Markets News, June 13, 2024: Tech Rally Propels S&P 500 to Fourth Straight Record

Stock Indexes Wrap: Broadcom, Nvidia Boost S&P 500 in Mixed Trading Day

13 hr 41 min ago

The Dow

Apple (AAPL) ticked up 0.6%, rising for the third straight day after unveiling artificial intelligence features coming to new operating systems later this year. 

Boeing (BA) slid 1.1% amid reports the jet maker was investigating manufacturing problems with some undelivered 787 Dreamliners. 

The S&P 500

Broadcom (AVGO) shares soared 12.3% to close at a record high after the company reported soaring AI chip revenue in the most recent quarter and announced a 10-for-1 stock split.

AI favorites Super Micro Computer (SMCI) and Nvidia (NVDA) soared amid the Broadcom-sparked optimism. Super Micro jumped 12.4% and Nvidia advanced 3.5%. 

Kimberly-Clark (KMB) gained 3.1% after Bank of America double-upgraded the stock, citing benefits from its reorganization efforts.

Tesla (TSLA) gained 2.9% after Elon Musk said shareholders were overwhelmingly voting in favor of his $56 billion pay package and plans to reincorporate in Texas. 

Paramount Global (PARA) slid 6.9% as investors continued to digest controlling shareholder Shari Redstone’s decision on Tuesday to call off a merger with Skydance Media. 

The Nasdaq 100

Semiconductor stocks followed Broadcom higher, with Micron (MU) up 1.7% and Qualcomm (QCOM) gaining 1.1%. 

Starbucks (SBUX) added 1.1% after the Supreme Court sided with the coffeehouse chain in a dispute over the firing of pro-union employees in 2022. 

Unprofitable software companies were many of the index’s biggest laggards. MongoDB (MDB) fell 4.8%, Atlassian (TEAM) shed 4.2%, and ZScaler (ZS) declined 4.1%. 

Amazon (AMZN) and Alphabet (GOOGL) missed out on the day’s tech rally. They lost 1.6% and 1.5%, respectively. Meta (META) slid 0.8%.

MicroStrategy To Buy More Bitcoin, Plans to Raise $500 Million

14 hr 16 min ago

MicroStrategy (MSTR) is looking to add more bitcoin (BTC) to its stash, and is raising $500 million in debt to facilitate the purchase, along with other corporate purposes, the company announced Thursday.

As of April 26, the company owned 214,400 bitcoins that at today’s prices, assuming no change in the size of the holding, would be valued at roughly $14 billion.

Other companies have purchased bitcoin, but none to the extent that MicroStrategy has. And, to that effect, MicroStrategy’s stock price is more closely correlated with bitcoin prices than any other bitcoin-investing company.

While the price-trend lines for bitcoin and MicroStrategy seem to move in tandem on the chart below, MicroStrategy stock has raced ahead of the cryptocurrency since February. Year-to-date, bitcoin prices have gone up roughly 50%, while MicroStrategy stock has more than doubled.

–Kyle Torpey

GameStop Shareholder Meeting Postponed Following Technical Difficulties

15 hr 20 min ago

GameStop’s (GME) annual shareholder meeting was reportedly postponed on Thursday after a crush of investors and spectators tuning into the livestream caused the servers hosting the event to crash. 

The event, which was scheduled to begin at 11 a.m. ET, was adjourned after nearly an hour of technical difficulties that prevented shareholders from attending the meeting virtually. The company said it would provide an update “as soon as possible” detailing when the meeting would reconvene. 

GameStop, a struggling video game retailer, has drawn outsized attention from Wall Street ever since “Roaring Kitty,” or Keith Gill, remerged on X several weeks ago, reigniting the meme stock craze that he led in early 2021.

GameStop shares have soared and plummeted in weeks of volatile trading. During that time, GameStop has sold more than 100 million additional shares in two separate sales and unexpectedly reported grim first-quarter results. 

Gill last week hosted his first YouTube livestream since 2021, during which he revealed his GameStop position was worth more than $320 million at the time. Gill has continued to sporadically post memes on X since last week’s livestream, while GameStop’s price swings have moderated.

Shares of GameStop were up nearly 13% Thursday afternoon. They have gained about 64% so far this year.

What Does Thursday’s PPI Report Mean for the Fed?

16 hr 2 min ago

Prices paid at the wholesale level took a surprising turn lower in May, providing more evidence for Federal Reserve officials that price pressures continue to ease.

Census Bureau data showed the Producer Price Index (PPI) for May dropped 0.2% when compared with April, less than the slight increase that economists had forecasted.

PPI is of interest to the Federal Reserve because some of the categories flow into their preferred measure of inflation, the Personal Consumption Expenditures (PCE) price index.

“The surprise drop in wholesale prices helps support expectations that disinflation has begun to inch lower on a more sustained basis,” said Quincy Krosby, LPL Financial chief global strategist.

The Federal Reserve will likely want to see a “couple more months” of declining inflation before moving to cut rates as many as two times this year, beginning in September, said Bernard Yaros, lead U.S. economist at Oxford Economics. 

“We think this is likely, with residual seasonality behind us, the labor market in better balance, deflation in certain key goods prices, and housing inflation potentially due to switch to a lower gear,” he said. 

Thursday’s report was welcome news in bond markets. Treasury yields, which move inversely to bond prices, retreated for a second consecutive day, reflecting expectations that interest rates and inflation will be lower in the future. The benchmark 10-year yield fell below 4.25% for the first time since March.

–Terry Lane

What Analysts Think of Broadcom’s Share Price

16 hr 51 min ago

Broadcom (AVGO) stock was on track to close at a record high for a fourth straight day Thursday as analysts touted its position in the booming artificial intelligence (AI) market following a blowout earnings report.

Bank of America raised its price target to $2,000 from $1,680, calling Broadcom its “top 2 AI pick” on custom AI chips. That price would put Broadcom’s market capitalization at more than $930 billion, but analysts also suggested the company could “join the trillionaires club” along with Alphabet (GOOGL), Amazon (AMZN), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), and Nvidia (NVDA).

Goldman Sachs also boosted its price target, to $1,850 from $1,550, arguing that along with Nvidia, it views “Broadcom as a critical piece to the ongoing AI infrastructure build-out.” It said it sees the share price outperforming estimates.

Mizuho also increased its price target on the stock, to $1,900 from $1,625.

Shares of Broadcom were up 12% at $1,675 early Thursday afternoon.

–Bill McColl

Stocks Making the Biggest Moves Midday

18 hr 5 min ago

Gains:

Tesla (TSLA): Shares rose 4% after CEO Elon Musk said late Wednesday that shareholders are set to approve his $55.8 billion pay package and the EV maker’s reincorporation in Texas at the company’s annual shareholder meeting today. 

Broadcom (AVGO): Shares surged more than 14% after the chipmaker reported better-than-expected fiscal second-quarter revenue, fueled by AI product sales. It also announced a 10-for-one stock split as Wall Street darling Nvidia (NVDA) did recently. Nvidia shares rose 3%. 

Losses:

Dave & Buster’s Entertainment (PLAY): Shares tumbled more than 11% after the game-themed restaurant chain’s first-quarter results undershot analysts’ forecasts.

MicroStrategy (MSTR): Shares in the software company, which has morphed into one of the world’s largest corporate holders of bitcoin, fell 6% after the company said it plans to sell $500 million in convertible bonds in a private placement, with proceeds going toward buying more of the token.

Dave & Buster’s Stock Drops as Earnings Miss Estimates Amid Soft Consumer Demand

18 hr 28 min ago

Dave & Buster’s Entertainment (PLAY) shares slumped after the restaurant and entertainment chain posted quarterly results that fell short of expectations amid challenging economic conditions weighing on consumer demand.

For the quarter ending May 5, the company reported diluted earnings of 99 cents per share, significantly below the $1.73 a-share-figure expected by analysts. Revenue in the period of $588.1 million fell 1.5% from a year earlier and came in below the consensus forecast of $616 million. Moreover, same store sales declined 5.6% from last year’s equivalent quarter, a steeper fall than the 3.8% Street estimate.

Breaking down the top line, the company’s entertainment revenue, which makes up about two-thirds of net sales, fell 1.9% to $385.7 million, while revenue in its food and beverage business tallied $202.4 million, down from $204.2 million in the same quarter last year.

Since Dave & Buster’s shares formed a bull trap in early April, the price has continued to trend lower. Although the price managed to close above the closely-watched 200-day moving average leading into the quarterly results, it sits poised to resume its sell-off following the chain’s earnings and revenue miss.

Looking ahead, investors should monitor if buyers can defend a zone of support from prior price action over the past 15 months between $45 and $47. A failure to hold this key area could see the price revisit lower support around $37.50.

The stock was down 10% and is 16% lower this year.

–Tim Smith

Tesla Stock Gains as Musk Says His $56B Pay Deal Will Be Approved

19 hr 9 min ago

Tesla (TSLA) shares gained Thursday after Chief Executive Officer (CEO) Elon Muskannounced that indications are his controversial $55.8 billion pay package will be approved when the votes from today’s shareholder meeting are tallied. 

Musk wrote Wednesday night on X that both the compensation deal, plus a second resolution on moving the electric vehicle (EV) maker’s incorporation from Delaware to Texas, were on their way to passing “by wide margins.”

Shareholders were asked to again back the plan, which they originally approved in a 2018 vote. However, a Delaware judge threw it out in January, ruling that the payment, the largest in corporate history, was excessive.

The final results of the votes will be revealed at the shareholder meeting being held at 3:30 PM Central Time at Tesla’s Austin, Texas, headquarters.

Tesla shares were up 3% but they are still down by a fifth this year.

–Bill McColl

Watch Out for These Levels in Broadcom’s Stock Price

20 hr 13 min ago

Shares in Broadcom (AVGO) surged after the chipmaker reported better-than-expected fiscal second-quarter revenue, fueled by artificial intelligence (AI) product sales reaching a record high. Following in the footsteps of Wall Street darling Nvidia (NVDA), Broadcom also announced a 10-for-1 stock split.

With the stock hitting a record high on Thursday, investors can forecast a profit target using technical analysis by applying the measuring principle. To do this, simply calculate the distance of the ascending triangle’s widest portion in dollars and add that amount to the pattern’s top trendline.

In this particular case, add $330 to $1,415, which projects a price target of $1,745. This provides a general area on the chart where the stock may run into selling pressure, especially if other indicators, such as the relative strength index (RSI), warn of overbought conditions.

When the stock undergoes retracements, investors should monitor the ascending triangle’s top trendline at $1,415, an area on the chart that will likely flip from prior resistance into future support. A breakdown below this technically important level could see the stock revisit lower support around $1,132, where the price finds a confluence of support from the December swing high and rising 200-day moving average.

Broadcom shares were up more than 13% at $1,709 early Thursday, and have gained more than 50% this year.

–Tim Smith

Stock Futures Mixed

21 hr 34 min ago

Dow futures were down 0.3% in premarket trading Thursday.

S&P futures were up 0.2%.

Nasdaq futures were up 0.6%.