Markets News, Dec. 19, 2023: S&P 500 Closes Within 1% of All-Time as Interest Rate Optimism


Equity Indexes Wrap: 2023’s Laggards Have Their Day in the Sun; FactSet Weighs on Professional Services Stocks

December 19, 2023 04:40 PM EST

The Dow

Shares of Walgreens Boots Alliance (WBA) rose 4.2%, leading the index higher.

Caterpillar (CAT) jumped 2.5% to close at an all-time high of $292.95. 

Intel (INTC) outperformed its tech sector peers, rising 2.1% compared with the sector’s 0.2% gain. 

Boeing (BA) shares rose 1.2% after it won its first order from German airline Lufthansa since 1995. 

Apple (AAPL) shares edged up 0.5% amid reports it was developing workarounds to resolve a patent infringement dispute and avoid an import ban on certain Apple Watches

IBM (IBM) shares fell 0.7% after it sold part of its Research Triangle Park in North Carolina to developer Hines for $66 million. 

The S&P 500

Enphase Energy (ENPH) led the index, rising 9.1% after it said it would cut 10% of its workforce as it cuts costs to weather macroeconomic headwinds.

Other leaders included Catalent (CTLT), up 6.6%, Estée Lauder (EL), up 4.3%, and FMC (FMC), up 3.6%. All three have dramatically underperformed for the larger market this year. 

Pfizer (PFE) shares gained 4.1% as Citigroup analysts added it to their catalyst watch list, citing their belief management intentionally downplayed expectations with their disappointing 2024 guidance. 

FactSet Research (FDS) shares lost 2.1% after the research provider cut its full fiscal year earnings outlook and said it is planning cost cuts. 

FactSet’s grim outlook weighed on other consulting and B2B firms. EPAM System (EPAM) fell 1.7%, while Ceridian HCM (CDAY) fell 1.5% and Verisk Analytics (VRSK) fell 1.3%. 

The Nasdaq-100

Illumina (ILMN) gained 8.1%, adding to yesterday’s gains following the company’s announcement that it would divest its GRAIL unit, which it acquired in 2021 without regulatory approval. 

Moderna (MRNA) gained 4.3%, extending its rebound after losing more than 60% of its value between the beginning of the year and early November. 

Other index leaders today: Warner Bros. Discovery (WBD), up 3.3%, Fortinet (FTNT), up 2.9%, and Exelon Corp. (EXC), 2.8% higher. 

DoorDash (DASH), one of the index’s newest entrants, led the Nasdaq’s laggards, falling 1.3%. Fellow newbie MongoDB (MDB) fell 0.7%. 

Nvidia (NVDA) lost 0.9% after more than tripling this year. Chipmaker Broadcom (AVGO) fell for the first time in eight sessions, losing 0.7%. 

Rush to Regulate Artificial Intelligence Could Favor Big Fish, Analysts Say

December 19, 2023 03:38 PM EST

After President Joe Biden issued an artificial intelligence (AI)-focused executive order in 2023, experts suggest it’s only the beginning of AI regulation in the U.S.

“Privacy, safety, security, transparency, avoiding bias and discrimination, and accountability,” are common themes considered in AI regulation, Duane Pozza, a lawyer at Wiley in Washington, D.C.

With more AI regulation anticipated in 2024, tech giants, like Microsoft Corp. (MSFT), could be best positioned to gain while regulators work to keep up with the emerging technology.

“Regulation typically comes with higher costs and higher barriers to entry,” Eric Sheridan, senior equity research analyst at Goldman Sachs, said in a report, noting that the “larger technology companies can absorb the costs of building these large language models, afford some of these computing costs, as well as comply with regulation.”

Wedbush analyst Dan Ives echoed that sentiment, saying that the “lack of consensus” in Washington “makes Big Tech the winner for now, led by Microsoft.”

TradingView

-Naomi Buchanan

Enphase Energy Slashes Jobs and Makes Other Cuts in a ‘Challenging’ Environment 

December 19, 2023 02:48 PM EST

Enphase Energy Inc. (ENPH) is slashing jobs as the maker of solar power equipment said it was dealing with a “challenging macroeconomic environment.”

In a regulatory filing Monday, Chief Executive Officer (CEO) Badri Kothandaraman said Enphase is laying off 350 contractors and employees, or 10% of its workforce. In addition, the company said it is “streamlining our operations” by ending contract manufacturing in Wisconsin and Timisoara, Romania.

High interest rates have led to a significant decline in consumer demand for solar products, he said. The industry also has been rocked by a law change in California, the biggest U.S. solar market, that lowered the compensation homeowners get for feeding electricity back to the grid, Kothandaraman said.

Shares of Enphase Energy rose more than 7% Tuesday, although they remain down about 50% for the year.

-Bill McColl

TradingView.

Midday Movers

December 19, 2023 02:14 PM EST

Affirm Holdings Inc. (AFRM): Shares of the fintech firm jumped 17% after it expanded its buy now, pay later partnership with Walmart to include self-checkout. 

Enphase Energy (ENPH): Shares of the green tech company rose 7% after it said it would cut 10% of its workforce as part of cost-cutting measures. 

Pfizer (PFE): Shares of the pharmaceutical company rose 4% after Citigroup put the stock on a 90-day catalyst watch, arguing the company undershot with its 2024 guidance that disappointed investors last week and sent shares tumbling to a 10-year low. The company, along with Germany’s BioNTech (BNTX), also sued the governments of Poland and Hungary for Covid vaccine debts. BioNTech shares rose about 1%.

Cisco Systems Inc. (CSCO): Shares fell 0.4% after chief financial officer Scott Herren sold almost 120,000 shares valued at about $6 million.

International Business Machines Corp. (IBM): Shares of the tech giant dropped 0.4% after it sold part of its Research Triangle Park campus in North Carolina to developer Hines for $66 million.

Tesla to Raise Wages for Some Workers at Nevada Gigafactory Amid Pressure to Unionize

December 19, 2023 01:34 PM EST

Tesla (TSLA) is reportedly planning to raise hourly pay for some workers at its battery factory in Nevada by 10% or more in January, amid growing pressure from the United Auto Workers (UAW) union to organize Tesla workers.

The UAW launched a campaign to organize non-union workers at Tesla and other automakers in November after the union negotiated historic contracts with the Big Three—Ford (F), General Motors (GM), and Stellantis (STLA)—following a six-week strike.

The electric vehicle maker also faces growing pressure from organized labor activity in Sweden, Denmark, Finland, and Norway over its refusal to enter into collective agreements with labor unions.

Tesla shares were up 1.6% at about $256 per share Tuesday afternoon, and have gained over 108% this year.

-Naomi Buchanan

New Construction Jumps in Another Good Sign for Housing Market

December 19, 2023 12:22 PM EST

Falling mortgage rates pushed homebuilder sentiment higher in November, leading developers to break ground on new construction at the fastest pace since May.

New Census Bureau data shows housing starts in November came in at an adjusted annual rate of 1.56 million, more than the 1.36 million economists were expecting. November’s results were nearly 15% higher than October’s adjusted reading of 1.36 million, and 9% above housing starts at the same time last year.

The yield on Treasurys is one of many factors that influence mortgage rates, meaning the housing market may be in for more good news in the coming months. Treasury yields have fallen dramatically this month, with the 10-year yield retreating to about 3.91% Tuesday afternoon from 4.33% at the end of November.

Shares of major homebuilders Pultegroup (PHM), D.R. Horton (DHI), and Lennar (LEN) were up 1%, 1.1%, and 0.8%, respectively, Tuesday afternoon.

Alphabet’s Google Agrees to Pay $700 Million in Settlement Over Play App Store

December 19, 2023 10:54 AM EST

Alphabet’s (GOOGL) Google agreed to pay $700 million to consumers and states, and make changes allowing for greater competition in its app Play store, according to the terms of an antitrust settlement disclosed Monday.

Of the $700 million, $630 million will go into a consumer settlement fund and $70 million into a state fund, according to the settlement, which still awaits judicial approval.

Google VP of Government Affairs & Public Policy Wilson White also outlined some changes to the company’s app store in a blog post. Among these will be “user choice billing,” where developers can now show different pricing options within the app. The company is also looking to streamline “sideloading,” which is the installation of apps outside of the Play store.

Shares of Google parent Alphabet were up 0.4% at $136 per share Tuesday morning, and have gained over 53% in 2023 so far.

-Kevin George

Kenvue Shares Rise After Win in Tylenol Suit

December 19, 2023 10:13 AM EST

Shares of Kenvue (KVUE), Johnson & Johnson’s (JNJ) recently spun-off consumer health products unit, gained 5% Tuesday morning after a federal judge dealt the Tylenol maker an upper hand in its fight against a product liability lawsuit. 

A U.S. district court judge for the Southern District of New York ruled to exclude the expert opinions brought by plaintiffs alleging in-utero acetaminophen exposure could cause children to develop autism spectrum disorder and hyperactivity attention disorder. 

Analysts at JPMorgan called the ruling “a clean sweep” for Kenvue, adding the decision “effectively collapses the plaintiffs’ case in the multi-district litigation.”

With Tuesday’s gains, Kenvue traded at a three-month high of more than $22 but was still down more than 15% from its debut in May.

Stocks Making the Biggest Moves Premarket

December 19, 2023 09:28 AM EST

Gains:

Kenvue Inc. (KVUE): Shares of Johnson & Johnson’s (JNJ) recently spun-off consumer health unit gained more than 5% after a federal court judge ruled to exclude expert opinions supporting plaintiffs’ assertions of a connection between in-utero acetaminophen exposure and autism spectrum disorder. 
Enphase Energy Inc. (ENPH): Shares of the green tech company rose more than 2% after it said it would cut its workforce by 10% in a global restructuring. 
Alphabet Inc. (GOOGL): Shares of the tech giant rose about 0.5% after it agreed to pay $700 million and allow more competition in its Google Play app store to settle an antitrust suit.

Losses:

Accenture Plc (ACN): Shares of the consulting firm fell 3% after its current-quarter revenue guidance fell short of analysts’ estimates. 
Permian Resources Corp. (PR): Shares of the oil exploration and production company fell more than 2% after it announced shareholders were selling more than 39 million shares in a secondary public offering

Stock Futures Up Ahead of Fed Speakers

December 19, 2023 08:42 AM EST

Futures contracts connected to the Dow Jones Industrial Average were up 0.2% in premarket trading.

S&P 500 futures also rose 0.2%.

Nasdaq 100 contracts added just less than 0.2% after the index hit a record yesterday.



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