Markets News, Jan. 24, 2024: Dow Slips as Stock Rally Loses Steam; Netflix, ASML Soar on Earnings

Update—Jan. 25, 2024: For today's live markets coverage, see here.

Stocks pared back gains to close modestly higher after surging early in the day following solid earnings reports from Netflix and AI chip linchpin ASML.

The Nasdaq Composite gained 0.4% Wednesday, while the S&P 500 inched up 0.1% and the Dow Jones Industrial Average slid 0.3%.

Netflix (NFLX) added more than 13 million new subscribers in the fourth quarter, blowing past Wall Street's estimates. Meanwhile, orders for ASML Holding's (ASML) semiconductor fabrication equipment surged to a record in the fourth quarter.

Wednesday marks another big day for corporate earnings, with Tesla (TSLA) and IBM (IBM) reporting after the bell.

Treasury yields climbed while the dollar slipped.

Stocks tentatively shrugged off a crush of mixed earnings reports from the likes of Verizon, Procter & Gamble, and 3M, to inch higher yesterday.

Equity Indexes Wrap: Netflix, ASML Lift the Nasdaq; Telecoms, Consumer Staples Slip

January 24, 2024 04:20 PM EST

The Dow

Chevron (CVX) rose 2%, one of several oil companies to advance Wednesday.

Boeing (BA) gained 1.3% after it delivered its first 737 Max jet to China since 2019, ending a nearly 5-year nationwide grounding of the model.

Microsoft (MSFT) climbed 0.9% to close just shy of a $3 trillion market cap. It became only the second company in history to reach that milestone in intraday trading.

Intel (INTC) rose 0.4%. It is expected to report a surge in earnings when it publishes its quarterly results tomorrow afternoon.

Visa (V) inched up 0.2% ahead of its earnings report after the bell tomorrow. The financial giant is expected to report a more than 10% increase in earnings amid rising transaction and payment volumes. 

3M (MMM) fell 3.5%, continuing to slide after it offered a disappointing full-year earnings outlook yesterday. 

Verizon (VZ) slipped 2.2%, giving up some of its gains from yesterday when the stock surged almost 7% following a better-than-expected earnings report. ;

Dow (DOW) slid 1.5% ahead of its quarterly earnings report before the bell tomorrow. 

The S&P 500

Netflix (NFLX) led the index higher, climbing 10.7% after reporting a surge in new subscribers in the fourth quarter. 

Cessna maker Textron (TXT) rose 7.9% following a better-than-expected earnings report. 

TE Connectivity (TEL) added 6.7% after beating earnings estimates despite posting a decline in sales. 

Freeport-McMoRan (FCX) gained 4% after reporting better-than-expected fourth-quarter earnings amid higher demand for copper.

DuPont de Nemours (DD) plummeted 14% after saying weak sales in China would weigh on current-quarter earnings. 

Kimberly-Clark (KMB) slid 5.6% after the Kleenex maker reported sluggish sales growth and lower fourth-quarter earnings than analysts expected. 

AT&T (T) lost 2.9% after its quarterly earnings fell short of Wall Street estimates. 

Tesla (TSLA) slipped 0.6% ahead of its quarterly earnings report after the bell. 

Intuitive Surgical (ISRG) shares slipped 0.4%, giving up early gains following its better-than-anticipated earnings report

The Nasdaq 100

ASML Holding (ASML) jumped 8.8% after it reported record orders in the fourth quarter as demand for its semiconductor fabrication equipment surged. Peers Applied Materials (AMAT) and KLA Corp. (KLAC) rose 4.2% and 3.2%, respectively. 

Chipmaker Advanced Micro Devices (AMD) climbed 5.8% after analysts at New Street Research upgraded the stock to “buy,” calling it a relatively low-risk data center and AI chip play. 

Nvidia (NVDA) gained 2.5% to close with a market cap above $1.5 trillion for the first time. 

Meta (META) shares rose 1.4%, returning it to the ranks of $1 trillion companies. 

Baker Hughes (BKR) fell 4.8% after fourth-quarter revenue missed analyst estimates, overshadowing a beat on earnings amid robust demand from natural gas and international producers.

Texas Instruments (TXN) slid 2.4% after the analog chipmaker reported revenue and earnings fell in the fourth quarter amid weak demand from industrial and automotive clients.

DuPont Stock Plunges After Company Issues Profit Warning Amid Weak China Volumes

January 24, 2024 03:38 PM EST

DuPont (DD) shares plunged Wednesday after the chemical conglomerate issued a profit warning, citing a slump in volumes due to weak demand in China.

The company said that the channel inventory destocking and weak demand from China would affect results for both the fourth quarter and the current quarter. Those factors, as well as the lack of one-off items that benefited EBITDA in the fourth quarter, would lead to a drop in sales and earnings in the first three months of 2024, the company said.

In a statement Wednesday, the company said it anticipates current quarter earnings per share (EPS) of between 63 cents and 65 cents, compared with analysts' expectation of 88 cents. First-quarter revenue would be $2.8 billion, again behind the $3 billion projected by analysts.

The company’s preliminary fourth quarter 2023 financial report, meanwhile, showed a loss from continuing operations of between $220 million and $370 million. Preliminary full-year 2023 sales were $12.07 billion, below the company's guidance. DuPont shares were down 13.2% at $64.82 Wednesday afternoon, trading at its lowest level since May.

-Bill McColl

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AT&T Earnings Miss the Mark Despite Revenue Growth

January 24, 2024 02:47 PM EST

AT&T (T) shares slid Wednesday after reporting fourth-quarter earnings that missed analyst expectations, despite a revenue beat.

The wireless carrier's adjusted earnings of 54 cents per diluted share came in lower than the 56-cent consensus among analysts surveyed by Visible Alpha. The company reported adjusted earnings of 61 cents a share in the year-ago quarter.

AT&T's quarterly revenue grew 2.2% from a year earlier to a better-than-expected $32 billion. For the quarter, the company reported 5.9 million net adds, greater than the 5.4 million that analysts had expected. Postpaid wireless net additions came in at 526,000 for the quarter, up from the prior quarter but lower than a year ago. AT&T stock fell more than 3% Wednesday, putting them down 13% in the last

-Mrinalini Krishna

ASML Stock Soars on Chipmaking Equipment Giant's Earnings Beat

January 24, 2024 01:45 PM EST

ASML (ASML) surged over 11% in intraday trading Wednesday after the chipmaking equipment giant reported earnings that beat expectations, with record orders in the fourth quarter.

Europe's largest tech firm by market capitalization said its net profit rose 9% from a year earlier to 2 billion euros ($2.2 billion) with sales of 7.2 billion euros ($7.8 billion) during the fourth quarter. Both exceeded analyst estimates.

Quarterly net bookings rose to a record 9.2 billion euros ($10 billion), driven by demand for some of ASML's most sophisticated equipment.

However, the company warned future sales to China could be impacted by new export restrictions, with deliveries to China anticipated to fall 10-15% in 2024.

With Wednesday's gains, ASML's stock price has risen more than 28% over the past year.

-Kevin George

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Midday Movers

January 24, 2024 01:01 PM EST

Netflix Inc. (NFLX): Shares soared more than 12% after the streamer reported adding 13 million subscribers in the fourth quarter, well above analysts’ estimates. 

Textron Inc. (TXT): Shares of the Cessna maker jumped more than 8% to an intraday record after forecasting 2024 earnings above Wall Street estimates as the U.S. Army replaces aging Black Hawk helicopters. 

Advanced Micro Devices (AMD): Shares of the semiconductor maker jumped more than 6% after New Street Research upgraded the stock to “buy” on its AI outlook. 

Kimberly-Clark Corp. (KMB): Shares of the Kleenex maker slumped more than 4% after reporting disappointing fourth-quarter sales and earnings as benefits from price hikes weakened. 

Baker Hughes Co (BKR): Shares of the oilfield services provider fell 3% after fourth-quarter revenue fell short of analyst estimates, overshadowing a beat on earnings amid robust demand from natural gas and international producers. 

Texas Instruments Slides on Continued Slump in Semiconductor Demand

January 24, 2024 11:50 AM EST

Shares of analog chipmaker Texas Semiconductor (TXN) fell more than 2% Wednesday morning after the company reported revenue and earnings fell in the fourth quarter amid soft demand from industrial and automotive clients.

Texas Semiconductors’ net income fell 30% year-over-year to $1.37 billion, or $1.49 per share. Revenue slid 13% to $4.08 billion, falling short of analyst estimates.

“Our results reflect increasing weakness in industrial and sequential decline in automotive, as customers work to reduce their inventory levels,” said head of Investor Relations Dave Pahl in a call with analysts. Texas Instruments derived 74% of its revenue in 2023 from industrial and automotive customers.

And the company is expecting that weakness to continue this quarter. Texas Instruments forecast first-quarter revenue of between $3.45 billion and $3.75 billion, down from $4.38 billion last year. And earnings per share are expected to fall to a range of $0.96 to $1.16, a much larger drop than analysts were expecting. But the story at Texas Instruments, despite its array of semiconductor offerings, isn’t that of the entire semiconductor industry. 

Netherlands-based ASML Holding (ASML) on Wednesday reported a surge in demand for its chipmaking equipment, which is used to make the sophisticated chips that run smartphones and data centers. The company, like Nvidia (NVDA), has benefited from the artificial intelligence arms race, which has generated a tidal wave of investment in advanced semiconductors and the means of making them.

Microsoft Becomes Only Second $3 Trillion Company

January 24, 2024 10:58 AM EST

Microsoft (MSFT) shares rose more than 1% on Wednesday, pushing its share price above $400 and its market cap over $3 trillion for the first time. 

Microsoft is only the second company to ever reach the milestone, preceded by Apple (AAPL), which first hit $3 trillion in January 2022, but didn’t close above that mark until last June

Microsoft briefly overtook Apple as the most valuable public company in the world earlier this month when a series of downgrades and fears about consumer spending in China sent Apple shares tumbling. The iPhone maker has since recovered and retaken the title. 

Treasury Yields Rise on Strong PMI Print

January 24, 2024 10:51 AM EST
Treasury yields jumped Wednesday morning after data showed U.S. business activity rose in January at its fastest pace in half a year, more evidence of the economy’s resilience in the face of high interest rates.

The yield on the benchmark 10-year Treasury note jumped 4 basis points to about 4.13% immediately following the release of S&P Global’s Flash U.S. Purchasing Managers Index (PMI). The 2-year yield, which had fallen to about 4.27% before the release, leapt as high as 4.35%.

U.S. businesses, in both manufacturing and services, reported an increase in new orders in January. They also reported being more optimistic about their outlook, with they confidence reaching its highest level since May 2022.

Input prices, according to the purchasing managers surveyed by S&P Global, rose at their second-slowest pace since October 2020. And output prices rose at the slowest rate since May 2020.

eBay Stock Surges After Saying It Will Cut 9% of Its Workforce—Monitor These Key Levels

January 24, 2024 09:58 AM EST

Shares of online marketplace platform eBay (EBAY) gained as much as 3% early Wednesday after the company announced on Tuesday that it intends to reduce its headcount by 1,000 roles, equating to roughly 9% of its workforce.

"While we are making progress against our strategy, our overall headcount and expenses have outpaced the growth of our business," eBay CEO Jamie Iannone said in a letter to staff.

The job losses at eBay come roughly 12 months after the company shed 500 roles across its global workforce and follow layoffs at other tech giants, including Google (GOOGL) and Amazon (AMZN), with many companies in the sector scaling back after a hiring spree during the pandemic.

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Source: TradingView.com.

Shares of eBay have oscillated within a descending channel since early June, establishing clear mean reverting areas on the chart.

In early trading, the stock jumped to just under $43, where the price found resistance from a confluence of the channel’s top trendline and the 200-day moving average.

If the stock gives up its early gains entirely, buyers could potentially step up to the plate near the lower portion of the pattern that closely aligns with last year’s low around $36.

-Timothy Smith

Stocks Making the Biggest Moves Premarket

January 24, 2024 09:06 AM EST

Gains:

  • Netflix Inc. (NFLX): Shares of the streaming leader jumped about 10% after it reported a surge in new subscribers in the fourth quarter, helping it to top Wall Street’s revenue estimates and forecast current-quarter earnings above expectations. 
  • ASML Holding N.V. (ASML): Shares of the Dutch semiconductor manufacturing equipment maker climbed more than 6% after it reported record orders in the fourth quarter amid surging demand for advanced microchips. 
  • Elevance Health (ELV): Shares rose about 4% after the health insurer beat fourth-quarter earnings expectations and offered upbeat current-quarter guidance. 

Losses:

  • DuPont de Nemours Inc. (DD): The chemical maker’s shares fell more than 11% after it warned soft demand in China would weigh on first-quarter sales, which it forecast below analyst estimates. 
  • AT&T Inc. (T): Shares fell about 3% after the company’s quarterly earnings missed analysts’ estimates despite a surge in new wireless additions. The company’s forecast for full-year earnings also fell short of Wall Street’s expectations. 
  • Texas Instruments Inc. (TXN): The semiconductor maker’s shares slid 3% after it reported disappointing fourth-quarter results amid a prolonged slump in industrial and automotive semiconductor demand. 

Stock Futures Rise Following Netflix, ASML Earnings

January 24, 2024 08:36 AM EST
Futures contracts connected to the Dow Jones Industrial Average were up 0.4% in premarket trading on Wednesday.
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S&P 500 futures gained nearly 0.6%.
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Nasdaq 100 futures were up about 0.9% about an hour before markets opened.
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