its highest level in more than 20 years.

Stock investors are often unnerved by rising yields for a few reasons. First, they draw money away from the stock market and lower stock valuations by increasing the yield on lower-risk fixed-income securities. Second, they discourage consumer and business borrowing, weighing on economic growth and corporate profits in the process. 

Yet rising Treasury yields haven’t stood in the way of stocks in recent weeks. The S&P 500 on Friday closed at its 45th record high of the year as the 10-year yield was at a two-month high. Major stock indexes have posted gains in five consecutive weeks.

Stocks have been supported lately by growing conviction on Wall Street that the U.S. economy’s strength can support corporate profits. Earnings have mostly held up through years of elevated interest rates, and the Fed’s easing cycle—whether aggressive or more measured—should mostly be a tailwind for business and stocks.

Read the full story here.

–Colin Laidley

Columbus Day Schedule for Markets

5 hr 46 min ago

Considering the New York Stock Exchange (NYSE) and Nasdaq largely follow the calendar of federal holidays for closures, it may come as a surprise that both will be open and operating normally on Columbus Day on Monday.

The two remaining holidays on the exchanges’ respective calendars for 2024 are Thanksgiving and Christmas, with additional shortened hours on the day after Thanksgiving and on Christmas Eve.

However, federal operations such as the Federal Reserve and post offices will be closed on Monday, as will commercial banks that follow the federal holiday schedule. Bond markets will also be closed

–Aaron McDade

Why Uber Hit All-Time High After Robotaxi Rollout

6 hr 48 min ago

Shares of Uber Technologies (UBER) jumped to a record high on Friday after Tesla’s (TSLA) much-anticipated robotaxi launch event failed to live up to ridesharing investors’ fears.

Tesla on Thursday evening unveiled its CyberCab, an autonomous car designed for ridesharing, and a 20-seater “RoboVan.” CEO Elon Musk said the CyberCab would cost less than $30,000, and described a vision of individuals operating fleets of CyberCabs as an alternative to driving one car through either Uber or Lyft.

Analysts were disappointed by the event, noting it was lighter on details than many Uber and Lyft investors had feared. Jefferies analysts in a note to clients called the CyberCab “toothless,” and said the event was a “best-case outcome for Uber.” 

Tesla, the analysts wrote, didn’t “provide verifiable evidence of progress” on autonomous vehicles (AV), and that Uber was “uniquely positioned to support sustainable growth for AV developers.” Jefferies has a “buy” rating on Uber stock.

Bank of America analysts noted that some risks remain, including the potential for RoboVans and CyberCabs to cost significantly less to operate than a conventional rideshare. However, Tesla gave “no specific business model” for a rideshare app that would compete with Uber or Lyft. They maintained their “buy” rating on Uber.

Uber stock was up 11% Friday afternoon, leading S&P 500 gainers. Shares of competitor Lyft (LYFT) jumped 9%.

–Bill McColl

Tesla Price Levels to Watch as Stock Sinks After Robotaxi Event

8 hr 27 min ago

Tesla (TSLA) shares plunged Friday after the EV maker’s long-awaited robotaxi event failed to live up to investors’ expectations.

Since bottoming out in early August, Tesla shares trended higher until early October before retracing within a flag, a chart pattern that signals a continuation of the stock’s move higher.

However, volumes remain below average, suggesting larger market participants may be sitting on the sidelines digesting the automaker’s October updates, including delivery numbers, the robotaxi event and the release of quarterly results in two weeks.

Investors should watch key support levels on Tesla’s chart around $225, and $205, while monitoring overhead resistance areas near $265 and $300.

The stock was down 8% at around $220 at 1:00 p.m. ET Friday.

Read the full technical analysis piece here.

–Timothy Smith

Major Indexes on Pace for 5th Straight Week of Gains

9 hr 13 min ago

Major U.S. indexes are on track to post their fifth consecutive week of gains, as the stock market once again recovered from a rocky start to a week.

The S&P 500 and Dow Jones Industrial Average are poised to close at record highs, while the Nasdaq Composite was just 1.7% from its all-time closing high as of midday on Friday.

Wells Fargo Jumps After Earnings Report

9 hr 59 min ago

Wells Fargo (WFC) shares rose roughly 6% Friday morning after the bank reported better-than-expected third-quarter revenue and profit.

The lender reported $5.11 billion in net income for the quarter, down from $5.77 billion last year but nearly half a billion dollars better than analysts had expected. Wells Fargo’s revenue also was down year-over-year at $20.37 billion but came in slightly above estimates.

Shares of Wells Fargo have gained nearly 25% this year.

–Aaron McDade

Stellantis Slides as Automaker Announces Executive Shakeup

10 hr 34 min ago

Stellantis (STLA) shares lost ground in early trading Friday after the parent of the Jeep, Chrysler, and other brands announced a shakeup of its management as it tries to recover from a sales slump.

The changes included replacing CFO Natalie Knight with China COO Doug Ostermann.

The company said the changes were made to “redouble” its focus on key priorities and address global challenges facing the industry.

CEO Carlos Tavares called this a “Darwinian period for the automotive industry,” and said the new management team is expected to help “tackle the challenges ahead.” 

Stellantis has been reeling from a slowing car market, excess inventory, and Chinese competition. Last month, the automaker cut its outlook. Last week, it posted a significant drop in U.S. sales. Barclays downgraded the stock following the news, warning it sees no real recovery for Stellantis until at least the first half of next year. 

Stellantis shares were down nearly 3% Friday morning and have lost 44% since the start of 2024.

–Bill McColl

Tesla Shares Tank After Robotaxi Event Fails to Impress

11 hr 51 min ago

Tesla (TSLA) shares stumbled early Friday as markets appeared to be initially unimpressed with the electric vehicle (EV) maker’s “We, Robot” event last night, which included the unveiling of autonomous taxi and van models.

The autonomous taxi, called the “Cybercab,” will go into production by 2026 once Tesla has approval from regulators for its full self-driving software, which Chief Executive Officer (CEO) Elon Musk said should be rolled out in California and Texas by next year for its Model 3 and Model Y.

At the event, Musk also revealed the “Robovan,” a larger autonomous vehicle designed to carry groups of people or cargo, along with showcasing Tesla’s Optimus humanoid robot, with some helping serve drinks, dance, and perform other functions.

One factor pressuring Tesla’s stock could be that analysts had said they expected the company could reveal a lower-cost vehicle that could be released next year. Wedbush analysts said in a Friday note that the lack of a “Model 2” announcement is the “elephant in the room this morning,” as they also acknowledged that Musk and Tesla “ideally” should have spent more time on details like how the robotaxi network will operate.

Tesla shares were down nearly 10% in early trading Friday.

–Aaron McDade

JPMorgan Rises as Earnings Handily Beat Estimates

12 hr 39 min ago

JPMorgan Chase (JPM) shares were up about 1% in premarket trading after the bank reported revenue and net interest income growth in its third-quarter results.

The world’s largest bank by market cap posted revenue of $42.65 billion, well above the $39.87 billion it reported a year ago and the $40.85 billion consensus estimate of analysts compiled by Visible Alpha. Reported net interest income (NII) rose to $23.41 billion from $22.73 billion.

Profit fell slightly to $12.9 billion from $13.15 billion, but edged higher to $4.37 from $4.33 on a per-share basis. Analysts were expecting $11.81 billion, or $3.97 per share.

Higher interest rates in recent years helped JPMorgan and other banks reach record levels of net interest income, but rising deposit costs have affected bank earnings in recent quarters while loan growth has stalled.

JPMorgan and other banks are reporting earnings amid a shifting economic environment, as the Federal Reserve last month cut interest rates for the first time since 2020. Analysts expect that the newly lowered rates and potential for future cuts should help lower deposit costs and spark more investment banking and loan growth in the coming quarters.

Analyst and investor attention has also focused recently on how JPMorgan will form a succession plan for 68-year-old Chief Executive Officer (CEO) Jamie Dimon. The influential executive has said in recent months that the bank wants to make sure it gets the plan right when he steps away in the coming years

–Aaron McDade

Major Index Futures Lower Ahead of Economic Data Releases

13 hr 30 min ago

Futures tied to the Dow Jones Industrial Average were down less than 0.1%.

S&P 500 futures were also down less than 0.1%.

Nasdaq 100 futures were off 0.3%.